Mark Coomes of Insider Louisville wrote
an interesting articlelast week about the vast disparity between fair market value for college athletes and the value of a scholarship.
The main point: Even if all 13 players on the top basketball teams were paid above market value ($500,000 per year), the programs would still be wildly profitable.
Let’s take that a step further.
According to Forbes, seven schools made more than $US12.4 million in profit off their basketball teams last year. Of those seven, four (Louisville, Kentucky, UNC, and Kansas) made $US19.9 million or more in profit.
The average NBA team made $US11.89 million in profit last year, according to the annual Forbes list of team valuations.
This really isn’t a fair comparison. NBA teams have to give 50% of total revenue to players. Kobe Bryant alone makes more money in salary (~$30 million) than the most lucrative basketball team made in profit (~$24.6 million).
But as a thought exercise, let’s say the country’s biggest, most profitable college hoops teams started paying players $US500,000 per year (way more than anyone is talking about right now, mind you).
Here’s what the four top schools would make:
- Louisville, $US18.1 million
- Kansas, $US13.4 million
- UNC, $US13.4 million
- Kentucky, $US13.4 million
They’d all still be making more profit than the Clippers and Mavericks, and Louisville would be making more than the Heat.
This is a pretty elementary analysis. But the point is that these schools are making tons of money because of free labour.
Business Insider Emails & Alerts
Site highlights each day to your inbox.