The Economic Value of Football Players

by Kevin on September 12, 2013

There is no doubt that every single major college football team has some nook and cranny that is dirty.

I have no doubt that Alabama is paying players. I have no doubt that despite Tennessee’s awful performance in recent years that there aren’t some players getting paid there, too.

Sports Illustrated is releasing an extensive report on Oklahoma State that alleges significant NCAA violations spanning from 2001 to 2011. Players getting paid, extensive drug use that was ignored, and worse.

One of the topics of discussion during this off-season is whether or not players should be paid at the collegiate level. This will bring further pressure on the NCAA as that discussion will not be going away anytime soon.

From the personal finance and economics side of things, I’m torn. It all comes down to economics.

Should College Football Players Be Paid?

The NCAA has placed collegiate sports on a pedestal where amateurism reigns and everyone must play by the rules.

The only problem is those rules severely undermine the economic value of the efforts of some of those players, specifically college football players.

The Welfare State

During some of the discussions this summer the NCAA said (and this is a paraphrase) that paying players would destroy the collegiate system because not only would everyone have to be paid, but that college football pays for a ton of non-revenue generating sports at those schools.

So let me get this straight… you want my son to come play football for the cost of tuition (when he might be able to get other forms of scholarship) so that his efforts on the field, and the money that is generated there, can pay for tennis, wrestling, and swimming?

That sounds like a welfare state to me. It’s not the college football player’s fault that his sport generates a bajillion dollars in revenue while the other sports don’t. That’s the problem of the other sports. You don’t hold down the football player because of it.

Players are Paid Right Now

Economically speaking I see no feasible way the current system continues. At the end of the day, college players are paid right now. It’s just against the rules. But those boosters, the $100 handshakes, the magic envelopes of cash, the getting paid for yard work you never did, that is all economics trying to balance out the value of those players efforts on the field with how they are compensated.

Where else in America, the land of working hard and being rewarded for that work, does someone go to work for virtually free, generate millions of dollars for the organization, and not get some form of compensation?

Players are Trapped, Coaches Aren’t

Can you imagine a company where the top sales representative pulled in $20 million in revenue for the company and wasn’t paid a dime of it? Or was just paid in free housing and some free food?

That’s preposterous. That sales rep would leave and find another company to go generate millions in revenue for.

But for the college football player, that’s a problem. Once you sign to go to a school you are locked in at the Division I (FBS) level at that school unless you take a one year break, go to Division II (FCS), and then sign with a new school. You can’t just switch teams like you would switch jobs.

Yet the football coach that recruited you can do just that. He can leave in the middle of a recruiting dinner (Tommy Tuberville leaving Texas Tech to go to Cincinnati) or after one year and inform the team the day after he left via text message (Todd Graham leaving Pittsburgh to go to Arizona State).

Some of the kids on those teams turned down offers from other schools and coaches on the promise they would be utilized in that coach’s system. Now they are left high and dry, unable to transfer without losing a year of eligibility, hoping the next coach likes them as well as the last one.

It’s an unfair and economically unfeasible system.

What Would You Tell Your Son?

What would you do if your son was good enough to play college football at the highest level?

Would you tell him to ignore the potential for serious injuries that could impact his living the rest of his life and just play for free?

Would you tell him that no where else in the country do you do such significant work for such little pay?

Would you tell him that high performance is never rewarded in other professions?

I don’t think I could just from a straight economic standpoint.

The “invisible hand” will always rebalance things. If the NCAA rules are set up to hold down the economic value of football players the invisible hand of economics will find ways to bring that economic value back up. Maybe not to the full point of where it should be, but definitely a step in that direction.

What would you do?

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