The College Athlete Profit Sharing Plan

NCAA Football: Cotton Bowl-Texas A&M vs Oklahoma

College athletics has exploded in recent years. Demand for tickets for college athletic events has skyrocketed, as has team merchandise, tv contracts and everything else surrounding the major sports. These athletes are making the NCAA, their Universities, and companies, MILLIONS of dollars. The problem? They are getting only a college scholarship and maybe a stipend for their skill that is in HIGH demand. Now this is where it gets tricky. There are a hundred different arguments to say why they should NOT be paid. I, for many years, was one of them until I saw numbers.  I came up with this solution. No, it isn’t perfect, but hopefully it provides some discussion and the right thing happens in the future.

Having played division 2 college football I was given a scholarship to play football but still worked several jobs, maintained above a 3.2 GPA, all while putting in 30-40 hours a week dedicated to my sport(s). I also had trainers, coaches, tutors, and teachers surrounding me and available to me at all times nearly to make sure I was succeeding. Not to mention great facilities and meals, as well as a sport that teaches time management, responsibility, creativity, innovation, determination and working with diverse groups in a team dynamic. I even had the chance to meet alumni at my university to network and make connections for after college and potential job prospects, and all of this was only at the Division 2 level.  My point is you would have to TRY to fail with so many people and processes in place to allow you to succeed. So when you DO graduate, (Which NCAA athletes do at a higher rate than traditional students) you as an athlete will have gotten plenty out of your college experience to make you succesful in life. So why then should we still pay college athletes?

Because it is fair. Here is a breakdown of Revenue for Athletics Departments as well as expenses in 2011. This doesn’t count the millions that apparel companies and broadcast companies make off of these kids backs. I have friends who while in college had modeling and acting careers, but they weren’t called amateurs and paid in hugs. They were paid as professionals even though they still went to classes. If you earn your organization money, you should enjoy a piece of the profit.

It costs some schools money each year to keep their athletics department active while other university athletics departments are what keep a school going and growing. I’ve talked to countless students who have admitted the main reason they chose their college was because it was their favorite sports team and they wanted to attend games. Growth follows athletic success in this country.

So how do we make it fair? Or at least how do we improve it?

Like any good company or business process you share the wealth with the people who make your venture go. Its a basic profit-sharing plan. Yes, I know it will be inevitably more complicated to implement and that is why nothing has been done yet. Fear. But follow this.

Every student-athlete signs a grant-in-aid (scholarship) offer when they agree to be a student athlete for their University.  When they do this they ALSO sign a profit-sharing plan with the university. Thus, every dollar the university makes off of selling broadcast rights, logo rights, jerseys, ticket sales, and gifts to the athletics programs, a portion goes to a profit-sharing pool.

Now, you might think, College students with too much money running around will be a disaster. Problem solved. Signing this PFPA (Profit-Sharing Plan Agreement) is run by an athletics director who reports to the NCAA. The plan is contingent on the student-athlete graduating, meaning he or she will not get paid until she graduates from that university. It is also a tiered academic performance based plan, meaning if a student graduates with a 4.0 GPA he or she gets 100% pay out. If he or she graduates with a 3.5 GPA, 90%. 3.0, 85%. 2.5, 75%. Or something determined to be fair.

profit share

This motivates students to take academics very serious because they must graduate to earn their profit, and they must keep good grades to stay eligible. 

Now, you may state that some programs make no money or lose money and that is something perhaps the NCAA or a governing body would have to address. Do you pool revenue nationwide and then distribute or do you allow teams who have made big money to pay their students well? I think it should be school by school. You go to college for college first and if you happen to make profit while playing ball, great. Not a guarantee, just like in life.

With all that aside, What a better reward and a more fair reward than handing a student-athlete a diploma and a check for representing their university well, having great grades and making their alma mater so much money over the past 4 years?

THAT would make me want to donate back to my school in future years.

What are your thoughts?

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