Two Very Different Issues: Paying College Athletes and Paying for Intercollegiate Athletics

Now that the dust is settling on “March Madness,” all that is left to do is to count the money—the revenues generated by and those spent on “dreams of glory.”

In a recent post, I included the following chart: it show what college basketball players would earn, on average and team by team, if they received a share of the total revenues comparable to what is defined in the NBA’s collective bargaining agreement:

If College BB Players Were Paid

If players were getting paid in college at this level, perhaps more of the very talented players might hang around for more than a year before jumping to the NBA.

That flippant observation aside, the immediate counter argument will be, of course, that the revenue-generating sports support other sports at an institution, and that there is no parallel to that arrangement at the NBA level. And that argument can be supported by data such as that represented in the following chart:

Revenue vs Expenses, Men's and Women's, 2009

But all of this discussion about the revenues generated by “big-time” intercollegiate sports programs is a distraction from the core issue at the vast majority of the colleges and universities in the U.S. And I suspect that most college and university administrators and most athletic directors are all too aware of what the core issue is and welcome the distraction.

Instead of focusing on the huge revenues being generated by a relatively small number of athletics programs, we should be focusing on the fact that most of the men’s college basketball programs in the country are not profitable and are themselves heavily subsidized by the institutions. And if the “revenue-generating” sports are not actually generating enough revenue to sustain themselves–and, by the way, even fewer football programs are self-supporting–then the institution is subsidizing all of its athletics programs—at the expense of instruction.

Consider the following self-explanatory charts:

Sources of Athletics Revenue, by Category

Spending on Athletes, Other Students, 2012

This last chart should not, of course, be misread as any indication of what college athletes are actually receiving but, instead, as simply an averaging per athlete of the costs of operating the athletics programs, and some of those costs–most notably, coaches’ salaries–are not “fixed” but institutionally self-determined costs.


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