Wednesday, July 24, 2013

Thinking Seriously About Paying Athletes

You can't really go anywhere on the Internet these days without reading about the call to "pay college athletes". There's a big lawsuit going on, as you might have heard.

There is a whole lot of inflamed rhetoric going on now. Athletes are regularly called slaves on a plantation (try reading what real slaves went through).

Let's try to put that inflammatory rhetoric aside and talk seriously about paying athletes. Most people who want to pay players just say "It's fair! We need to pay them!" Well, okay. How? What's your plan? What are the issues that need to be dealt with to pay them? I've already talked about the "Olympic model" here, so let's talk about the issues more popular nowadays - direct payment of athletes out of jersey sales, video game sales, tv contracts, etc.

There are some serious issues that need to be dealt with, and that you'll almost never hear the pro-playing-athletes side address. Let's go through them one by one:

1) Athletes are already compensated
2) There is no free pile of cash
3) There is almost no free market on the academic side at universities
4) If you're going to have a professional league, are you really going to have a professional league?

1) Athletes are already compensated

The common argument that you hear is a listing of how many billions are in revenue are generated by college sports, followed by "and the athletes get none of it!" I don't mean to pick on Mack Brown, but he's just the latest one to make that argument: "I do think players need to be paid. These players are killing themselves & at Texas last year we made $163M."

Well that's interesting... where does that money go? With professional leagues, the money is divided between billionaire owners and millionaire athletes, who generally split the money something like 50/50. Every time there's a labor dispute, most of us have no sympathy for either side - we don't care if the athletes get 51% or 52% of the money, we just want the leagues to play games.

Universities? They're non-profits. That money is going somewhere, and it's not into the pockets of billionaire investors. Since Mack Brown brought it up, let's look at Texas. In 2011-12 they did indeed bring in $163.3 Million... but they also spent $154.6 Million. And you'll find that they more or less spend what they bring in every year. Like I said, Texas is a non-profit institution. Any money that they bring in is spent on something.

If you bring this up, the common retort is "Ah, all that money goes to coaches!". Not really. Texas spent $23.4 Million of their $154.6 Million (15%) on coaches, though approximately half of that $23.4 Million went to coaches from non-revenue sports. And I can assure you that Mack Brown isn't taking a pay cut if his players start getting paid cash. If anything, coach salaries would likely go up if you increase the financial stakes for football and basketball programs.

What's most of that money being spent on? Well, if you look at the football budget ($24.8 Million), it goes to a lot of things. We have scholarships ($3.4 Million), equipment ($361K) and travel ($1.4 Million). But there's other stuff that doesn't count into the football budget. For example, training facilities, academic aid and, of course, the coaches and trainers.

Compensation isn't just cash. Compensation isn't even just a free education. Compensation includes being coached by top level coaches, trained by top level trainers, playing on national television and traveling around the country.

Don't think that's worth something? In one of several arguments I've had on twitter with Jay Bilas I asked him repeatedly if he would have taken $200,000 per year to play in Europe instead of playing at Duke. He refused to answer. The reason he refused to answer is because he didn't want to admit the truth - playing for Coach K, playing in Cameron Indoor, and everything else that came from playing basketball for Duke was worth a whole lot more than $200,000 per year.

Don't agree? Players turn down millions all the time to stay in college. At least ten players who were certain NBA Draft picks chose to skip the 2013 NBA Draft. And even players who can't make the NBA can go play in Europe and makes hundreds of thousands of dollars per year. How many players go that route? Nick Calathes and Terrence Oglesby are among the American-born players in the past few years who left NCAA basketball with eligibility remaining with the express intent of playing professional basketball in Europe, but guys like that are few and far between. Either these players in college basketball are all morons, or they value what they get out of college sports as being worth more than being paid a few hundred thousand dollars per year in Europe.

This website lists 31 players currently making at least $1 Million per year playing in Europe. You can get paid over there, and hundreds of guys who were playing as seniors on college basketball teams this past season will be playing in Europe next season. Many athletes are happy to play in Europe - they just value the compensation package at NCAA schools more.

Well okay. Fine, college players already get a bunch spent on them. Why don't we spend more? The schools are sitting on piles of money, right!?

2) There is no free pile of cash

I already told you that the University of Texas spent basically as much money on athletics as they brought in, and that most of the money didn't go to football or men's basketball. So.... where did it go?

Well, $3.4 Million for men's baseball, $1.5 Million for women's rowing, $1.5 Million for men's track & field, $2.4 Million women's volleyball. In all, more than $17 Million were spent on women's sports.... and those are just the operating costs. That doesn't include things that the sports share, like medical expenses ($1.7 Million across all sports) and facilities ($6.7 Million).

All of the money is already being spent. If you're going to spend more money on football or men's basketball then you have to take it from something else. Either you're getting rid of non-revenue sports or you're taking money from academics. But there is no free pile of $163 Million that Texas sits on every year - that money is already being spent on student-athletes.

Well, fine, let's make people earn their keep. Why shouldn't athletes be able to get as much money as they can via the free market, just like everybody else at a university?

3) There is almost no free market on the academic side at universities

Last year, a Chemical Engineering professor at the University of Texas named Roger Bonnecaze brought in a $13.5 Million grant to the school. How much does he get in salary each year? Approximately $174,000. How much does a theater professor who brings in zero revenue to the school make? Approximately $104,000. How is that fair?

Well, this is how public universities work. Public universities are not hedge funds - you don't get paid a fraction of the money you generate. Some professors generate a lot of revenue while others generate nothing. They all get paid more or less the same amount. Why do more productive professors subsidize less productive professors? Because that's what a public university is supposed to be. The University of Texas isn't a pharmaceutical corporation. If they were, they'd fire all of their liberal arts professors and just focus on things that made them money. Instead, they want to have a school where kids who do research for Professor Bonnecaze can also take a theater class.

This follows for sports. More money is spent on football than on volleyball, just as chemical engineering professors make a little bit more than theater professors, but football subsidizes volleyball the same way that Bonnecaze is subsidizing less productive professors. This is what universities do.

If you think that universities should switch to being free market corporations then you can argue that, but don't pretend that's how the rest of the university works. There is no free market anywhere at a public university, because there isn't supposed to be.

If you want to pay millions to players, you have to admit who you're taking the money from. You have to admit that you're either cancelling volleyball or you're firing some professors in order to give an athlete $1 Million in cash. There is no free pot of money, and you'll be going against the mission of every single public school to provide a well-rounded education and experience to tens of thousands of students - not just the ones who bring in revenue.

4) If you're going to have a professional league, are you really going to have a professional league?

This falls under the category of "You have to think through what you want". Because here's the thing - there is no professional sports league that I'm aware of that is an actual free market. For example, let's take the NBA. The athletes can't take any money that they want. Lebron James has a maximum salary. Lebron James can't be paid by a sponsor in exchange for switching teams. Lebron James was drafted. Most athletes have contracts that allow them to be traded without any of their own input.

In a free market, James Dolan (the owner of the New York Knicks) could go to Kevin Durant and say "I'll give you $50 Million in cash every year, and Adidas will toss in an extra $30 Million per year, if you'll come to the Knicks." Durant would certainly generate more than $80 Million in revenue for Dolan and Adidas every year if he came to the Knicks, so everybody would profit. But the league doesn't let him do that.

In a free market, the teams don't have to share jersey revenue to promote competitive balance. Employees can't be traded to different states (or even countries) against their will. Employees have free choice where they go.

So is that what college basketball will have? Can universities draft players? Can they trade players? Will you set limits on what the players are paid? If that's your plan, you don't have "a free market". The NCAA would still be telling players what they could and could not do, what they could make and where they could go.

So what is your plan?

This is where I want to leave the issue. If you want a plan to pay players, tell us what it is and how it will work. And tell us what the consequences and whether the pros are worth the cons. For example, do we want to allow schools to give players a $2000/semester stipend for food or whatever? That's not a "free market", but it's something worth considering if we can make the math and finances work.

But you need a plan. Shouting "SLAVES!" and saying that anybody who opposes you thinks the NCAA is a perfect organization that never does anything wrong isn't enough (a horrible strawman, by the way).

Come up with a real plan and we can talk about it. Until then, you haven't thought through this issue enough.

Tuesday, July 02, 2013

Post-Draft BP68

With the NBA Draft over, it's time for another bracket projection. Below is my annual "Post Draft BP68". The previous bracket projection is here, and you can expect my next bracket projection to come a few days after Midnight Madness in October.

I want to address a few of the bigger changes, as well as some fan bases that might not be happy with where I have them.

First, the Big East title race. In my last bracket I had Marquette as the narrow favorite over Georgetown, with Creighton a bit back. But that assumed Doug McDermott and Grant Gibbs were gone for Creighton and Vander Blue was returning to Marquette. Instead, Vander Blue left to go pro while McDermott came back, and we just found out today that the NCAA has given Grant Gibbs a 6th year.

The result of all of that, of course, is that Marquette has to drop while Creighton moves up. In the end, I'm giving the edge to Georgetown, and it's for two reasons. First, remember that Marquette is overrated. They finished the regular season ranked around 15th in both human polls and made the Elite 8, so they're being treated as if they were a borderline Top 10 team. In reality, they were a borderline Top 30 team that got really lucky in a bunch of close games (I discuss this in more detail here). Also, remember that Creighton has the same problems they had last season. They're going to be a superb offensive team, particularly shooting the ball. But rebounding and defense were two huge problems, and they're still losing their best defender and rebounder in Gregory Echenique. To be an elite team you have to be at least pretty good in all three major facets of the game. Last season, Indiana set the model for a team that had been elite offensively and crap defensively one year prior that figured out the defensive end and becoming an elite all-around program. But I don't see a Victor Oladipo or Cody Zeller on Creighton. The defense will have to get significantly better for them to win the Big East.

The other area of push-back that I got on twitter after teasing this bracket projection is Kansas moving up to a 1 seed and Kentucky being 5th overall, as the top 2 seed. Kansas is moving up for landing Andrew Wiggins, although I had them as a 2 seed and Big 12 favorite even before they got Wiggins. The reason I have Kentucky as a 2 seed is not because I think they're not going to be one of the four best teams. It's because I find it really unlikely that the SEC will get two 1 seeds. Unless Kentucky is the overwhelming #1 team in the country, they're going to have to duel with Florida for that 1 seed, and I'm giving the slight edge to Florida. I understand that Kentucky has a great recruiting class, but they really return very little. And as we've learned in the past, you can't be an elite team with freshmen alone. I get that Willie Cauley-Stein and Alex Poythress are highly rated 2014 Draft prospects, but that's based on their potential rather than their production as freshmen. Neither has been a particularly elite college player thus far.

The only other significant change to the bracket is Oregon moving into the Field of 68 and Alabama dropping out. Alabama is out because Trevor Lacey left the program. Oregon is perhaps getting Joseph Young eligible right away after a transfer from Houston, but even if he isn't I still think they're a pretty good call to slip into the Tournament in lieu of Alabama.

Without further ado, he's the entirety of my projected Field of 68:

1. KANSAS (BIG 12)

2. Kentucky
2. Ohio State

3. Oklahoma State
3. Virginia

4. Creighton
4. Marquette
4. Wisconsin

5. North Carolina
5. Iowa
5. Michigan

6. Indiana
6. Villanova
6. St. Louis
6. Pittsburgh

7. Butler
7. UConn
7. Boise State

8. Notre Dame
8. Baylor
8. Memphis
8. Tennessee

9. Stanford
9. Syracuse
9. La Salle
9. Colorado

10. UCLA
10. Cincinnati
10. UNLV
10. Maryland

11. Kansas State
11. Purdue
11. BYU

12. Dayton
12. Texas
12. Oregon
12. Boston College





Teams seriously considered that just missed the cut:
Georgia Tech, UMass, Providence, St. John's, Illinois, Minnesota, Iowa State, Oklahoma, Indiana State, Utah State, Arizona State, California, Alabama, Ole Miss, Vanderbilt, Denver, St. Mary's

Other teams with a decent shot to get onto the bubble:
Houston, SMU, Florida State, Miami (Fl), Richmond, St. Joseph's, Xavier, Northwestern, West Virginia, Southern Miss, UTEP, Wright State, Northern Iowa, Fresno State, San Diego State, Washington, Washington State, Arkansas, LSU, Missouri, San Francisco

Other teams I'm keeping my eye on:
Central Florida, Temple, NC State, Wake Forest, George Mason, Rhode Island, Seton Hall, Montana, Penn State, Drexel, Northeastern, Charlotte, Middle Tennessee, Detroit, Niagara, Buffalo, Western Michigan, Missouri State, Nevada, Oregon State, Lehigh, Texas A&M