How Does $2,000 Sound?: Analyzing the NCAA’s Stipend Policy

Today, the NCAA decided to authorize collegiate members to pay a $2,000 stipend to each student-athlete per year, in addition to tuition, fees, room and board, and books. Additionally, the NCAA authorized member institutions to grant multi-year scholarships, as opposed to yearly scholarships. Finally, the NCAA raised the current academic progress rate, imposing a postseason ban for schools that fall below the stated level. ESPN and many others can do nothing but speak the benefits of these changes today, but they fail to largely analyze the implications. Each of the three changes needs to be evaluated, for its positives and negatives, but a look at the stipend, alone, is complex enough.

$2,000 Stipend

According to NCAA President Mark Emmert, the stipend is designed to “more closely approach” the full cost of attendance at the college level. An athlete can receive up to $120,000 in total scholarships, or roughly $30,000 per year. Athletes also receive free room and board on campus; if an athlete chooses to live off-campus, the athlete will receive the amount of money commensurate with on-campus living.

So why is the stipend necessary? Pro-pay-for-play types will tell you its because the athletes are having their services exploited at the expense of the extremely profitable universities. The University of Michigan lists room and board, for a standard double room, at $9,468, $2,054 for personal expenditures (includes transportation, clothing, laundry, and entertainment), and $1,048 for books and supplies; the room and board, by the way, includes meals.

The pay-for-play types forget that student athletes, at least in football and basketball, leave college having no student loan debt.  The student athletes, regardless of sport, receive wearing apparel. Many student athletes also have summer jobs, many of which require little to no responsibility and put extra money in the athletes’ pockets.

NCAA rules limit practice time for athletes to 20 hours per week. Most people, myself included, recognize that schools likely go beyond the 20 hour per week practice limit. Let’s assume the following for a typical collegiate football player: Practices begin in early August (say August 1, for this year) and end in January (say January 9, for this year, assuming EVERY player played in the BCS Title game, would be shorter for teams in bowl games before that date, or not in bowl games at all). We’re going to be very liberal in calculation too, to factor in the greatest time possible, so as to benefit the student athlete, calculating game-day time as being 10 hours; we’ll also figure EVERY team plays 14 games (in reality, only a handful do). For sake of the argument, we’ll factor in team meeting time (1 hour per day, non game-day) as well as workout time (non-practice time) (1 hour per day, non game-day).

Game-day time: 140 hours

Practice time: 460 hours

Team meeting time: 148 hours

Workout time: 148 hours

Total time: 896 hours (just short of a 40 hour work week, in season)

So a liberal estimate gives us 896 hours required of a typical football player in season. Sure, that doesn’t include any time necessary to keep in shape out of season, but that could easily be built into the hours, either by adding a few more hours or spreading out some over estimated areas. So based on the $30,000/year scholarship (which, by the way, is tax-free), a typical football player is making $33.48/hour, which is the equivalent to an individual making $69,642 per year (before taxes, easily in the top half of gross income). Many athletes have no trouble finding employment after college, whether it be in a professional sports setting or other setting. Think of this as a paid internship.

The potential argument is that student athletes must attend classes in order to be eligible to play, and must maintain a given grade point average. Last I checked, many high school athletes are putting a significant number of hours, both on and off the field, and are not being given any benefits. Further, as it stands, a student athlete cannot be removed from his or her scholarship based on poor performance on the field, only based on poor performance in the classroom.

Another argument is that student athletes should be entitled to share in the profits of a school. First, to require sharing would be tough to calculate. Secondly, Title IX would require sharing among all athletes, regardless of revenue brought in and success; do you really want a male gymnastics star to share in the same amount as a star point guard or quarterback? Most importantly, profit sharing, in the real world, is commensurate with higher-level employees or shareholders. To suggest that student athletes should be permitted to share in the profits, while not having to invest in the college (whether it be through paying to attend or shouldering losses), is disingenuous. Higher-level employees, very often, have their compensation tied to performance; when the higher-level employee doesn’t perform, he or she no longer has a job, or at the very least, does not share in the profits that year. According to Michigan Athletic Director Dave Brandon, the University of Michigan Athletic Department posted a surplus of $4.7 million in 2010 (the 10th consecutive year with a surplus); imagine trying to split that money up among student athletes. Many schools are lucky to break even or even lose money, would those student athletes be expected to chip in to cover losses?

Finally many of the pay-for-play advocates are mid-major supporters. Think about this, assuming mid-major programs, like Boise State, Houston, and SMU, are expected to compete with the big time teams, its going to cost them. At an additional $2,000 per player per year, those colleges will have to shell out an additional $160,000 for football (assuming 80 scholarship players), alone. Because of Title IX, all other athletes at the school will need to be compensated too. Care to explain how those teams can afford to compete at such a high level, let alone the lower level FBS programs? Of course, the stipend is optional – tell that to a student athlete weighing the options on where to attend.

Where is the money going to come from? Profits? Those attending the revenue producing sports? Enough is enough, its time the NCAA takes a stand and stops the nonsense, by revaluating the stipend policy, punishing the current offenders, and making the necessary changes before the system breaks.


2 responses

  1. Pingback: Before Visiting The Sportsbook - New Content Added: Week of October 23rd

  2. Been going to Michigan games for years, some good some bad. The audacity of these players to want a cut of the action plus tuition etc. Some of these clowns should pay back the tuition that they received . $70,000 a year for what , showing up. Sooner or later these guys will kill the golden goose.

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