The National College Athletic Association has been facing pushback on a number of fronts for its policy on not paying college athletes.
Northwestern football players are attempting to unionize, and in January the NCAA settled a lawsuit over whether it was improperly using the likenesses of its student-athletes in football and basketball video games.
The lawsuit involved games made by Electronic Arts (NASDAQ: EA ) . The settlement awarded $20 million to some Division I men's basketball and Division I Bowl Subdivision football student-athletes who attended certain institutions during the years the games were sold.
The NCAA and its members schools have long argued that scholarships adequately compensate players for their services. Fool contributors Daniel Kline and Jake Mann debated whether NCAA football players should be compensated more directly on Business Take, the show that gives you the Foolish perspective on the most important business stories of the week.
They are selling items with names
Only top-tier football programs make money. In most other cases, maintaining a team costs more than the revenue produced. That is not always the case, however and some of the bigger conferences have signed lucrative television deals for their own networks. The Big Ten distributed $25.7 million per school in football-related revenue in 2013, including $7.6 million from the Big Ten Network, ESPN reported. Players do not share in that money in any way.
It can be argued that network and other TV money comes more from a team's performance and brand over the long haul, rather than due to the actions of a specific player or group of players. Johnny Manziel may have brought big ratings to Texas A&M games, but he is a small part of the picture when the SEC negotiates new rights deals.
One area where players can directly track how much money is being made off their names is jersey sales. Manziel's No. 2 Texas A&M shirt was a top-seller, and the player does not see any of that money. Sharing jersey revenue with players has been a popular proposal, but the numbers are not as big as you might think.
The Texas A&M athletic department received just $59,690 for player-specific jersey sales in 2013, ESPN reported.
Collegiate Licensing Company, which handles licensing for 157 universities, told ESPN that jersey sales account for an average of 1.1% of all licensing revenue for the schools it represents. Most of that money does not come from shirts tied to specific players. The biggest sellers are actually T-shirts, women's apparel, and fleece apparel branded to the school only and not individual athletes.
Still, even if the money is small, accepting a college football scholarship allows a school to use your name however it wants. The NCAA sees no problem in that.
"The collegiate model of sports provides hundreds of thousands of student-athletes with unmatched opportunities for education, growth, mentoring, and future success," said Donald Remy, NCAA chief legal officer.
Leaked: This coming device has every company salivating
The best investors consistently reap gigantic profits by recognizing true potential earlier and more accurately than anyone else. Let me cut right to the chase. There is a product in development that will revolutionize not just how we buy goods, but potentially how we interact with the companies we love on a daily basis. Analysts are already licking their chops at the sales potential. In order to outsmart Wall Street and realize multi-bagger returns, you will need The Motley Fool’s new free report on the dream-team responsible for this game-changing blockbuster. CLICK HERE NOW.