The Quarter Million Dollar Student Athlete

College is fun.   It’s a time of liberation and discovery.  It’s a time to develop self-awareness, accountability, empowerment.  What any of us wouldn’t give to go back to college?

Watching March Madness always reminds me of that liberation, joy and jubilation.  It propels me back twenty plus years to a time when we were students and the Fab Five were rocking at Michigan. We jammed into Crisler Arena bouncing up and down, partying at our friends’ houses and storming South U at our victories or near victories.  What pride we had in watching our fellow students represent our great University in the hunt for a title.

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The debate as to whether or not to pay college athletes has been ongoing for years.  At its core it’s a simple argument.  Student athletes bring so much revenue from the two big sports of basketball and football and they deserve to share in the revenue gain.  The NCAA reports that 1.1 million kids play high school football and 68,000 play college football.  The same report has 546,000 kids playing high school basketball and 17,500 playing college basketball.    That’s a total impact of 85,500 student athletes that are driving 99% of the revenue from college sports.

Here’s where it gets interesting…. In the fall of 2013 the U.S. Department of Education reported that 21.8 million students attended college.  That’s an increase of 6.5% since 2000.  The ratio of females to males in colleges has grown from 1.2 in 2000 to 1.3 in 20013 as more women are going to school.  Between 2000 and 2011 Black and Hispanic enrollment is soaring.  Blacks have increased from 11.7% to 15.1% of the total population in that period and Hispanics from 9.9% to 14.3%.

Economics from college sports are a huge part of this story.  Sure the numbers are staggering.  Michigan brought in $100 million from their sports programs in 2008.  College football reported in 2010 that they had collectively over a $1 billion in profit.  The revenue raised by these sports flows to not only fund other sports such as soccer, lacrosse, swimming, gymnastics and but just as importantly it funds the universities’ endowments and scholarships – driving enrollment figures up.  These student athletes are driving a huge funding mechanism to support kids that might not otherwise be able to afford college.

I understand that this doesn’t negate the argument that the college athletes for basketball and football are in the lime light and prime time.  The student athletes work endless hours as both athletes and students and essentially driving the “product” that is drawing this revenue and profit.

Most of these students are on full room and board scholarships.  At Michigan, for instance, a four year scholarship could equate to approximately $240,000 in scholarships over that period.  While attending the University, they also get an opportunity  to “audition” for a chance to play in professional sports.  A job here could mean a huge payoff even though there is a very small statistical chance of that happening.

Let’s put ourselves in a pre-college recruit’s shoes.  Imagine the following:

A recruiter comes to your 18 year old self and says,

 “Come play football at the University of Michigan.  And we are going to compensate you with a scholarship that equates to over $60,000 a year in value and by the way you have a chance to be in the spotlight and if you play well have a chance to go play professional sports.  You will have to balance athletics and school and you will have to work hard in the gym and practice.  Those are all conditions of a scholarship.  The worst case for you is if you don’t make it to the big show, you have a degree from a top 10 university.” 

How many 18 year old kids would turn that down?

Is it a job?  Should they be compensated?  Should they belong to a union?  Yes. Yes. No.  Being a student is a job, no matter if you are on scholarship or not.  It’s a full time job before high school and certainly a full time job for a student pursuing a higher education.  Attending classes and studying is clearly over a 40 hour work week.  Compensated?  I’d say $240,000 over four years is pretty good compensation.  Unions?  God no, it’s a ludicrous argument that has the support of only the union leaders looking for new membership.   If they are not employees, how can you unionize?  Then their scholarships would be taxable.  What kid could afford to pay 30% tax on a $60,000 a year scholarship?

Think about this as an analogy.  An athlete works every day to try out for the Olympics.  She pour hours on end sweating and bleeding as a full time commitment.  Let’s say she  is selected to participate in the Olympics.  Does sge get compensated?  Don’t the Olympics bring in billions of dollars in revenue and profit?  Shouldn’t the Olympic athletes be compensated?   Or how about this…let’s say you get a full ride academic scholarship.  Your research work that you do lands the University some big break through grant.  Should you be compensated for that?

I look at the faces of the Kentucky basketball players.  All freshmen.  I don’t think any of them are complaining about not being “compensated”.  They look like they are enjoying their ride through March Madness and their college years at the University of Kentucky.  There are probably more than a handful of kids attending the University of Kentucky smiling as well thanks to them.

NCAA Kentucky Wisconsin Final Four Basketball

About Steve Mitzel

By trade Steve is a consultant that helps business optimize their performance. Steve resides in Connecticut with his four wonderful children in the teens or tweens and is always looking for the next adventure. He is an avid marathoner who raises money for research to prevent cancer. As a two time grad from the University of Michigan he bleeds maize and blue and also likes to dabble with writing.
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3 Responses to The Quarter Million Dollar Student Athlete

  1. Kale says:

    I agree.

    There still needs to be a larger emphasis on the education part of free education, though. If the compensation is a 60,000 scholarship to a major University, it is that University’s responsibility to that student to make sure that said student athlete receives a worthwhile education.

  2. Steve Mitzel says:

    Totally agree Kale. It’s exciting to see Universities like Michigan get major donations for the student athlete centers that will emphasize this more.

    http://www.bus.umich.edu/NewsRoom/ArticleDisplay.asp?news_id=25937