The 5.5 Million Dollar Man (TMD on Gardner)

Submitted by JeepinBen on

http://www.michigandaily.com/sports/how-valuable-devin-gardner?page=0,1

Analysis by The Michigan Daily shows that in direct revenues, a player like Gardner can add $5.5 million to the University per year. In free advertising alone, Gardner generating more than $8 million through media exposure over one month.

 

The current NCAA system, which prohibits monetary compensation to student athletes, makes it impossible to precisely evaluate a player’s market value. But as the debate over player compensation continues, the question is as important as ever.


We've had the "pay the players" topic of conversation here quite a few times, but this article from the Michigan Daily puts some dollar amounts on just how much some of those top tier student athletes really make for the university, and it's staggering. Michigan spends about $275K on each football player every year - but that includes the almost $9M spent on coaches' salaries. I'm all for a stipend, or an Olympic model. Still the best line I read (elsewhere, Bacon?) was how the NCAA spends millions employing people just to make sure that the students don't get a dime.

LSAClassOf2000

December 9th, 2013 at 11:00 AM ^

This is a very interesting article and thanks for sharing it. 

I don't know if the figures ever made it to the board here (they might have), but I wonder if a similar article was ever done for Denard Robinson, because I have to think that the figure would dwarf Gardner's value.

It is an interesting phenomenon when one player has this sort of impact on revenue through their media exposure. The comparison of the marginal revenue for an average NFL player versus Gardner was pretty illuminating, I think. 

It does say something that we might have guessed - the exposure peaked during Notre Dame week between early Heisman talk, the "98" jersey and the general buzz about UTLII. Cool to see it graphed though. 

jmblue

December 9th, 2013 at 11:14 AM ^

Do they compare Gardner's value with that of other U-M quarterbacks?  It could tell us how much the mere fact of being a U-M starting quarterback is worth.

 

Bluegriz

December 9th, 2013 at 11:20 AM ^

If at any time Devin Gardner does not like his arrangement with the university, he can end it.  My guess is that he won't do that, because he perceives value in being a student and an athlete.  He probably assumes an investment of his time now will pay off later!  Same reason anyone pursues higher education, or in his case perhaps college football, right?  Without the UM providing a platform, he does not become a million dollar man.

Erik_in_Dayton

December 9th, 2013 at 11:34 AM ^

He also pretty much has to go to college to showcase his talents for the NFL.  I can think of one guy who I've seen in 25 years of watching football who made it to the NFL from somewhere other than college...There is no question that college gives DG something.  The question is whether it is a fair amount. 

NOLA Wolverine

December 9th, 2013 at 2:14 PM ^

I'm not fully versed on the topic so I won't go much further then to throw this out: 

http://consumerist.com/2013/07/17/more-than-286k-people-ask-mcdonalds-t…;

This story is what prompted my analogy. The key point being that "wages must be provided in 'lawful money of the United States or check.'" (In Pennsylvania and some other states, at least. Apparently that's not explicitly stated in labor laws in every state). 

And, this circles back to what was brought up below. Once we start talking about paying players I would assume they would be considered employees or at least partially be treated as employees. I suppose it would probably be finessed in such a way that they were considered more like unpaid interns than employees in regards to labor laws, but I don't really want to dive down that deeply past stating that as a counter point. 

NOLA Wolverine

December 9th, 2013 at 2:17 PM ^

I thought it was assumed that they are "employees" going forward when we start talking about paying players. Although it would probably be more nuanced, as I talk about above in my other reply. In the end it would depend on what labor laws would actually protect them if we went this route. 

Blue Mike

December 9th, 2013 at 2:31 PM ^

Except that they are paying him.  He just has the money direct-deposited into his checking account, and then the bills for his rent/mortgage, groceries, student loans, gym membership and other expenses are auto-debited from that account.  They just happen to equal out each month.

If we're going to pay players for their abilities, then take away their scholarships and make them pay for their living expenses.  After all, the pros do it, right?

JeanClaudeVanD…

December 9th, 2013 at 11:22 AM ^

No one ever mentions the other players that lose money for Michigan, the guys who will never see the field. I wonder what the value received by these players who get free education plus a degree from Michigan equates to over the course of a professional career?

Wolverine Devotee

December 9th, 2013 at 11:25 AM ^

Changing the jersey number of the star player or QB of the team is a brilliant way to make money. Just like the alternate jerseys, receiver gloves and bowl gear.

Because you have sheep/saps like me who will buy it up. I didn't even like the Road Legacy jersey(z)s. Still bought one just to have one.  

moxiechicago

December 9th, 2013 at 11:38 AM ^

What this article and similar views fail to recognize is how much value Michigan and the conference and the NCAA add to these players.  Suppose for a second that college football doesn't exist and instead the NFL has a minor league/farm system similar to baseball or many other sports.  Now put Devin Gardner on the Ann Arbor Aviators (made up minor league team).  Is he still worth $5.5M in revenue?  Put Johnny Manziel on the College Station Cats.  What is he worth then?  How much is he selling autographs for?  

I'm not saying that there aren't problems with the system, but it's ridiculous to assert that DG is worth $5.5M without also admitting how much value a great place like Michigan (tradition, stadium, fanbase, university, etc...) brings to the table as well.  

ChasingRabbits

December 9th, 2013 at 11:47 AM ^

Everyone talks about how much the player adds to the University's wallet, and they offset that value with the much smaller value of the scholarship, but how much does the team add to the player's wallet on top of the scholarship?  Weighttraining was mentioned, job trainig? how about PR for the player, whats that worth?  how much will Clowney make based on ESPN showing his hit on Smith over and over? How much will Barr from UCLA make based on all the pub he has gotten?  What exactly is that worth?

 

 

readyourguard

December 9th, 2013 at 12:14 PM ^

At $50,000/year x 5 years + future earnings (potentially millions if he makes it in the NFL), I think Devin will be alright. Look, High school football players who want to continue playing football have to do it at the college level (for at least 3 years). A lucky 20-30 choose to do it at Michigan annually. It's fortunate for both the player (great school, best stadium, fantastic college experience) and school (reap national appeal by attractiving good athletes). Everyone wins because that's the dynamic of playing college football).

Look, there are kids paying $50k for out of state tuition who will become teachers and make $40,000 a year. If anyone has the right to feel jipped, it's them.

kb

December 9th, 2013 at 12:27 PM ^

players should and will not get paid. It's called capitalism. My employer makes much more money on me (more than those estimates you quoted for football players) than they pay and provide me. That doesn't mean I can all of a sudden ask to bump my salary to a million dollars. End of story.

JeepinBen

December 9th, 2013 at 12:45 PM ^

It's a bit more complicated than that too. NFL, NBA, and NHL players don't get market rates. The players (Unions) collectively bargained with the owners for revenue sharing that includes salary caps. These caps effectively help most players, as all but the elite would lose out if the elite made more.

The NCAA meanwhile has a totally 1 sided "revenue sharing agreement" with "salary" capped at a scholarship per player (85 per football team). Oh, and NCAA athletes can't make money another way either - someone is paid to make sure they don't get money for appearing in commercials or anything else pro athletes can do.

Also, pro players make a certain percentage of overall revenues - if the NFL makes more money, the cap goes up. The NCAA money pool, especially in football, has totally balooned recently, thus the money has gone to coaches, other AD employees, and facilities. The players have not gotten any of this new money windfall.

kb

December 9th, 2013 at 12:50 PM ^

simple as that, and the market rate for pro athletes has balooned out of control (side note). College athletes get compensated plenty - tuition, meal tickets, some already get a stipend, development by coaches to get them to the pros (for the players that are good enough to go to the NFL), a degree which has the ability to serve as a springboard to more money than they likely would make without one (for those who do not go pro), etc.

JeepinBen

December 9th, 2013 at 1:00 PM ^

so your argument is that athletes already get paid and they get paid enough.

What would you have them do with all the extra revenue compared to say, 1998? Coaches, AD, etc. salaries have increased a ton with all the new money that's poured into sports. They players' slice of the pie should be fixed though? because they already get compensated enough?

I don't think that coaches and ADs are the ones bringing in the new TV dollars.

kb

December 9th, 2013 at 1:14 PM ^

with the way the salaries for coaches, ADs, etc has increased exponentially over the last two decades.

The big programs are able to fork over the big dollars to coaches, and we unfortunately have no way of changing that. As I mentioned a couple posts below, there are a limited number of football programs that even have excess money from the revenue they generate from football, so it is really only a subset of D1 colleges that even make money from sports.

Blue Mike

December 9th, 2013 at 2:38 PM ^

When a network signs a 10 year, $2 billion contract with a league, do you think they do so because Michigan has Devin Gardner, Jake Ryan, and Taylor Lewan on its team, OSU has Braxton Miller and Carlos Hyde?  No, ESPN gladly throws out that money because they can market Michigan and Ohio State; most of the players "bringing in the new TV dollars" aren't even in high school yet.

pescadero

December 9th, 2013 at 2:18 PM ^

"Why do NFL, NBA, NHL, and MLB players all get paid at a market rate?"

 

They don't.

 

Minimum salaries guarantee that a number at the bottom of the pool are overpaid.

 

Maximum salaries, luxury taxes, salary caps, etc. guarantee that a number at the top of the pool are underpaid.

 

...and things like the draft and limitations on movement between teams also guarantee that a number at the top of the pool are underpaid.

 

The NFL/NBA/NHL/MLB are pretty darn far from a "free market".

 

 

Erik_in_Dayton

December 9th, 2013 at 4:20 PM ^

It is a market within the confines of what you describe - free agent players are on a market in which teams bid for their services and the players can go to the highest bidder if they so choose.  But you are aware of this, yes? You seem to be willfully ignoring the greater point, which is that players in all of those leagues make salaries that are based on their value as individuals and that have at least some correlation with the profits that they make as individuals for their teams and as a group for their leagues. Historically, the players in the NFL, NBA, and MLB (and I assume the NHL, though I'm less aware of its history) all at some point demanded a bigger slice of the revenue generated by their leagues and/or teams. NCAA players have had no such moment.  The  dollar value of what they get has gone up, but that hasn't happened at anywhere near the rate of the increase in revenue generated by major college football.  Instead, that money goes to coaches, ADs, and other sports instead of the players on whose backs the money is made...If you were an elite college player, you would trade being a college player for being a pro (NBA, NFL, MLB, NHL) player if your primary motivation was tangible benefits, right? 

JeepinBen

December 9th, 2013 at 4:45 PM ^

Was huge. There were 6 teams, and 2 were owned by the same family. There weren't multi-year contracts until the 1960s, and many players had to work in the offseason pre-expansion. Collusion was rampant and players were afraid to speak up because they would get traded away to terrible teams (Ted Lindsay to the Blackhawks!). Lindsay was actually one of the heads in starting the NHLPA (didn't want to be called a Union, ya commies!) and just like the NBA it all started gaining momentum at an All Star Game.

(From memory above, it's detailed in Glenn Hall's biography "The man they called Mr. Goalie" which is where I know the Lindsay stories from. Wikipedia below)

First organizing efforts (1957–1959)[edit]

The first NHLPA was formed in 1957 by hockey players Ted Lindsay of the Detroit Red Wings and Doug Harvey of the Montreal Canadiens after the league had refused to release pension plan financial information. The owners broke the union by trading players involved with the organization or sending them to the minor leagues. After an out-of-court settlement over several players' issues, the players disbanded the organization. Lindsay's struggle and the NHL's union busting efforts are dramatized in the movie, Net Worth.

pescadero

December 9th, 2013 at 5:22 PM ^

"If you were an elite college player, you would trade being a college player for being a pro (NBA, NFL, MLB, NHL) player if your primary motivation was tangible benefits, right? "

Any elite college player who wishes to trade being a college player for being a pro can do so.

 

NBA D League and the Euro League for basketball.

Minor leagues for the hockey/baseball.

CFL and semi-Pro leagues for football.

 

They CHOOSE to go to college, because the payout (in current + future benefits) is greater than becoming a professional.

 

Erik_in_Dayton

December 9th, 2013 at 6:08 PM ^

You can't enter the NBA until you're one year out of high school.  You can't enter the NFL until you're three years out of high school.  Jadeveon Clowney probably would have been the number one pick in the NFL draft last year, but he wasn't allowed in. I believe the CFL only requires you to be 18, but should you have to leave the country for your career?...A person can chose to do something but also be exploited. People used to chose to be sharecroppers because it was better than starving to death, but that doesn't mean they weren't exploited.

Also, do you want your response to the college player who says, "Hey, I make you guys a lot of money - Can't I have a $5,000 stipend?" to be "If you want more, you know where the door is"?  

MGoAndy

December 9th, 2013 at 12:45 PM ^

Article doesn't at all touch on how much ANY Michigan QB would be "worth." There's nothing to indicate that the dollar values they're throwing out are because of Devin and not because of Michigan QB. 

And of course Devin is going to be mentioned on TV–he's the quarterback for MICHIGAN, FOR GOD'S SAKE. 

Also have a hard time believing the analysts who translate mentions on Sportscenter into dollar values have any idea what they're talking about.

 

moxiechicago

December 9th, 2013 at 1:19 PM ^

Paying players would definitely make the asshole fans worse.  Remember all the nasty tweets Gardner received from idiot fans?  Suppose he was getting a salary of $1M and throwing picks all over the MAC and the American conference...

BJNavarre

December 9th, 2013 at 1:57 PM ^

The problem I have with this analysis is that if you put Gardner on a team like Iowa State, his value drops to probably 5 digits. A lot of his value is due to playing for Michigan. Another QB of similar talents - say Kain Colter - would generate a similar amount of value to Michigan, even though he's not generating a ton for NU (due to NU's weaker brand).

That's not to say that their argument has no merit, a player like Manziel is delivering tons of value to A&M, but the analysis does not come close to accurately calculating Gardner's market value as a college football player.

I also strongly dispute Duderstadt's assertion that the AD does not deliver value back to the University. The AD is the University's biggest marketing tool. It is easily worth 8 figures to the U.

awolfinwater

December 9th, 2013 at 2:20 PM ^

I agree with previous posters on needing to further understand the split between Devin Gardner vs. Michigan QB in generating articles and mentions.

 

What I haven't seen mentioned yet is the calculation of $5.5mm based on marketing cost. From my read, it seems like they are saying he is worth $5.5mm because that is how much money it would take to generate the same amount of "buzz" if you hired a marketing firm. Why does this translate?

Can you show me how Devin Gardner affects ticket sales or donations? That is where the value is, not in pseudo-marketing costs.