4 ms·

"Profit" just isn't really the right concept here. They pay their coach $3.2 million every year. In 62% of US states, the highest paid public employee is a foot

"Profit" just isn't really the right concept here. They pay their coach $3.2 million every year. In 62% of US states, the highest paid public employee is a football coach. In another 16% it's a basketball coach. Regardless of whether they return some of their windfall to the endowment, they're raking in cash. Hollywood movies often show a loss after the studio deducts all the expensive things they bought themselves. Everybody with points against net gets nothing, but the studio still does just fine.

scott_s 7y ago
I think profit is the right concept. People see the massive spending of these programs, and even if it strikes them as extravagant, they also see the massive revenue of these programs. I think most discussions around this issue take as an assumption that the revenues covers the spending. I think a common way of thinking is "Yeah, it's pretty ludicrous for our university to spend that much money on the football program, but they make it all back, so it's a wash." But it usually doesn't. That's important, and I think would change how people considered the programs if this fact was more widely considered. I don't think Hollywood movies are a good comparison. The studios will play accounting tricks by setting up shell companies for the purposes of screwing over the people who actually made the movie [1]. That's just pushing paper around, though: if the movies makes more than the studio spent, they turned a profit. Universities aren't doing that; many of their football programs are actual money losers, and they get that money from student tuition or the state if it's a public university. [1] https://www.techdirt.com/articles/20121018/01054720744/hollywood-accounting-how-19-million-movie-makes-150-million-still-isnt-profitable.shtml https://www.techdirt.com/articles/20121018/01054720744/holly...
- tunared 7y ago
  The football programs are mostly non-profits, same with the NCAA. So no, profit, at least for the major programs, is not a concern. The programs receive millions from multiple sources that are spent on staff, coaches and other sports that need to be spent (Universities are not supposed to be profit making institutions). While the athletes that are generating the revenue through their performance every Saturday are paid with scholarships and money for room and board (can't be more than $60k or $70k a year - assumption here). Works out great for the coaches and administrators, not so great for the athletes. It is also not in the NCAA, college administrators, boosters or coaches interest to have the current setup change. Why mess with a good thing. No competition for player salaries leaves more in the coffers to pay the coaches.
  - dragonwriter 7y ago
    > The football programs are mostly non-profits, same with the NCAA. So no, profit, at least for the major programs, is not a concern. Non-profit doesn't mean “doesn’t earn profits” or “doesn’t prioritize profit”, but “doesn’t return profits to investors”.
    - tunared 7y ago
      We can agree that profit is gross revenue minus expenses, correct? Non-profits are focused on maximizing the revenue, but not on the profit for the exact reason you stated, there are no share holders or investors that need to be paid dividends, etc. The non-profit is incentivized to put the net revenue back into the organization. This can be in the form of staff salaries, facilities, other programs in the university. The "profit" portion in a given year means they are just carrying over the revenue for future operations or to stash in a fund. It should not be used in a argument for the "major" universities or top performing programs as to whether or not they should play the players. Revenues are not an issue in those cases. Don't cry to me (universities) that you don't have the money to pay student athletes when your university made over $100+ million dollars in a year and you "barely made a profit" as a non-profit organization. I can't find the original HBO Real Sports link, but they go into depth about the Non-profit status and the way the funding is spent. It is a real eye opener and made me rethink how the argument that profit/revenue should be considered when dealing with the larger organizations. Below are references, but not only highlights. https://www.hbo.com/documentaries/student-athlete https://www.hbo.com/documentaries/student-athlete https://www.youtube.com/watch?v=NK5BmWP1y98 https://www.youtube.com/watch?v=NK5BmWP1y98
      - dragonwriter 7y ago
        > The "profit" portion in a given year means they are just carrying over the revenue for future operations or to stash in a fund. It should not be used in a argument for the "major" universities or top performing programs as to whether or not they should play the players. Why not? The economic value of work to the entity for which it is performed is a significant factor in the criteria under which the law now requires other formerly unpaid, often student, workers such as many interns to be paid, even when their employer is a nonprofit. Why should athletes be treated worse?

scott_s 7y ago

I think profit is the right concept. People see the massive spending of these programs, and even if it strikes them as extravagant, they also see the massive revenue of these programs. I think most discussions around this issue take as an assumption that the revenues covers the spending. I think a common way of thinking is "Yeah, it's pretty ludicrous for our university to spend that much money on the football program, but they make it all back, so it's a wash." But it usually doesn't. That's important, and I think would change how people considered the programs if this fact was more widely considered. I don't think Hollywood movies are a good comparison. The studios will play accounting tricks by setting up shell companies for the purposes of screwing over the people who actually made the movie [1]. That's just pushing paper around, though: if the movies makes more than the studio spent, they turned a profit. Universities aren't doing that; many of their football programs are actual money losers, and they get that money from student tuition or the state if it's a public university. [1] https://www.techdirt.com/articles/20121018/01054720744/hollywood-accounting-how-19-million-movie-makes-150-million-still-isnt-profitable.shtml https://www.techdirt.com/articles/20121018/01054720744/holly...

tunared 7y ago
The football programs are mostly non-profits, same with the NCAA. So no, profit, at least for the major programs, is not a concern. The programs receive millions from multiple sources that are spent on staff, coaches and other sports that need to be spent (Universities are not supposed to be profit making institutions). While the athletes that are generating the revenue through their performance every Saturday are paid with scholarships and money for room and board (can't be more than $60k or $70k a year - assumption here). Works out great for the coaches and administrators, not so great for the athletes. It is also not in the NCAA, college administrators, boosters or coaches interest to have the current setup change. Why mess with a good thing. No competition for player salaries leaves more in the coffers to pay the coaches.
- dragonwriter 7y ago
  > The football programs are mostly non-profits, same with the NCAA. So no, profit, at least for the major programs, is not a concern. Non-profit doesn't mean “doesn’t earn profits” or “doesn’t prioritize profit”, but “doesn’t return profits to investors”.
  - tunared 7y ago
    We can agree that profit is gross revenue minus expenses, correct? Non-profits are focused on maximizing the revenue, but not on the profit for the exact reason you stated, there are no share holders or investors that need to be paid dividends, etc. The non-profit is incentivized to put the net revenue back into the organization. This can be in the form of staff salaries, facilities, other programs in the university. The "profit" portion in a given year means they are just carrying over the revenue for future operations or to stash in a fund. It should not be used in a argument for the "major" universities or top performing programs as to whether or not they should play the players. Revenues are not an issue in those cases. Don't cry to me (universities) that you don't have the money to pay student athletes when your university made over $100+ million dollars in a year and you "barely made a profit" as a non-profit organization. I can't find the original HBO Real Sports link, but they go into depth about the Non-profit status and the way the funding is spent. It is a real eye opener and made me rethink how the argument that profit/revenue should be considered when dealing with the larger organizations. Below are references, but not only highlights. https://www.hbo.com/documentaries/student-athlete https://www.hbo.com/documentaries/student-athlete https://www.youtube.com/watch?v=NK5BmWP1y98 https://www.youtube.com/watch?v=NK5BmWP1y98
    - dragonwriter 7y ago
      > The "profit" portion in a given year means they are just carrying over the revenue for future operations or to stash in a fund. It should not be used in a argument for the "major" universities or top performing programs as to whether or not they should play the players. Why not? The economic value of work to the entity for which it is performed is a significant factor in the criteria under which the law now requires other formerly unpaid, often student, workers such as many interns to be paid, even when their employer is a nonprofit. Why should athletes be treated worse?