Does a scholarship equate to market worth?

The San Jose Mercury News (link here) recently set out to learn if the cost of a college scholarship for a high-profile college football player was fair compensation. The paper created an economic model to determine what junior Marshawn Lynch, a tailback for the University of California, would be worth this season if college football were subject to the open market, similar to the National Football League. After examining Cal’s finances and interviewing economists familiar with college athletics, the Mercury News calculated Lynch’s worth to be $800,000. Yet, according to the paper, Lynch will instead receive a scholarship worth $16,800, plus the cost of books.

Jeff Tedford, head football coach at the University of California, told the Mercury News that a scholarship doesn’t cover the full cost of attending college, and in certain cases he supports giving players money for incidentals. The paper noted that Lynch has never requested any additional benefits. Tedford requested the paper not name his players in the story and the NCAA declined to comment. The Mercury News stated the lack of responsiveness was due to Tedford’s concerns for the players because of the sensitivity of the issue, and the NCAA’s role as defendant in an antitrust lawsuit in which former athletes are demanding scholarship limits be removed.

Based upon the data reflected in Lynch’s worth on the market, the Mercury News concluded that elite athletes in revenue-producing sports receive only a fraction of what they bring in. During the 2006-07 academic year, the Cal football program is projected to generate approximately $25 million in revenue and $10 million to $12 million in profit. To determine Lynch’s worth of $800,000, the paper looked at the revenue sources for the University of California (ticket sales, donations, television, corporate sponsorhips) and the NFL’s market forces in which the top running backs receive approximately eight percent of the teams’ salary pool.

“This is an exploitive system,’’ said Ellen Staurowsky, a sports management professor at Ithaca College and founding member of the Drake Group, a college sports watchdog.

However, the Mercury News said that revenue provided by football helps fund scholarships in other sports at the University of California, including volleyball, tennis and water polo. The revenue also helps pay the salaries of coaches and administrators and other incidental expenses. Athletic Director Sandy Barbour told the paper she is opposed to paying players but agrees changes should be made to improve the system. She suggested providing additional support to athletes in need, beyond funding for emergency travel, summer school, computers, and clothes. “We need to continue to enlarge the ways we can help needy students,’’ Barbour said.