NIL Donor Fatigue Increasing
- Thread starter ashokan
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Completely agree with the last sentence.
I would say the takes that blame players for not preserving a system that is "broken and needs to be re-thought" are pretty bizarre.
How does an entity with $100m in revenue operate but "allegedly" over $100m in expenses operate?
Prioritize expenses. Run an efficient business model.
Operate like every other entity has to.
It's not the athletes fault that Athletic Departments already can't run a minimally competent organization.
Do they have required expenses - such as running additional sports due to Title IX?
Yes of course.
My company has regulatory requirements which cost money (was literally just on a call about a new regulatory process could cost millions in total to implement).
But if we have to do it so be it.
That just means other expenses get cut or other ways to raise revenue.
Not every expense is mandatory. That's what leadership gets paid for - to make the difficult and necessary decisions and priorities.
So who should get the $100m in media revenue? The coaches and administrators?
So you are on the side of Dylan and Ace should be paid minimum wage because they didn't "work their way" up?
Even though they are selected for an industry making multi billions?
The football players don't just randomly wind up on the team.
They are picked.
That is where their worth comes from.
I think a number of posters are mixing up two different meanings of "worth." One is "how much can this person make in a free market?" The second is, "how deserving is this person?" Lots of deserving people (e.g. cops) make little and lots of people who can make millions aren't deserving.
A donor might feel, "I should contribute because I want my team to win and so I want my team to recruit this high school senior who is expensive because a lot of other teams want him." Or a donor might feel, "I only want to reward the deserving and so I don't want to contribute to paying a kid who hasn't paid his dues." It's your choice which way you feel.
A donor might feel, "I should contribute because I want my team to win and so I want my team to recruit this high school senior who is expensive because a lot of other teams want him." Or a donor might feel, "I only want to reward the deserving and so I don't want to contribute to paying a kid who hasn't paid his dues." It's your choice which way you feel.
Account for expenses, the B1G cut, executive salary, etc., and show your work on what you think players should get paid. Include their free tuition, room, board, perks.
Your value of them doesn't matter.
The sport is valued at billions.
To say a key part of that sports has no value because they "didn't earn it" is ludicrous.
not saying all player shave the same value. But to say they all have minimal value is ludicrous.
If these athletes aren't worth the money how has almost $1B/year poured in to NIL collectives to pay them? You don't believe donors are being forced to fund NIL collectives, correct?.You don't believe schools and their NIL collectives are being forced to pay these athletes, correct?
There is a $1B market to pay college athletes by donors. And as one of the below article states I agree that those donors are going to increase that figure until it approaches $2B or $3B or $5B. There is no need to account for expenses, league cuts, etc. There is a HUGE market to pay college athletes.It's coming from donors. It's a proven fact.
"The NIL marketplace is estimated at $750 million to $1 billion and is expected to balloon to $3 billion to $5 billion in the next five years, according to On3.com. Football dominates the NIL space, followed by men’s basketball."
https://www.deseret.com/sports/2023...ll-sports-transform-name-image-likeness-ncaa/
"College athletes collectively made an estimated $917 million from NIL payments in the first year, with the most lucrative deals flowing to football and men’s basketball stars."
https://www.insidehighered.com/news...two-years-nil-fueling-chaos-college-athletics
"The total amount spent was about $917 million, NIL platform Opendorse estimated."
One year of NIL: How much have athletes made?
Social media remains the most common way for college athletes to benefit from name, image and likeness compensation.
www.nbcnewyork.com
Stop with the billions bullshit. And stop with the no value. Never said that. Not going to have a discussion with a drama queen billions argument and you putting words in my mouth I did not state.
Stupid response. Never said that either. Try to stay on point.Nevermind. I'm on your side.
This entire basketball team has no value at all.
We'll see how much all these over the top projections pan out when large segments of people stop watching and going to games. Greed is going to kill the goose that laid the golden eggs.If these athletes aren't worth the money how has almost $1B/year poured in to NIL collectives to pay them? You don't believe donors are being forced to fund NIL collectives, correct?.You don't believe schools and their NIL collectives are being forced to pay these athletes, correct?
There is a $1B market to pay college athletes by donors. And as one of the below article states I agree that those donors are going to increase that figure until it approaches $2B or $3B or $5B. There is no need to account for expenses, league cuts, etc. There is a HUGE market to pay college athletes.It's coming from donors. It's a proven fact.
"The NIL marketplace is estimated at $750 million to $1 billion and is expected to balloon to $3 billion to $5 billion in the next five years, according to On3.com. Football dominates the NIL space, followed by men’s basketball."
https://www.deseret.com/sports/2023...ll-sports-transform-name-image-likeness-ncaa/
"College athletes collectively made an estimated $917 million from NIL payments in the first year, with the most lucrative deals flowing to football and men’s basketball stars."
https://www.insidehighered.com/news...two-years-nil-fueling-chaos-college-athletics
"The total amount spent was about $917 million, NIL platform Opendorse estimated."
One year of NIL: How much have athletes made?
Social media remains the most common way for college athletes to benefit from name, image and likeness compensation.
Ok just stick to Rutgers.
The product of the athletic department is worth over $100m.
I would argue the 2 most significant inputs to that product are the coaching staff and the athletes.
Obviously there are other "mandatory" expenses. Such as compliance activities, audits, etc.
But just because athlete compensation is the newest expense doesn't make it the lowest priority.
Other expenses get deprioritized and cut (administration salary for one example, UberEats).
This is literally how every other business is forced to operate.
Regulatory requirements are one thing. I deal with that myself and get it. But please name me a profitable company that is required to operate X number of divisions due to social justice reasons, even though only one of them is profitable? You can't do it because they don't exist. Any free market company would sell off the loser divisions and focus on the 1 profitable division. Or go bankrupt. Now add to that equation that said company is now further obligated to absorb even more expenses on that 1 profitable devision. Doesn't seem to reasonable imo. System is broken
Find those takes you refer to. You make it sound simple, but it is not. Maybe rather than throwing out how "easy" it is, look at the expenses from an annual statement line by line, and make a proposal. It's not as easy as you think it is.
100%!!!
But it's not the fault of the profitable division or those employees.
If my company said "We know you killed it and brought in record profits. But we can give raises or fix the technology you use. Sorry but we need to keep putting money into those other divisons" I would be pissed!
Rutgers University paying $28m subsidy should be a positive. They (and the NCAA) should be paying 100% for Olympic sports.
Why does CFB/MBB have to fund the US Olympic training system?
Where's the list of AD expenses?
How many of those expenses are a higher priority than athlete compensation?
Is the UberEats budget?
What about the budget for sending people to Bowl games?
My company started limiting the number of people we send to industry conferences.
Why? Because there was more important expenses (such as employee raises and bonuses).
We just increased HC Schianos salary. Even though the AD is losing money.
It's a very important expense.
We might need to send 1 less person to a bowl game. Doesn't that make sense though? His salary is a higher priority.
No it's not easy. But literally every other entity of every size deals with prioritizing expenses.
Not sure why an Atheltic Department couldn't.
The only answer that makes sense is "athlete compensation isn't a high priority".
Ya no I luv ya - Kids in HS get multi million $ contracts for playing baseball and then have to go through 3-4 years of minors.
And on the same note- other kids play for less than minimum wage in the minors with no backup plan.
Football players are the only athletes that have almost no capability to be a professional player directly from HS...
And- Coaches salaries have zero to do with anything related to NIL.
If I found a profession with less than 500 people in the world capable of doing it, and said their average salary was $5mil- that would sound like a deal...
Enjoy what's left of what was college sports. We'll all be tuning in to the latest set of mercenaries to win a Championship. See ya there.
Like the useless wnba? 🤭 that league few if any care about should have folded circa 1999-2000
Yes they are.
Here is a story you might find interesting regarding a Patent.
Bruce D Roth Inventor of Lipitor which is an Atorvastatin was patented in 1986. It became the largest selling drug by 2003. By 2006 Lipitor had become the best selling drug in history with one year sales totaling $12.9 Billion, more than the net worth of the 10 biggest drug companies in the world.
With respect to NIL, I will not contubute to it. I will support the University Sports Programs by buying season tickets and contributing to Pitt's Endowment.
The NIL system is broken and needs to be fixed.
HAIL TO PITT!!!!
College football viewership set all times highs this past year. Legalized sports betting is real. Draftkings, Fanduel, BetMGM, etc. are here to stay. Not only can you wager on a game, but you can live bet in game. People are watching live sports in greater and greater numbers and (imo) those numbers will keep growing over the next 5+ years.
The folks who claim this ruins college football/basketball and are never going to watch again are such a small fraction of the amount of viewers legalized sports wagering are attracting so as not to register. There is more money than ever flowing in to college athletics and free/cheap labor is a concept that is done forever. Fix the structure so it more mirrors pro sports (collective bargaining, % of revenue to athletes, contracts, salary caps, etc) and college athletics will become even more attractive.
Just my $0.02
The folks who claim this ruins college football/basketball and are never going to watch again are such a small fraction of the amount of viewers legalized sports wagering are attracting so as not to register. There is more money than ever flowing in to college athletics and free/cheap labor is a concept that is done forever. Fix the structure so it more mirrors pro sports (collective bargaining, % of revenue to athletes, contracts, salary caps, etc) and college athletics will become even more attractive.
Just my $0.02
So you want to destroy everything that made college football unique and turn it into another professional league - but with lower quality players. Sounds like a win to me.
Television contracts have crossed $1B/year. Schools are getting $100M+/year. Coaches are making $6M, $7M, $10M+ per year. But its not the same as a "professional league" because college athletes get 1/20th what their worth? With all due respect I simply don't find that to be a reasonable position.
Where does 1/20th come from?
$50K is free benefits (if schools are going to pay them, then make them pay their own tuition, room/board and other stuff they get for free). 20 X $50K is $1M/year. Are you suggesting players get paid $1M/year? There are 100 players on a football team. That $100M (which is not a real number, its around $70M), that $100M is spent. Where is the money for upkeep of facilities, building of new facilities, paying coaches, administrators, paying maintenance workers to maintain facilities, etc. You seem to be suggesting the University should be paying all of those expenses.
Do you believe if a University cut football they would increase free cash flow by $42.5M? That's 85 scholarships x $50k (your number). No chance. The cost to educate a football player is not the same as the cost of tuition.
Do you ever answer a question that is asked, or do you keep pivoting to new things that interest you because either you can't answer questions or don't want to answer the questions? See how this works?
But I will play the game properly and answer. No, the sticker price on tuition, room and board is not the actual cost to the University. Nobody knows for sure. But the market rate is $40-50K for in-state, and if that football player wanted an education and had to pay on the open market, that is what he would have to pay. Plus, those 85 "seats" could have been offered to to paying students, and that is indeed $42.5M in lost costs that they could have received from paying students. So, yes, that is free cash flow of $42.5 million lost by giving a full scholarship and perks to a student, who in many cases, would not be accepted or admitted to Rutgers.
There is also a value of them earning a degree and being prepared by the University and their coaches for a life beyond football. Life is no all about instant gratification and the largest amount of cash you can grab for yourself now. Many of us work at lower level jobs learning the essentials of an industry or a field and defer big bucks as we learn at the lower levels.
See how it works? Now give a detailed answer on your 1/20th showing the actual value a football payer brings to the media rights, and please subtract all operating and other expenses.
This discussion has hit the "more heat than light" stage, but . . .
First, it is necessary that athletes be students. Otherwise there is no link between the school and the teams. The school needs that link so that it can take credit in the public's mind for the team's performance. So scholarships need tos tay.
Second, I don't have a huge problem with athletes receiving compensation from schools in addition to scholarships. The athlete, is, after all, helping the school by giving it more visibility. (After all, we all think that it's valuable to the university to have big-time sports). So much money goes for other sports-related activities -- is it really so outrageous for more of that money to go to athletes? We pay TAs and RAs to get them to come to the school; why not athletes, too? We do need some kind of salary cap to make sure that every school is pretty much on an equal footing, and we probably need other restrictions, but the idea of paying athletes doesn't bother me.
Third, NIL ought to be what was intended to be: a way for athletes to make money through product endorsements and other arrangements with their parties. NIL ought not to be a way of giving boosters even a greater role in recruitment/retention than they already have.
Anyway, those are my thoughts for what they're worth.
First, it is necessary that athletes be students. Otherwise there is no link between the school and the teams. The school needs that link so that it can take credit in the public's mind for the team's performance. So scholarships need tos tay.
Second, I don't have a huge problem with athletes receiving compensation from schools in addition to scholarships. The athlete, is, after all, helping the school by giving it more visibility. (After all, we all think that it's valuable to the university to have big-time sports). So much money goes for other sports-related activities -- is it really so outrageous for more of that money to go to athletes? We pay TAs and RAs to get them to come to the school; why not athletes, too? We do need some kind of salary cap to make sure that every school is pretty much on an equal footing, and we probably need other restrictions, but the idea of paying athletes doesn't bother me.
Third, NIL ought to be what was intended to be: a way for athletes to make money through product endorsements and other arrangements with their parties. NIL ought not to be a way of giving boosters even a greater role in recruitment/retention than they already have.
Anyway, those are my thoughts for what they're worth.
College football players are probably worth, on average, $300k-$500k per year. That's about $30M per year for college football player compensation. If you want to subtract the value of a scholarship, which I think is fair, that comes to about $15M-$20M/year. Players in the NFL, NBA and MLB receive 50% of revenue (which is available data per the collective bargaining agreements) and B1G schools receive about $100M/year from television revenue plus ticket revenue, concession revenue, parking revenue, etc my figure probably comes out to about 15%-20% of revenue for the athletes.
Hopefully that answers your question. So here's mine. Being NFL, NBA and MLB players get +/- 50% of revenue what percentage of revenue do believe college football and college basketball players should receive?
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I don't know where the $100M is coming from, but we can go with that.
Maybe 25% is fair, but remember these are kids fresh out of high school, not professionals. Are you saying a 0 star 3rd string running back should get $250K per year? For what? How would the first stringer who is a Heisman candidate feel about that? Or are you proposing $250K as an average.
The value of that education may well be worth more than $50K. We have been basing that on "list price." But what about the future earning potential of a degree? That is worth a lot of money.
And to turn it back on you, can you really compare a college athlete who is a "STUDENT athlete" to a pro athlete who is not receiving an education in the league?
My position is that college players should not be paid anything, but you can't compare what they should be making to professional athletes because of the media rights alone.
And one other difficult item must be factored in, and @NickRU714 has raised this. NFL and NBA franchises are corporations that are run efficiently. Universities (most of them being arms of the State government) run very inefficiently. They get money, and they spend/waste it quickly. That's a thornier issue for the Universities and the Athletic Departments.
Thanks for answering. I hope I did not sound grouchy. As always, with reasonable people (like you), I try to find common ground.
I also enjoy this discussion with folks like you with whom I also try to find common ground.
The crux of my position is the unfortunate reality is and has been that the four years in college are likely (and somewhat sadly) the prime earning potential years for a lot of college athletes. While a sad reality I find it objectionable that "a system" is in place which strips those kids of earning power for whom these four years may be the highest comp years they will have in their lifetime.
Another way at looking at NIL is may be it will be way more expensive for the Top 20 Programs than it is going to be for Pitt or Rutgers.
Example:
Alabama (2024) recruited 28 players: 4 Rival 5-Star, 17 Rival 4-Star and 7 Rival 3-Star players.
Pitt (2024) recruited 21 players: 4 Rival 4-Star, 17 Rival 3-Star players.
Rutgers (2024) recruited 24 players: 2 Rival 4-Star, 20 Rival 3-Star players.
Prior to NIL those players (Rival 5/4 Star) would go to Alabama.
With NIL, Alabama is probably going to have to shell out significant $$$ to attract those players (Rival 5/4 Star) who are now looking at what NIL money another Top 20 program will offer them.
Typically, Pitt and Rutgers go after Rival 3-Star players and will not be paying big bucks to attract Rival 5/4 star recruits IMO.
NIL will be an added expense for most schools but maybe much more for a Power Program like Alabama.
HAIL TO PITT!!!!
Example:
Alabama (2024) recruited 28 players: 4 Rival 5-Star, 17 Rival 4-Star and 7 Rival 3-Star players.
Pitt (2024) recruited 21 players: 4 Rival 4-Star, 17 Rival 3-Star players.
Rutgers (2024) recruited 24 players: 2 Rival 4-Star, 20 Rival 3-Star players.
Prior to NIL those players (Rival 5/4 Star) would go to Alabama.
With NIL, Alabama is probably going to have to shell out significant $$$ to attract those players (Rival 5/4 Star) who are now looking at what NIL money another Top 20 program will offer them.
Typically, Pitt and Rutgers go after Rival 3-Star players and will not be paying big bucks to attract Rival 5/4 star recruits IMO.
NIL will be an added expense for most schools but maybe much more for a Power Program like Alabama.
HAIL TO PITT!!!!
Just want to say I have *no* idea how much an athlete should be paid in an ideal world. But I don't have any idea how many *anyone* should be paid in that world. Instead, I would leave that to be determined by the market -- except that I would have a salary cap or a luxury tax to keep the haves from destroying the have-nots.
And the oddity is that only 5-10% of Rutgers players will make it to the NFL. And that's were I think more thoughtful discussion is needed. Many of these guys do earn their degrees and get well-paying (not NFL or professional sports paying) full-time jobs that they would not otherwise have had access to if they did not get their college degree.
Fran Brown was talking about this exact thing in that podcast I posted. I did not post that to be inflammatory, but I thought that a lot of what Fran Brown talked about made sense and sounded a lot like the way Greg Schiano looks at things.
The other oddity is that if we only paid two star running backs, a WR, a QB and a few key defensive players the big bucks, they are the ones who need it the least, presuming they will go to the NFL and make big bucks.
There are a lot of wrinkles to iron out.
Thank you! I'm sure you're too young to remember slide rules. They had one central flaw -- they couldn't tell you where the decimal point should be.
There was a salary cap ... each individual's compensation was capped at tuition, housing, meals, and books.
Oh great point! You've proven the pay players more argument perfectly. Excellent job!
Welcome to "the dark side".
What happens to salary caps as money coming into the sport (such as massive media rights increases)?
They also go up.
