Counterpoint: A Scholarship is More Than Enough for College Athletes

Michael CollinsAnalyst IJune 16, 2008

With some of the eye-popping dollar figures that some conferences and universities generate from their football programs, a few vocal advocates feel athletes should get their due cut. 


“Show me the money” has filtered down to the college sports world and to the headline sports journalist.   The specter of a homeless, starving mother of the athlete has been raised, who may benefit from the football player receiving extra dollars.


Let’s give the college football player $200,000 for a start.  Wait, private college costs are almost that now.  Dr. Boyce Watkins, Finance professor at Syracuse, has been making the sports TV rounds on this topic. 


Syracuse, for example, lists their costs as $40,687 for this coming yeartuition, room and board, books$162,748 for four years.  Many college football players are red-shirted and granted a fifth year.  Notre Dame’s total costs are $49,030$196,120 for four years. 


Syracuse lost money on their football program for the first time in 2006, continuing in 2007.   The school is using reserve funds to make up shortfalls in the athletic department budget.  The Daily Orange wonders how long football can survive such a trend. 


Dr. Watkins says players would be pleased to get an additional $150,000 per year to play for colleges “making millions” from athletes being “exploited” by the current system.  Evidently, Dr. Watkins should have been checking his own school’s athletic budget first.




Watkins is a self-described “free market capitalist” who recommends changes that would lead Syracuse football to be mentioned in the past tense.  For a free market capitalist, the world breaks down into the haves and the have nots.  


For such an environment to sustain itself, it must have the flexibility of increasing revenue sources, while being protected from economic downturns.  Neither is the case with college athletics, especially state universities funded by state legislatures.


Dr. Robert Frank, Professor of Economics at Cornell’s Graduate School of Management and Knight Foundation member, says college athletics is a classic winner-take-all economic model. 


Dr. Frank’s study debunks the myth that winning athletics leads to increased donations from alumni or to quality of student applicants.  Without an increased donations from alumni, where does Dr. Watkins think the balancing revenue will come from?   Cuts in coaches salaries would compensate, he saysor someplace. 


The cost of losing the race for top athletes in a free market environment may well be devastating to a school.   Consider such proposed changes as college athletic’s version of the arms race with the have-nots the old Soviet Union, trying to stay afloat with increased spending.  


Who will lose first?


The black colleges, small colleges, non-BCS colleges will be the first losers, the clear have-nots.  Non-BCS colleges generate only a few hundred thousand per school for bowl participation per year, enough to break even. 


Football is the primary revenue-generating sport for universities.  Football revenue is used first to balance out the losses in other sports.  For these colleges, increased football costs mean serious consideration on the viability of their school’s football program.   


Without a repeal of Title IX mandating equal women’s sports in universities, a revenue-losing football programthe highest cost in a sports athletic budgetis toast. 


The have-nots might afford modest subsidies for sports who have small numbers of athletestennis, swimming, golf and such programs.  Without a self-sustaining football program,  the Carrier Dome may end up being vacant half the year. 


Depending on how the basketball program could compete in the free market, the Dome may end up being used for monster truck shows.


State Universities and Their Choices


College football does not operate in a vacuum.  Princeton has had to rely on some alumni clubs to support some athletic programs.  Dartmouth cut out swimming and diving.  University of  Rhode Island cut athletic budgets


State legislatures would determine how many state universities they could sustain.  Florida may see a contraction in D-I/I-AA schools.  Florida State and Florida would survive but would USF, CSF, Florida Atlantic and Florida International?  


When faced with shortfalls in the overall university budgets, presidents must cut academic, athletic programs or jobs.  This year USF is cutting 450 jobs but not the athletic programs - yet.  The University of Florida is cutting 430 jobs. 


The University of Tennessee and the University of Alabama systems are cutting academic programs and eliminating jobs due to shortfalls in their budgets. 


How many low-income households, including blacks, are affected by these job cuts?


Who loses next?


Black athletes and minority need-based scholarships.  How many black athletes from low income families are currently playing football in these black colleges, D-IAA and non-BCS colleges?  With a contraction of those programs, where would they go for football and an education?   Perhaps they would get a need-based scholarship to college and work a job for income for their family or for socialization. 


Title IX programs are blamed for increased costs.  Will women athletes be the next loser?


Contraction of football programs would realistically leave optimistically at best 100 schools.  How many BCS schools could survive? 



BCS Conference Impact


Examine the Big 12.  The South Division schools would probably all survive due to their profitability.  Boone Pickens has certainly impacted Oklahoma State with his donations of millions. 


But the North Division with Iowa State, Kansas State, Kansas, Missouri or Nebraska may have a tough time surviving, joining Syracuse. 


Arizona State recently cut out three sports due to “economic realities” – men’s swimming, men’s tennis and wrestling – affecting 70 athletes and 6 coaches. 


Washington State, Oregon State, Arizona and Arizona State would be in the same have-not boat as Syracuse, Iowa St, etc.  


In reality, about half the BCS football schools may not survive free market changes. In a world where football scholarships are renewed annually, a free market for football services means a player can transfer to the highest bidder. 


The haves include the richer, well-endowed schools, those with sugar daddy donors like Boone Pickens at Oklahoma State or Phil Knight at Oregon and the few talented athletes at valued skill positions.  Pickens’ Oklahoma State may rule the Big 12 as may Phil Knight’s Team Nike Oregon team in the PAC-10. 


Frank concludes “No institution can cut back unilaterally without damaging its teams’ competitive abilities, but if all institutions cut back in tandem, competitive balance would be maintained.”  


Cutting back D-I football scholarships from 85 to 70 would compensate for increased costs.  D-I AA football scholarship now are at 36 per year per team.


Cut the D-I schools in half (50) with only half a current conference’s teams surviving as realistic competitors for football championships. 


Many other D-I universities like Notre Dame, Stanford, Vanderbilt, Wake Forest, Boston College, Northwestern, Duke, Virginia may well choose not to belong to a system that moves student athletes towards more professionalism. 


Cut the D-I schools to 35 at most. 



What Contraction Means  


With 35 schools left each year in this free market system realistically competing, and many schools dropping football, the black athlete is the first to lose.  A few will get a whole lot more, most won’t get the chance to excel on a national stage in college, or go to the NFL.  Getting the important college education would depend entirely on need-based scholarship availability.


Another loser will be those non-athletes who benefit when a university’s football proceeds are plowed into need-based scholarshipsblack, white, or Hispanic.


Overall, minority studentswhether athletes or notwould be most disproportionately affected.  Notre Dame used its 2006 BCS bowl revenue for academic need-based scholarships and programs.  Other schools like Syracuse use their conference cut of bowl revenue to cover shortfalls in athletics or in the overall budget. 


The days of small college football players making it in the NFLlike Jerry Rice, Walter Payton, Gene Upshaw, Willie Davis or Buck Buchananwould be history.

Hard decisions may eliminate baseball, and women’s softball, to maintain Title IX equality for instance.  At this time, minor sport cutbacks are being preferred with swimming programs being especially hard hit.


The Underpinnings of Football Success


Recent football revenue success now depends on three factors: twelve game schedules, current conference alignments with bowl ties and lucrative conference championships, and television money. 


Football program contraction could mean fewer games, especially for those teams relying on D-I AA opponents, a realignment of conference teams with other haves or have-nots, less regional competition and more travel, an inability to subsequently meet bowl alignment contracts for seven-nine teams, an inability to maintain current conferences, and decreased leverage in negotiating favorable television contracts. 


In 1990, when Notre Dame opted out of negotiations for a college football television package, the ABC/ESPN reduced the contract by $35 million.   Eighteen years later Notre Dame away games against the remaining D-I schools would be crucial for television revenue. 


Other Questions


Football is much more of a team sport than basketball.  Players develop physically over four years, learn schemes and groupings, and acquire quite a number of skills before they can move the NFL.  A few more questions come to mind.


·        How much more should a senior be valued than a freshman?

·        Should a skilled position player be compensated more than a Big Ugly?

·        What if a high school prospect is not producing as expected?

·        What if a player is injured and is not contributing to a school’s revenue?

·        How much more does a football player contribute than athletes in other sports?

·        Wouldn’t a collegiate Terrell Owens want the ball more to increase his value?

·        How could a school realistically keep third party influences (agents, etc.) from subsidizing talent?

·        How much should a college player compensate a coach for learning skills that will take him to the NFL?


These are all free market questions.  Any propositions for limited stipends would be considered regulation of a free market.  Most true free market economists would let the market determine the answers to matters of worth - but that is an arms race most colleges cannot afford.   




Advocates for paying student athletes more than full-ride scholarships need to address all these economic issues and choices colleges may have to make prior to realistically proposing that student-athletes be paid.   Otherwise, like the Wizard of Oz, they may be well-intentioned but impractical. 


Wouldn’t it be far easier to establish a developmental league for those athletes who choose an immediate income for them and their family, to concentrate on their value as a football player and do not wish to graduate from college? 



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