Mar. 19, 2016
As Athletes Cut Down The Nets, The NCAA Count Its Net Earnings
I want you to notice the extraordinary amount of money that is being made during the NCAA basketball tournament. Hey, enjoy the games, the upsets, and the pageantry of the time so many call March Madness.
Just understand at the end of the day, this really isn’t college athletics. It is big business. According to Fortune magazine, the NCAA tournament has generated $7.5 billion in advertising sales since 2005. That beats the Super Bowl.
And here is how they do it: Everything you see on the television screen is sponsored by some major corporate entity, from the pre-game show, through the halftime show, and even the postgame show. The same is true for games that are streamed on your computer, tablet, phone and if you happening to be listening on the radio.
In 2015 Final Four teams earned $8.2 million dollars each for making it all the way to the big dance. Of course, the team didn’t earn a damn thing, even though they were the people that the audience paid to see play. The coaches and the university gets the loot.
Of course, for the top programs, the regular season isn’t so bad, either. It is really extraordinary the earning power some of the power teams have. The University of Louisville sits on top of all of college basketball in earnings. According to Forbes they led the nation in earnings from 2009 to 2014, generating roughly $40 million a year for the school. That is enough to pay for 535 students to attend Louisville tuition free for four years.
It is no wonder coach Rick Pitino can get away with scandalous dealings in his personal life, and with the team. He is bringing in the young men who make the school money.
In 2015, Nerd Wallet, a financial website, put together an incredible study, which shows the net worth of the NCAA’s top players. A star NCAA player at a big time program like Louisville, or Kentucky, is worth nearly $500,000 to the university. .
Nerd Wallet explains its method: "We looked at the numbers to estimate the financial values of student athletes in this year’s top-ranked basketball programs. To do this, we adopted a revenue-sharing model similar to the one used by the NBA, where many of college basketball’s top players are headed.
Under this model, student athletes would be given 50% of all team revenues, which their schools generate through ticket sales, TV deals, merchandising and more. We also used this to estimate average player values at each of the men’s basketball teams ranked among the Associated Press Top 25."
In 2015, Duke’s Jahlil Okafor was worth $2.6 million, and each player on the Duke roster was worth $1.1 million to their school. I understand that things work out well for a talent like Okafor, who was selected with the No. 3 overall pick in the 2015 draft by the 76ers, and signed a multi-million dollar contract.
However, for every kid like Okafor, there are literally dozens and dozens who make the NCAA basketball, and in particular the NCAA tournament, the tradition it is. They never see a day on an NBA court, or a penny of the NBA money. Their rewarded should go beyond a college scholarship, considering the incredible money everyone else is making.
I hope you are seeing what is going on here. More importantly, I hope the athletes are seeing it. They deserve a piece of this very lucrative pie.