Who benefits from not paying college athletes? Their coaches, for starters

Credit: Associated Press

Amy Merrick | Apr 05, 2021

Sections Economics

College football and men’s basketball players generate millions of dollars of revenue for their universities and athletic conferences from TV contracts, ticket revenue, and merchandise sales. The athletes have been fighting for a share of all that money, disputing rules imposed by the National Collegiate Athletic Association that bar them from any compensation beyond academic scholarships and modest living expenses.

That money, instead of going to the players, is benefiting others in the university community, according to Northwestern’s Craig Garthwaite, University of Michigan PhD student Jordan Keener, Chicago Booth’s Matthew Notowidigdo, and Northwestern PhD student Nicole F. Ozminkowski. They find the revenue from football and men’s basketball subsidizes other sports, and leads to higher spending on coaching salaries (not just in football) and facilities.

The researchers reviewed data for college athletics departments between 2006 and 2019, and analyzed roster data scraped from the departments’ websites in October 2018. 

They focused on the cream of the crop in the college sports world, the 65 universities in the Power Five athletic conferences that rake in the biggest bucks: the Atlantic Coast, Big Ten, Big 12, Pac-12, and Southeastern. At universities in this group, which include public schools such as Ohio State and Alabama and private institutions such as Notre Dame and Stanford, football brings in an average of more than $25 million a year and men’s basketball brings in about $5 million, accounting for 58 percent of athletics department budgets, the research uncovers. 

US college sports programs would pay more than $1 million a year to each of their top male players if they distributed as much of their revenue to athletes as the National Football League and the National Basketball Association do, according to the study. Star quarterbacks would get $2.4 million yearly, and the best basketball players $1.2 million, the researchers find.

Instead, college football and men’s basketball players received benefits amounting to less than 7 percent of the revenue they generated, according to the research. (Professional athletes in those sports got about 50 percent during the same time period, the researchers report.)

This freed up funds for money-losing sports and facilities construction, as well as for salaries for coaches and administrators. For every additional $1 that came into football and men’s basketball, 31 cents were reinvested in those sports, with the rest going elsewhere in the athletics departments, the researchers find. Twenty cents went to facilities, such as the University of Central Florida’s $25 million athletic compound complete with a lazy river, and Clemson University’s $55 million version including laser tag and miniature golf. 

Another 11 cents went to other sports, which as a group lose money. At the 46 public universities in the researchers’ sample, average athletics department revenues rose 60 percent from a decade earlier, while losses in nonrevenue-generating sports increased 71 percent. 

Nine cents went to administrative compensation, and six cents went to coaches’ salaries—half of that going to football coaches, and the other half going to other sports. In the researchers’ data, the average salaries of Power Five football coaching staffs at public schools nearly doubled to almost $10 million between 2008 and 2018, while salaries for other coaching staffs rose 70 percent, to $12.5 million. The remainder of each $1, the researchers conclude, was either used in future years or was moved out of the athletic department. 

The transfers, rather than promote equity, exacerbate long-standing racial inequities, the study argues. Black players account for about half of football and men’s basketball players in the Power Five conferences but only 11 percent of players in money-losing sports, according to the researchers. Football and men’s basketball players attended high schools with a median family income of $58,400, while players in other sports came from high schools with a median family income of $80,000, they find. 

This system “effectively transfers resources away from students who are more likely to be Black and more likely to come from poor neighborhoods towards students who are more likely to be white and come from higher-income neighborhoods,” the researchers write. Coaches and administrators also are more likely than their players to be white.