Dr. Richard Borghesi

USFSM professor calls for fair student-athlete compensation

By: Rich Shopes

Posted: February 21, 2017

SARASOTA, Fla. (Feb. 21, 2017) – A USF Sarasota-Manatee professor has written two studies that suggest college football and basketball players be compensated in accordance with the billions they bring to athletic programs.

“[I]f amateurism rules were rescinded and college football players were compensated according to their revenue-generating abilities, … [five-star recruits] would be entitled to annual salaries [up to $799,000], in addition to athletic scholarships covering tuition, books and room and board,” says Dr. Richard Borghesi in his study Pay for Play: The Financial Value of NCAA Football Players, published this month in Applied Economics. That top-salary figure applies to the 30 most elite athletes within a one- to five-star ranking system; on average, rated players would receive $66,000 annually.

Dr. Borghesi, an associate finance professor, says NCAA Division I football and basketball players generate billions for college athletic programs through ticket sales, concessions, TV contracts and personal appearances. They also provide revenue through alumni giving, institutional royalties, corporate sponsorships and luxury box sales.

The men’s Division I NCAA basketball tournament is one example of the billions at stake. Under a 2010 agreement, CBS Sports and Turner Broadcasting agreed to pay the non-profit NCAA $10.8 billion over 14 years to broadcast the games.

“That was just for the NCAA’s 64-team tournament,” said Borghesi, who closely examines the pay issue involving basketball in another, related study, The Financial and Competitive Value of NCAA Basketball Recruits, published last August in the Journal of Sports Economics.

Whether to grant salaries to student-athletes has been debated for years. Northwestern University football players came closest to upending the system two years ago. Required to devote roughly 40 hours per week to football, the players argued they should be treated as employees and permitted to unionize, enabling them to collectively bargain employment terms, including compensation.

Their argument resonated with the National Labor Relations Board, which initially granted their request at a regional level before declining to assert jurisdiction at the national level.

Although the players ultimately lost, Dr. Borghesi says the Northwestern case represents a sign that the public is tiring of the disparity between student-athletes’ compensation – mostly tuition and room and board – and the hundreds of millions of dollars made yearly through TV contracts and other deals.

“The networks and universities make billions from the universities’ games and the players make a pittance of that, and society is seeing that more often as unfair, and it’s being litigated,” he said.

His studies examine the finances behind college sports and suggest a method of pay-for-play compensation based largely on talent and player contributions to their teams, or potential contributions in the cases of freshmen athletes.

Along with other factors such as tuition and access to world-class athletic facilities and coaches, his studies take into account the NFL’s pay structure where athletes receive roughly 47 percent of league revenues, as well as a system developed by 247sports.com, an accepted industrywide evaluation resource, to rate student-athletes’ anticipated performance.

Under 247sports’ system, players are assigned ratings from one to five stars depending on their potential impact as freshmen. Later as upperclassmen, their ratings could be adjusted based on performance.

High-impact, marquis football players would receive $799,000 yearly. Top basketball players would make $613,000 per year, according to Dr. Borghesi’s estimates. Even freshmen student-athletes would stand to benefit.

“From 2003 to 2014, mean annual football revenue was $2.28 billion, so the player revenue portion totals $1.07 billion. Allocating 25 percent of this amount to freshman recruits means that $268 million is available for scholarships and salaries,” he wrote in Pay for Play: The Financial Value of NCAA Football Players.

Dr. Borghesi goes on to say: “We examine the contributions of players to football revenue and find that if an industry-standard revenue sharing agreement were implemented, five-, four-, three-, and low-star players would receive scholarships plus cash wages of $799,000, $361,000, $29,000, and $21,000, respectively.”

Dr. Borghesi said he hopes his studies become a starting point for talks about fair compensation for college athletes. He said he focused his studies on football and basketball programs because they pull in the largest TV contracts and other revenue streams by far, while providing financial support to secondary athletic programs.

An associate professor at USFSM’s College of Business, Dr. Borghesi said he’s been fascinated by the revenue-generating capacity of college sports for years.

“I’m always looking for data and I just found this topic interesting,” he said. “I think the biggest surprise to me was how much the networks paid for just the NCAA basketball tournament, $10 billion over 14 years.

“It’s crazy, for just one month of programming,” he said. “That’s a function of how much interest there is by the average fan.”

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