Michigania

March 11th, 2014 at 4:34 PM ^

This is a serious quesiton.....  sorry for the digression.... but with insurance supposedly available, why wouldn't a guy like Stauskas strongly consider staying a third year, rather than jump to the NBA ?  I wondered about this... that another year in college has to be worth something as far as happiness, not to mention the likely incremental improvement in his game.    Perhaps the insurance cost isn't worth it relative to the possible payout in case of an injury... someone knolwedgable on this subject, please enlighten me here.  Thanks in advance.

julesh

March 11th, 2014 at 4:43 PM ^

The thing I've never understood about insurance is when does it pay out? Only if you have a career-ending injury? What if you are injured, but still draftable, just not as high as you were expected to be. Would it pay out then?

CaliUMfan

March 11th, 2014 at 5:10 PM ^

You are correct. The insurance only pays out for a career ending injury, meaning if the player is physically no longer able to play. An injury that diminishes althleticism and earning potential does not neccissarily get the player any insurance money. 

snarling wolverine

March 11th, 2014 at 4:56 PM ^

He may simply want to be an NBA player.  He grew up in Canada, where there is no real college sports culture, so he isn't necessarily living a dream by being a Michigan player right now.  It's also possible that he's tired of school and wants to focus on basketball.  Not everyone wants to be a college athlete.

 

MichiganG

March 11th, 2014 at 5:14 PM ^

There are two major things at play here: (1) Likely draft position in this year vs. future years.  (2) Lost income by staying in college.  Some guys put their own personal priorities over these financial considerations (in some cases, the prospect of serious money sooner rather than later trumps everything; and in others guys highly prioritize the college experience, etc.), but this is the type of math they'll be taught to think of.   One at a time:

(1) Likely draft position.  The NBA has pre-defined salaries (+/- 20%) for rookies based on when they were drafted.  Being drafted #15 overall means about $ 3 million over the first two seasons.  Climbing to #10 would mean $3.9 million.  So if he felt like he could go from #15 to #10 by staying around another year, he could stand to gain $900,000.  The 3rd year option would be another $500,000, but the 4th year option brings them within $200,000.  So over those 4 years the draft position could net him a total of $1.6 million extra.  But the probability of jumping up comes into consideration, offset by...

(2) Lost income.  People typically underestimate the impact of this.  Professional atheletes have very different careers than a typical undergrad, obviously.  They are limited by age.  So while a typical undergrad could stay in college an extra year with minimal impact on lifetime earnings (it is one of let's say 40 years worked, plus they could opt to retire one year later, too), it literally removes an entire year out of a much shorter career.  People then assume this means they lose that first year of income (in this example, $1.5 million).  In reality, they are likely to lose one of their highest years of pay -- after all, he's still going to make $1.5 million, just a year later.  But he is now retiring at the same age with one less year in the NBA.  Here's an example of a guy drafted #15 in 2001 that looks fairly representative of how salaries change in a player's career:

Steven Hunter:

2001-02 Orlando Magic NBA $1,244,880
2002-03 Orlando Magic NBA $1,338,240
2003-04 Orlando Magic NBA $1,431,600
2004-05 Cleveland Cavaliers NBA $1,000,000
2004-05 Phoenix Suns NBA $720,046
2005-06 Philadelphia 76ers NBA $2,800,000
2006-07 Philadelphia 76ers NBA $3,024,000
2007-08 Denver Nuggets NBA $3,248,000
2008-09 Denver Nuggets NBA $3,862,600
2009-10 Memphis Grizzlies NBA $3,696,000

If he stayed in school an extra year instead of leaving as a sophomore and still retired at the same age, he would have lost $3,696,000.  Even when you adjust for inflation, that's a HUGE difference from the potential gain of moving up to #10 in the draft.

I'm going to simplify a little of the other smaller aspects of the math (injury costs, inflation, etc.), but based on these major factors he'd have to be 100% certain that instead of going #15 this year he'd go #7 next year, and that would just be to breakeven.  In order to come out substantially ahead, he'd have to be pretty sure he'd be in the top 3.

MichiganG

March 11th, 2014 at 5:25 PM ^

One other thing - consider the example guys are warned to think about, but usually don't.  That your draft stock may actually go down.  Stauskas has a good example of this with McGary.  Even if McGary gets the benefit of the doubt by GMs and is drafted a lot higher than his current early 2nd round ranking (which comes with no guaranteed money), he'd lose over $1 million from sliding from #15 to #20 this year, plus lose the salary in the last year of his career (which, for his age and size, is likely to come a lot sooner than Stauskas).  If you think he'd be making $5 million a year towards the end of his career, his decision to stay this season would cost about $6 million.

Michigania

March 11th, 2014 at 11:09 PM ^

Thanks fellas. I probably shouldve started a message thread instead of hijacking the OPs.

So deducing from these educated responses, its likely that Stauskas leaves as hes slated at 15, but if Glenn and Mitchs projections arent in at least the mid 20s of the first round, that theyll likely stay as to attempt to improve stock to get into first rd, otherwuse theyll leave too.

Gameboy

March 11th, 2014 at 5:12 PM ^

Because that would be idiotic?

First, insurance is not free. You have to pay for it.

Second, Earlier you go, earlier you will get your first big free agent deal. Age matters in highly athletic sports.

Third, if you get hurt, the insurance is not going to be rewarding as the NBA signing bonus.

Fourth, Nik is already at his maximum draft potential. Staying would only increase the chance that he will be drafted lower.

I can go on...

LesMilesismyhero

March 11th, 2014 at 5:33 PM ^

It's insurance against a carrer ending injury - not a fall in draft stock.

It costs real money (20-30 thousand per year) at a time when the athlete has no income to cover such a cost.

Taken these two together Mitch McGary could have taken one of those polices out prior to this past season and he would have recieved nothing, even though he missed a year due to injury and has seen his draft stock slide.

This is for the program offered by the NCAA.  The details for such policies vary. 

A third thing to consider is to look at who the NBA drafts. 

2013 3 of the top 15 were in college for more than 2 years, 5 were freshmen and 6 were sophomores.

2012 3 of the top 15 were in college for more than 2 years, 6 were freshmen and 6 were sophomores.

2011 5 of the top 15 were in college for more than 2 years, 4 were freshmen and 3 were sophomores.

2010 6 of the top 15 were in college for more than 2 years, 4 were freshmen and 5 were sophomores.

You have to be wary of giving NBA scouts too much film to pick you apart.  This was his first season of not just a shooter, give them another year and they may see something they don't like.

ChiBlueBoy

March 11th, 2014 at 4:43 PM ^

Wow--Beilein really talked up his award. Too bad they didn't show him receiving the trophy, zipping down his pants and pissing on it (while eating a sub).

Seriously, though. I love his attitude. Giving (well deserved) props to Miles and immediately transitioning to talk about the team. Classy guy all the way.

rfinny

March 11th, 2014 at 4:50 PM ^

It's not so much about injury, which insurance can cover (somewhat) as you mention.  The NBA draft is a very selective process with huge guaranteed contracts in the top 15, pretty solid contracts in the later 15, and nothing guaranteed after that, and they get paid substantially less. The almost irresistible draw to jump early comes from stock reports of where kids will get drafted.  Stock varies so much and can drop in an instant with a injury that can "worry" scouts, a few bad games, a perceived flaw that gets exposed, or anything else, so if guys get a top 15 grade they have to seriously consider it.  The NBA is 99% of these kids dream job and is financially a jaw dropper for most people so I don't care how much he loves UM, happiness awaits in the NBA too.  

Lucky Socks

March 11th, 2014 at 5:05 PM ^

You're right, and I agree. But the happiness that awaits in the NBA is different. Much different. I can't count how many interviews I've read where a pro says something along the lines of "it's a job, and that's it." Everyone is playing for themselves and a contact. Team bonding isn't as emphasized. Age gaps are 20-38, so a young guy could feel a little bit lonely on a veteran team.

Meanwhile, college offers the type of happiness that makes us all wish we were back there. Goofing off with your friends, going to Ricks after a big win, campus life. People your age everywhere. The college life appeal can't be discounted because it has to be the biggest reason why GRIII and Mitch came back this year, and the same reason why dozens do every year (Lewan, etc...)

The dream is one thing. College happiness is another. You just can't have your cake and eat it too.

MichiganG

March 11th, 2014 at 6:09 PM ^

This is exactly the response I meant in my long-winded post above about the actual cost of skipping a year of the draft.  Not to pick on you, but Lewan likely cost himself an enormous amount of money.  Probably about 10%, if not more, of his NFL earnings.  In the grand scheme of things, he may be (clearly was) willing to accept that because he assumes he'll earn more money than he knows what to do with, but that's not the same thing as not costing much money.

Lucky Socks

March 11th, 2014 at 7:12 PM ^

I'm not sensitive. No worries. I completely agree with you that plays can end up costing themselves money (in the short term, maybe long run (hi Durrell Summers). All I'm saying is that there is a definite appeal to coming back and playing in college, right or wrong, no matter the cost. Players do it and will continue to factor quality of college life into their decision

bklein09

March 11th, 2014 at 5:44 PM ^

Here's the thing I always have to remind myself of when thinking about the decision to go pro or stay in school: College is great, but there are some crappy parts as well (midterms, papers, dorms, no money, etc.) and we are talking about the idea of a young kid getting PAID to play the sport he loves. They get to drop everything else, focus in playing ball, and get paid handsomely to do so. Sure there is a chance they flame out after a couple years and wish they had stayed in school but that does not cross the mind of most 20 year olds who are told they'll go in the first two rounds of the draft. I loved my time at Michigan, but if someone had offered me a million dollars to leave early and start my career it would have been tough to turn down. That's why I can't really blame any kid for leaving if they're going to get drafted.