College Athletes: Should They be Paid?

We'll move away from the professional players in this post and talk a little bit about collegiate players. It's been long debated whether or not they should get paid, but the topic has been quite a bit more popular than usual the past few years. NCAA athletes currently aren't even allowed to sign items for money or sell their NCAA for money either.  Many of these athletes do get free college tuition though, which is a huge benefit.

Some studies have shown that athletes put in around 40 hours a week on their sport.  That includes games, practices, training, watching film and more.  For football it is estimated that some athletes spend just under 45 hours a week whereas basketball and other sports are a little bit under 40. If they used those hours to work they'd make just under $300 in a week with Iowa's minimum wage. These athletes are probably taking 12-15 credit hours as well, which equals out to be around 55 hours a week including both sports and school. These athletes aren't getting much time to study during the week, let alone just relax after their tough practices.  

Johnny Manziel is a big reason this topic has been on the rise in the past few years.  He generated a huge amount of revenue for Texas A&M, or at least it is believed that he is the main reason why the school made so much money that year. Let's see why.  Manziel won the Heisman Trophy in 2012.  From September 1, 2012 to August 31, 2013 the school made a whopping $740 million in donations. That is a record for Texas A&M. In fact, the school hadn't ever come within even $300 million of that amount ever. The school even auctioned off a dinner with Johnny for $20,000.  Someone literally paid $20,000 just to have dinner with him. The year he was quarterback, the bookstore had sold out all 2,500 replica #2 jerseys they had in stock. A typical jersey goes for at least $60, so let's just do the math. 2,500 jerseys at $60 is $150,000. That's not counting jerseys that aren't sold in bookstores, like online fan shops. Manziel saw literally none of that money. Is that fair? I don't think so, but the NCAA thinks otherwise.

Players aren't allowed to sell NCAA merchandise or items signed by them either.  If they sign one of their jerseys and sell it to someone, it is considered illegal by the NCAA and usually ends in suspension or some type of punishment.  In 2010 another great player, Terrelle Pryor and a few of his teammates were suspended because they sold jerseys, champions rings, and other items. They also got tattoo discount of some sort that had a part in the suspension as well. That, in my opinion is wrong, but selling items that belong to you? If it's mine I should be able to do what I want with it. The fact that players can't use their popularity to make money, like signatures for example, is just something I don't seem to understand.  

Salary Caps

Salary caps are limits put in place that allows teams to spend only a certain amount on player salaries per year. They help keep teams within the league more even. For example, if the league's salary cap is $100,000, they can't sign a bunch of really good guys to big contracts unless they want to basically spend little to none on all their other players. Not being able to sign multiple great players allows the spread of sports stars in the league to different teams. It also helps keep costs down as players will want to sign a contract worth as much money as they can. Players will understand that signing a big contract might keep the team from signing other players that will help the team. Some leagues do not have salary caps, like the MLB. Teams that go over this limit have to pay a penalty to the league. Let's take a look at salary caps throughout professional sports.

NBA
The 2015-2016 salary cap will be set at $70 million.  Last years salary cap limit was $63.1 million dollars, so the increase is a whopping 11% from last year.  The highest team payroll is the Cleveland Cavaliers, who have player salaries that equal out to a total of just under $95 million. The lowest team payroll is the Portland Trail Blazers, which is $41,410,000. This is almost a $54 million difference between them and the Cleveland Cavaliers. They can use the extra money that they can spend in free agency sometime or trade for a player with a high salary.  An NBA team is allowed to have 15 players on their rosters. If players were all payed equally, they'd all have salaries of $4.7 million.

MLB
Major League Baseball is one of the sports that does not have a salary cap. This allows teams to spend as much as they want on players without having to pay penalties. Teams who make a lot of money or who are in bigger markets like New York City or Los Angeles tend to have enough money to spend lots on player salaries. The Los Angeles Dodgers have a team payroll of$272,789,040, which is the highest in the league. The Miami Marlins team payroll is $68,479,000, the lowest in the league. This is a difference of more than $200 million! A higher team payroll doesn't always mean better success as the Houston Astros' team payroll was the second lowest in the MLB, but yet the team made the playoffs. The Boston Red Sox had the third highest team payroll but failed to make the playoffs.

NFL
The NFL salary cap for the 2015 season is set at $143.28 million. The New York Jets have a team payroll of $152.36 million while the lowest is the Tennessee Titans, which is set at $128.23 million. The NFL has a smaller gap between the highest and lowest team payrolls, as it is only about $ 25 million.  Each NFL team is allowed to have 53 men on their roster, so if every player was played equally, they'd make $2.7 million. Keep in mind that the NFL makes the most money out of any professional sport, yet it seems that the bigger stars in the NFL don't make near as much as the bigger stars in the NBA or other sports with salary caps.

Revenue from Concession Stands

Ever wondered how much teams make from concession stands during their home games?  There are certain factors that contribute to these numbers, obviously, such as the number of fans attending the game and differing prices between stadiums. To give you an idea of how much they make, all MLB ballparks combined bring in more than $500 million in one year. That's about $17 million a year per team if each team equally made the same. Let's take a look at how these teams make these huge revenues.

Hot dogs are huge money makers for MLB teams.  In 2013, there was projected to be over 20 million hot dogs sold at stadiums throughout the season. At $4.50 per hot dog (which some teams charge more) that's over $90 million in sales! It is also estimated that each vendor sells around 150 hot dogs per game. Each vendor who has to walk throughout the stadium has carries a bin full of hot dogs that weighs about 40 pounds full. Most vendors walk around 4 to 5 milers per game on average, too! Concessions profit more than 60% from each hot dog sold during a ballgame as well. Next time you're at a Major League baseball game look around and see how many fans have hot dogs. Also, take a look at the price of them, as some stadiums charge up to $6.50 per dog. 

Who doesn't love to get a little buzz while watching their favorite team play? Beer is another way teams make money from concessions. Drinks at professional sporting events usually have a profit margin of at least 90%.  This includes soft drinks as well, but beer should be close to that once we see how much it costs to buy a beer at a game. Let's take a look here at the average cost of beer by certain professional sports. 

                      NBA: $7.41           NHL: $7.34
                      NFL: $7.05           MLB: $6.09 

Over $7 for a beer? Crazy to think that it costs that much, but still over 60,000 beers are sold on average during NFL games. I'd suggest throwing a few back before the game starts to save a few bucks while inside the stadium. Three beers at a professional game would cost you about the same as it would to buy a full case of beer in most places.  

To find out more about concession stand information, visit The Economy of Food at Sporting Events.