In the 2010-11 school year, the University of Texas football program reported more than $95 million in revenue and a profit of more than $71 million – the most in the nation. The Penn State football program, which I’ve blogged about previously due to the indiscretions of a former assistant coach, had revenue of more than $72 million, and more than $53 million in profit, placing it second behind Texas.
The University of Louisville’s men’s basketball team reported more than $40 million in revenue, and profit of more than $27 million, placing it 16th on The Business of College Sports’ Top 50 Most Profitable FBS Football and Men’s Basketball Programs. It was the most profitable men’s hoops program.
The players on those teams need to be paid because they are a huge driver of profit and brand identity for their schools. Take Texas, for example. The Longhorns suited 119 football players in 2010, and the cost for tuition, room and board for them – their scholarships – was a substantial cost, but nowhere near the $71 million the program made in profit. I couldn’t find 2010-11 data, but according to the Be A Longhorn website (notice the branding: Texas’ burnt orange and the Longhorn football helmet logo), the full cost for a student for tuition, room and board for the 2011-12 school year was $50,568 for non-residents. Multiply $50,568 by 119 players and you get $6.107 million. Obviously, not all of those players are non-residents, and it doesn’t include coaches’ salaries, travel and other things, but you see my point – $6.017 million is a pittance compared to the revenue and profit those players are responsible for generating. Plus, at many universities, those two sports fund much of the athletic department, theoretically broadening the brand’s reach and identity.
Put it another way. When you think about the University of Texas, chances are football comes to mind first. Ditto for Penn State and most of the other schools on that list. Don’t get me wrong, they’re all very good academic institutions, but much of their brand identity – even down to the colors on used on their websites and marketing materials – are due to football or, to a lesser degree, basektball.
So if the players in those two sports are driving all that revenue and profit for their universities over their four-plus years, which has a very tangible brand benefit, shouldn’t they be compensated accordingly?
Yes, they’re getting a great education (assuming they go to class, but anyway …); I’d argue they do more to promote their university’s brand identity than their administrators.
Postscript: I just ran across Forbes‘ 2012 college football valuations, and the top valued program is Texas, at $133 million. Valuations are based on data from the 2011-12 fiscal year. The Longhorns’ football program increased in value from $129 million the year before. You can view a slideshow of the top 10 programs here.
Image credit to Houston’s Sportstalk 790.