College basketball is going to be dominating winter sports until the NCAA’s March Madness championships finally end in April. Meanwhile, between games there’s another contest taking place: debates about whether colleges should pay athletes in two big-time sports—football and men’s basketball. This replaces 1980s television beer commercials pitting “tastes great” versus “less filling” factions among sports fans.
So, to start the “play for pay” games, let’s assume that salaries replace scholarships in big-time men’s college sports. What happens, for example, to the college player if he were paid $100,000 per year?
A full athletic scholarship (a “grant-in-aid”) at an NCAA Division I university is about $65,000 if you enroll at a college with high tuition. This includes such private colleges as Stanford, Duke, Northwestern, University of Southern California, Syracuse, and Vanderbilt. The scholarship is $45,000 for tuition and $20,000 for room, board and books. At state universities, the scholarship would be lower if you were an “in state” student—because tuition would be about $13,000. But if Michigan coach Jim Harbaugh recruits nationwide and wants a high school player from California or Texas, the University of Michigan out-of-state tuition bumps up to about the same as that charged by the private colleges.
That’s the old model. In the new era, a coach could offer a recruit a salary instead of a scholarship. Does a $100,000 salary give the student-athlete a better deal than the $65,000 scholarship?
The $100,000 salary is impressive. A future Heisman Trophy winner might command more, but $100,000 is not bad for an 18-year-old high school recruit. But since it’s a salary, not a scholarship, it is subject to federal and state income taxes. Tuition and college expenses would not be deductible because the income level surpasses the IRS eligibility limit.
So, a student-athlete paid a salary would owe $23,800 in federal income tax and $6,700 in state taxes, a total of $30,500. In cities that levy an employee payroll tax, the salaried student’s taxes go up about $2,400 per year. Income taxes then are $32,900. And, as an employee, the player would have to pay at least $2,000 in other taxes, such as Social Security, for a total of $34,900. This leaves the college player with $65,100. Since college bills come to $65,000, the player has $100 left.
By comparison, how bad was the scholarship model? According to the federal tax code, the $45,000 tuition award is deductible, but room and board are not. The student-athlete will be able to deduct book expenses and qualify for a tax credit under the American Opportunity Tax Credit (AOTC), reducing his tax. The bottom line is that the student-athlete gets a $200 refund in federal taxes and pays $820 in state taxes, for a total tax bill of $620. There’s no local payroll tax because he was not an employee. This means $64,380 of the $65,000 scholarship can go toward paying academic expenses of $65,000.
How does the salary compare to the scholarship for student purchasing power? The $100,000 salary gives the college sports “employee” an advantage of $720 per year, the difference between his net salary of $65,100 versus the scholarship player’s net of $64,380. That’s not great news for the salaried player. It’s bad news for the athletics department which paid $100,000 in salary rather than $65,000 in scholarship, driving up expenses $35,000.
What’s clear is that paying salaries for college players is a taxing situation. Each case will vary by state. The case above used a moderate tax state, Kentucky. Massachusetts (a.k.a. “Taxachusetts”) will be more painful. In following all the “pay for play” contests, the skilled players will be dueling accountants and agents.
There’s crucial a human dimension to the “numbers game.” Star high school athletes are talented. Coaches and sports journalists reinforce this perception. But players and their families often overestimate a player’s market worth. They fail to recognize how many equally talented players are competing for a salary. Many All-State players may be surprised that college coaches are not willing to pay them $100,000 or even $50,000.
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High school and college players understandably use the National Football League and the National Basketball Association salaries as the gold standard. Multimillion-dollar contracts make professional sports part of the American Dream. But since the NFL and NBA are the pinnacle, it’s good to add the full range of professional sports leagues when a college player plans his financial future. Former college stars on professional indoor football squads make about $225 per game—with a $25 bonus if the team wins. Outside the NBA, players in the professional developmental league—one step from making a NBA squad—make about $43,000 per year. The college scholarship model may not be so bad for student-athletes after all.
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John Thelin, a professor at the University of Kentucky, is author of A History of American Higher Education, published by Johns Hopkins University Press. In 2006 he was selected for the “Ivy League at 50” roster of outstanding scholar-athlete alumni. He most recently wrote for MONEY on Why Students Are the Biggest Losers in Today’s College Bowl Games.
Eighty-four percent of the high school players drafted from 1995 to 2005 had N.B.A. careers lasting at least eight seasons. The median career length was 10 seasons, more than double the average for an N.B.A. player. Of the 38 high school players drafted since 1995, when the rookie wage scale was introduced, 24 played in the N.B.A. this season, about 63 percent.
In contrast, 59 of the 82 college freshmen who turned pro since 1996 were still on active rosters, about 72 percent. Only a handful of players failed to pan out on the pro level, and one was seriously hurt before his rookie season.
History shows that teenagers have had great success in the league. Witness the career trajectories of Kobe Bryant, Dwight Howard, LeBron James, Tony Parker, Kevin Garnett, Tracy McGrady, Chris Bosh, Carmelo Anthony, Kevin Durant and Derrick Rose. Only Anthony, Bosh, Durant and Rose were one-and-done. The N.B.A.’s last seven Most Valuable Player awards went to players who entered the league as teenagers.
In most of this country’s other pro sports, prodigies are welcomed and their achievements celebrated. Hockey had Wayne Gretzky and Sidney Crosby; tennis had Pete Sampras, Andre Agassi and the Williams sisters. Two years ago, Jordan Spieth dropped out of the University of Texas after his sophomore year to become a professional golfer. At 19, he won the John Deere Classic, becoming the first teenager to win a PGA Tour event in 82 years. At this year’s Masters, Spieth shared the lead after the third round and finished as the youngest runner-up in the tournament’s history. How come no one has said Spieth’s decision to leave the Longhorns was bad for golf?
Major League Baseball allows high school stars to enter its draft, which is how, at the not-so-tender age of 19, Bryce Harper and Mike Trout became impact players. Among the Hall of Famers who made their debuts as teenagers were Bob Feller, Mickey Mantle, Johnny Bench, Brooks Robinson, Harmon Killebrew, Al Kaline, Ken Griffey Jr., Robin Yount and a pitcher named Babe Ruth.
Mark Emmert, the N.C.A.A. president, has voiced no objection to the 500 ballplayers who annually sign pro contracts out of high school. A vast majority of them will never play a major league game, even those drafted in the first round. Most toil in the minors, where they earn minor league salaries. The same goes for hockey players. The big difference is that M.L.B. and the N.H.L. let high school athletes choose between college and the pros.
Gifted high school basketball players should not be denied access to the job market in their sport. Turning pro is, after all, a career choice for only a select few. The longer a player is kept out of the draft, the greater the risk of a career-threatening injury. Consider the torn knee ligament that the top prospect Nerlens Noel sustained last year, or the recent stress fracture in Joel Embiid’s foot.
Instead of abetting the N.C.A.A., Silver should pressure the organization to make college athletics a more attractive option for underclassmen as they make the transition to the N.B.A. The N.C.A.A. and the N.B.A. should follow a model similar to the one in baseball, in which prospects are eligible to turn pro after high school or at the end of their third college season. (Basketball players should be eligible after two seasons.)
The N.C.A.A should also adapt to the N.B.A.’s draft timeline, which would allow players to work out for pro teams and, if they choose, withdraw their names 10 days before the draft. And the N.B.A. should develop a true minor league, not just a holding pen for mostly has-beens and never-weres. Instead of moving in lock step with the N.C.A.A., the N.B.A. should side with opportunity.
Top-tier European players can now exhaust the draft process and make an informed decision. College players should be afforded the same opportunity. If a college player ultimately makes an unwise decision, he should be allowed to return to college and participate again as an amateur.
In the end, despite all the earnest harrumphing of Emmert and Silver, age restrictions can be legislated only through collective bargaining. As the N.B.A. pushes for greater restrictions in the 2017 agreement, the players union should demand a rollback of draft eligibility rules to what they were a decade ago.
The typical N.B.A. career is quite short and very fragile. I hope the players come to appreciate why injury and salary concerns make none-and-done worth fighting for. They must speak with one voice, arguing for fair play and, in the case of one-and done, exposing unfair practices.Continue reading the main story