On Saturday, ESPN’s traveling college football show College GameDay was in Madison, Wis., to preview a huge Big Ten game. ESPN and other networks pay handsomely to air Big Ten sports — starting next year, the conference will pull in $440 million per year to broadcast football and basketball. Reports suggest Wisconsin will receive about $40 million of that income directly. The Badgers football team wore their new Under Armour uniforms in Saturday’s prime-time game. Under Armour pays Wisconsin about $10 million per year to have their logo on the jersey.
Wisconsin Athletics is a tidy little business: its 2016-17 operating budget is $122 million. (That’s a bigger budget than the city of Green Bay, population 104,000.) The athletics program pays for staff, travel, medical coverage, facilities, meals, marketing, and the entire tuition bill (including cost of attendance stipends) for its scholarship athletes. The staff budget includes $1.1 million for the athletic director, $2.3 million for the football coach, and $1.75 million for the men’s basketball coach. Despite those expenses, this year the Wisconsin athletics department is transferring $11.5 million to the university, a world-class school now ravaged by cuts in state funding.
This is the context in which Wisconsin basketball star Nigel Hayes showed up near the ESPN set with a sign noting that he’s a “broke college athlete.”
Hayes is a senior who flirted with the NBA draft last spring. Before he decided to return to Madison, mock drafts had him in the late second round. He has a future in professional basketball, but that future may involve the NBA D-League (where salaries are currently near the federal minimum wage) or playing overseas.
Hayes is a brilliant college player — first-team All-Big Ten last season — who will need to develop his perimeter skills much more fully to have a real career in the NBA. He is far from a sure thing at the next level. Most NBA draftniks considered it wise for Hayes to return to Wisconsin: Further skill development and another run at the Final Four could boost his stock, which would boost his earnings. Plus he gets a degree out of it. (He cited finishing his business degree as a big factor in his decision to return.)
Hayes will earn that degree without acquiring student debt, and that’s something that can’t be ignored. A free four-year college education is not without value. In addition, Hayes is receiving specialized training, access to great facilities, and quality medical attention. He receives a $5,000 annual stipend, as well. This is the bargain: Hayes trains hard, stays eligible, and plays 30-40 basketball games, and he gets all of that — an education, job training, and a little cash — in return.
But even when taking all of those benefits into account, Hayes is getting ripped off.
In a 2015 study published in the Journal of Sports Economics, University of South Florida finance professor Richard Borghesi calculated the financial benefit athletic programs receive from top basketball recruits. Borghesi found that five-star basketball recruits generate $625,000 in annual marginal revenue for their schools, and four-star recruits generate $178,000. On top of that, the presence of high-level basketball recruits boosts academic donations to schools, largely due to improved performance by the basketball team due to the presence of said recruits.
The study found that assuming a 50/50 revenue split between players and the NCAA and valuing scholarships and high-quality training services at $120,000 per year, fair compensation for five-star basketball recruits would be $613,000 per year. Fair compensation for four-star recruits would be $166,000 per year.
Hayes was a four-star recruit from Toledo with offers from Wisconsin and Ohio State. By choosing the Badgers, he gave the Wisconsin athletics program a major revenue boost. Hayes has twice considered entering the NBA draft and instead returned to Madison. Each decision made in Wisconsin’s favor boosted the Badgers’ expected performance and by extension boosted the Badgers’ bottom line. This makes perfect logical sense: Hayes is expected to be the best player in the Big Ten this season, and the Big Ten makes a ton of money off basketball. Of course his decision made money for Wisconsin, the Big Ten, and the NCAA well beyond the benefits he receives!
Hayes sees none of that windfall personally. Hence his protest.
Mike DeCourcy of The Sporting News claims that because Hayes decided to return to school, he has little standing to make this stand. The problem, of course, is that Hayes is not arguing that he was deceived by Wisconsin or the NCAA. He is arguing that the deal the NCAA offers to high-level athletes is a bad one. Hayes is arguing that because college athletes generate so much revenue for the schools, they should be cut into the deals with TV networks, apparel companies, and sports drink makers.
DeCourcy and others in the anti-paycheck camp argue that the value of a college education is enough compensation for athletes. But (no disrepect to humanities professors) the value of a college education is in the embossed piece of paper they hand you at the end of it. To fully take advantage of college, athletes need to graduate. The vast majority of students need at least four years to do that. (Wisconsin’s four-year graduation rate is 60 percent. In other words, 40 percent of incoming UW freshmen don’t graduate in four years. Some drop out, some take longer.)
So elite athletes are compensated with a free Bachelor’s degree they can only really earn by also giving four years of labor to the university. Some choice, right?
These are the facts at hand: A cabal of college sports administrators and coaches are profiting handsomely off the hard work of elite athletes, yet refuse to compensate those athletes fairly. Hayes is a direct victim of that decision.
It’s too late for Hayes — he’ll remain a “broke college student” this school year. If the NCAA changes its rules as backlash grows, Hayes won’t benefit. Future Wisconsin basketball players would.
DeCourcy called Hayes “imprudent” for ripping a deal he willingly took. The damn definition of prudent is acting with care and thought for the future. There’s nothing Hayes — a senior with nothing to gain — could do more prudent than protest the NCAA.
