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🧵 Thread: The real economics of college sports — what the headlines get wrong.
Everything you've been told about the "financial crisis" in college athletics is either incomplete or misleading.
Here's the data. 👇
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Jason Abromaitis
466 posts
Jason Abromaitis
@JAbro21
Founder. Formerly elite minesweeper player.
Denver Katılım Haziran 2009
2.3K Takip Edilen528 Takipçiler
Jason Abromaitis retweetledi
Funny what happens when we don’t rely on the NCAA’s D1 SAAC members, which represents all athletes, and instead hear from college athletes who might benefit from employment status and bargaining power 🤔
Ben Portnoy@bportnoy15
Interesting nugget that came out of Rep. Trahan's presser was a question on whether athletes want to be employees. The NCAA, conferences, etc. have said they don't. WBB players Brooke Daniels (Michigan) and Oluchi Okananwa (Maryland) pushed back on that assessment:
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Jason Abromaitis retweetledi
Here is the resort where Big Ten folks have gathered this week to discuss "unsustainable" spending.
Pete Thamel@PeteThamel
Column from the Big Ten meetings, where the industry’s “unsustainable” rhetoric meets a glistening trophy case. Will we have $80-$90 million football rosters in two years? What will curb the spending? espn.com/college-footba…
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@AaronGogley How do you think that that makes it clear? Repeating yourself doesn’t make you right.
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@JAbro21 Let me make it clear.
They’re not labor and it’s not a free market.
That there is a market for recruits is true at every level of athletics.
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Might have something to do with college athletics being neither labor nor a market.
Marc Edelman@MarcEdelman
I have spoken to Maria Cantwell’s team on many occasions, and find myself a little bit more concerned each time. Somehow they seem to have lost part of the message about free labor markets. I don’t know who else has their ear, but someone clearly does.
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@AaronGogley Legal markets are often not free either - but college sports should operate by the law and like all markets, within regulations that limit externalities. And the legal tests actually wouldn’t make employees out of all athletes necessarily. That’s where we should be able to agree
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@AaronGogley The NCAA (often illegally) doesn’t allow a free market. Charlie Baker claims kids don’t want to be employees citing no evidence. The article considers downsides of employment (and i concede there are tradeoffs) but it doesn’t disprove the legal tests for labor
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@JAbro21 The “kids” don’t want it either. And it actually explains that they’re not labor and why being employees would harm them.
But it’s most definitely not a free market even if it were labor.
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@AaronGogley That article doesn’t disprove anything about the existence of a market, does not understand the tests for what makes an employee, and ignores the incentives that are making schools fight so hard against employment status (hint: it’s not for the good of the kids).
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@AaronGogley @MattBrownEP All this leads to a few likely conclusions 1) the universities ascribe some $ value/cost (at least directionally) to each roster spot different than the accounting figure and 2) they may not have a great model to come up with their estimates.
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@JAbro21 @MattBrownEP Although if they get outside aid the university keeps that money.
And not all athletes are on full rides so that further complicates any analysis.
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NEW EXTRA POINTS:
The "official" reported revenue from college athletic departments usually includes stuff like student fees and institutional subsidy.
What do they look like if you take all that stuff out? I did the math:
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@AaronGogley @MattBrownEP It’s a reasonable assumption overall. But then the assumption that the replacement student would pay full tuition needs to be adjusted down for average grants and aid.
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@JAbro21 @MattBrownEP It’s hard to really know without seeing behind the curtain. We just make an assumption that they allow in X number of on campus students and Y number of athletes means X-Y=actual capacity.
If that’s not true then opportunity costs may be nonexistent.
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@AaronGogley @MattBrownEP That’s what I’m referring to as the real costs for the dorms, meal plans, etc that are the 6-12k. It is hard but not impossible to estimate both accounting & opportunity cost. I might still challenge the assumption that a university (like a dishwasher) is ever totally “full” 😂
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@JAbro21 - Great site and appreciate the research you put in there. I do think the accounting is especially difficult because athletic departments are trying to operate as independent entities when they're really part of the university.
So when you make a statement like "A "$30,000 expense" may represent $6,000–$12,000 in real cost. At a typical FBS program with 400+ scholarship athletes, this can overstate real expenses by $7–18 million per year."
That's tough because there is (1) a real dollar cost to the dorms, etc. and (2) it doesn't and can't capture the opportunity cost.
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@GTRecruitBuzz @MattBrownEP What’s my bias? You’re a hilarious troll.
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@JAbro21 @MattBrownEP Wow what a pretentious and hypocritical response for someone whose entire premise is predicated on a highly biased approach to the economics of college sport. Like what?
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Jason Abromaitis retweetledi
One of the defining hallmarks of our modern age is that people in charge of good things are willing to make them incrementally worse for a chance to make more money, knowing most people are powerless to stop it.
Nicole Auerbach@NicoleAuerbach
The NCAA officially announces that the fields of the Division I men's and women's basketball championships will increase from 68 teams to 76 starting in 2027.
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@GTRecruitBuzz @MattBrownEP I’m well aware of the concept of opportunity cost but economic and accounting profit are different things and both are important to understand. I try to understand all sides of issues. You should try it some time.
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@JAbro21 @MattBrownEP The claim that a scholarship for a student athlete is not the equivalent of what a different student would pay does not make sense. If the student athlete wasn't there, schools would accept an additional other student that would pay that full amount.
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@MattBrownEP It would be really interesting to consider the actual revenue displaced and/or generated unique to each school’s tuition and capacity for more students. It’s not an easy thing to calculate at all.
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I'd love to take a run at rebalancing some of the scholarship spending, but I try to err on the side of being very conservative with my analysis, and I think that would be outside the scope of my abilities and resources. Would be a great project to pair with a research department
Jason Abromaitis@JAbro21
@MattBrownEP I looked at this and the numbers I have may be off here or there compared to yours in improvecollegesports.com. The other side is inflating expenses with things like scholarship accounting. Have you looked into that at all?
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Jason Abromaitis retweetledi
The most interesting thing, to ME, about the Big 12 private capital deal isn't so much the dollar amount or handicapping which schools take the extra dough
it is: what is the league gonna do with the money?
extrapointsmb.com/p/so-what-s-th…
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I think that the Hawks don’t understand the concept of tanking for draft picks
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@PeteThamel They are missing an opportunity to move to a cleaner 96 team tournament where we'd get 4 days of absolute chaos with 16 games per day instead of the 2 we get now. Going bigger would give more teams a chance to land better talent too with more teams earning $.
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Sources: The NCAA has initiated the final steps to expand the men’s and women’s NCAA basketball tournaments to 76 teams. The expansion is on track to be formalized in the upcoming weeks, with mid-May as the target. The 76-team tournaments begin next year. espn.com/mens-college-b…
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4/ Read "The Collegiate League: When Saturday overthrew Sunday" — and think about how things could play out.
improvecollegesports.com/story-2040
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3/ I walk through the hypothetical legal dominoes that could lead to college sports as a completely free market system, the death of geographic conferences, and what happens to the NCAA if/when the top spending 80 schools secede.
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🧵 New thought experiment:
"The Collegiate League: When Saturday overthrew Sunday" improvecollegesports.com/story-2040
A hypothetical dispatch from November 2040 if college sports barrel down the current path to reach one extreme scenario (unlikely but possible). 👇
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