Finance Professor Creates College Football Payment System | Robert Littal Presents BlackSportsOnline

Finance Professor Develops Pay System for College Football Players

by Erin Simon | Posted on Friday, January 24th, 2014

Johnny Manziel NCAAF Pay System

According to Karl Borden, a professor of finance at the University of Nebraska at Kearney,  Division I football players should receive some form of compensation. Especially the 98 football players this year who are declaring for the NFL draft in May. Since many of these players will go undrafted and will “be out of school after having contributed to a business worth billions, but with little to show for it and, too often, few skills to negotiate post-football life,” Borden believes now is the time to pay.

Many of you will say, well these players should not get paid during collegiate competition because of their amateur status. Well, Borden came up with a payment system that will establish a fund that does not pay student-athletes while they are amateurs but instead in the future.

Don’t compensate student athletes while they are playing and (one hopes) studying. Set a future date when funds will be made available to them. Six years after ending their college athletic careers? Eight? Pick a number. The current scholarship system should stay in place with the costs built into the long-term compensation formula (paid as a component of the compensation package).

Division I universities should pay funds for player compensation annually into an investment pool, and athletes should earn “Participation and Achievement Points” based on a formula that rewards and encourages athletic and academic achievement. The points could be earned by suiting up for a game, by participating in plays on the field, by serving as a tackling dummy on a practice squad (think “Rudy”), by serving as team captain, etc. Points would also be earned by completing academic credits, maintaining a high grade-point-average, finishing a degree, or earning professional certification in careers such as accountancy, nursing and teaching.

The delay in player access to the fund pool provides a time after athletic eligibility to set new professional goals and complete academic work. Some provision might be included to allow the pool to pay out continuing scholarships to assist players after their athletic scholarships end, but the waiting period is essential to encouraging accomplishment on the field and in the classroom.

Once the delay period is completed, athletes should be given the usual range of investment-fund payout alternatives: lump-sum vs. term or life annuities vs. retirement-fund options. The value of players’ payouts would be determined by their Participation and Achievement score. The fund should also require that participating athletes receive (at fund expense) solid financial advice and counseling. Universities are good at managing investment accounts. Let the fund be managed professionally by a board elected by the foundation directors of participating universities.

Schools could also allow players to sign advertising and promotional contracts during their playing years if the revenue is paid into the fund to benefit fellow players. Participation and Achievement points could be awarded for doing so—but the big revenue producers would be the Heisman candidates and winners, like Johnny Manziel, and other high-profile players who would be well compensated by the NFL and shouldn’t need the fund.

If the players are like Johnny Manziel, who will receive sponsorship and extra money, they could forgo their fund.

The NCAA might even encourage those big-name players to forgo their own fund participation and use their popularity to generate revenue that benefits the other 95% of players who help them reach stardom but will themselves never play on Sunday.

I must say, for all the big schools like Texas and Alabama, this is not a bad compensation proposal that could benefit players after college and encourage student-athletes to stay longer in college, improve academics and etc.

[WSJ]

About the Author

Contributing writer and sports lover. Ice cream enthusiast. Secret nerd and an avid Netflix supporter. Simple enough. Follow: @erinasimon


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