Monday, September 12, 2011

Another Misleading "Study" Regarding Pay-For-Play

I don't want to keep harping on the issue of whether we should be paying players, because I really feel like this has been beaten to death, and the people pushing for pay-for-play never respond to the actual criticisms of their proposals. You can read a couple of recent posts I've done on this here and here.

But a story is getting a lot of play today that continues to make the same mistakes. It can be found here:


A national college athletes' advocacy group and a sports management professor calculate in the report that if college sports shared their revenues the way pro sports do, the average Football Bowl Subdivision player would be worth $121,000 per year, while the average basketball player at that level would be worth $265,000. [..]

Huma and Staurowsky argue that the players should receive a portion of new revenues, like TV contracts, to be put in an "educational lockbox." Players could tap those funds to help cover educational costs if they exhaust their athletic eligibility before they graduate -- or receive the money with no strings attached upon graduating. They also propose that athletes be free to seek commercial deals, such as endorsements, with some of the money from that going to the lockbox, and the rest available for the athlete's immediate use.

They also say that schools should pay for costs beyond the tuition, student fees and room and board covered by athletic scholarships. The report calculates the shortfall for the full cost of attending college -- when things such as clothing and emergency trips home are added in -- at $952 to $6,127, depending on the college. That leaves students on full athletic scholarships living below the poverty line at around 85 percent of the schools, the report claims, by comparing the value of the scholarship's room and board to the federal poverty guideline for a single individual.


There are a whole host of flaws here that this article doesn't acknowledge because they'd prefer to drive this controversy.

First, they're measuring the "value" of the players by taking the profits of teams and dividing the money by the number of players. But this is, of course, preposterous. The value a player brings isn't the total revenue they generate but the marginal revenue they generate. To argue that Duke players generate all of the profits the basketball team makes is to argue that if the Top 100 high school players every year went straight to the pros and Duke made up their team with second tier players that the arena would be empty. Whether Duke is good or bad next year, and no matter who plays for them, they're going to sell the exact same number of tickets. The marginal value of the players is almost nil.

Similarly if the Duke players all left the school and formed a barnstorming team, and they played a game against former North Carolina players, is there any chance that 20,000 people would pay top dollar to show up for it? Of course not.

The second error that this analysis makes is discounting the value of what players receive. A player gets much, much more than just a scholarship. They get large amounts of time being coached by legends. They get special attention from a huge group of assistants, trainers, weight lifting coaches, doctors, chefs, tutors, et cetera. They get to play in a huge arena in front of screaming fans. They get to be kings of campus. They get to give tv and newspaper interviews. They get the chance to be legends.

Imagine you were starring for Duke or North Carolina or Kansas or some other big program like that. Imagine that you were offered $50,000 cash each year to go play for UNC-Asheville or UMKC instead (in addition to a full-ride scholarship). Would you take it? I doubt you would, and I doubt more than a handful of players would. The value of playing for those schools is tremendous.

And finally, the article also argues for the "Jay Bilas Model" of allowing players to seek out endorsements, ignoring the fact that this would destroy the sport - you simply can't do that when you have teams competing against each other. Boosters would take their millions of dollars and promise recruits "endorsements" in exchange for them coming to the school. The smaller schools would be wiped out, non-revenue sports would be wiped out, and fans would stop caring about a sport in which the biggest teams can get shady rich people to buy up all the best players.

I'm waiting for one person arguing for paying players to answer any of those three problems. As long as their argument continues to consist of "The bowl games make millions of dollars and the players don't get any of it!" I'm going to continue to not take them seriously.

No comments: