Paying student athletes

Illinois wide receiver Ryan Lankford makes a catch against Washington defensive back Gregory Ducre at Soldier Field last year. (Anthony Souffle/Chicago Tribune / September 1, 2012)

Like a five-star high school recruit in his senior year, college athletics is at a crossroads. Pressure from current players, former players and lawsuits means a system of paying college students to play sports is finally getting serious attention.

Those pushing to pay athletes argue that schools — and their coaches and administrators — take in billions while the students themselves are left with nothing. The NCAA and school officials have steadfastly rejected that argument, saying most schools can't afford to pay students and that doing so could tarnish the principle that players are students first.

But the contentious philosophical debate also leads to some basic math questions: Could schools afford to pay their athletes, and how much?

An examination by the Tribune of athletic department budgets over the past five years for Big Ten Conference schools shows that they generate tens of millions of dollars in operating surpluses.

The review found that many of the schools could compensate players beyond just the value of a scholarship if they dipped into their year-end athletic department surplus: They could afford some form of payment to members of the men's basketball and football teams, which are revenue-generating sports, and could even cover certain extra costs for all scholarship athletes.

Financial reports submitted to the NCAA were available for 10 of the 12 conference teams over five years and showed a wide variation among schools in cash flow, including losses in some years, but also large surpluses — the highest being $23.3 million for the University of Michigan athletic department in 2012. (Northwestern University, a private school, declined to share data, and public records laws don't require Penn State to disclose such information.)

A closer look at the 2012-13 school year, the most recent period for which all 10 schools' data were available, showed all but Purdue reported year-end surpluses.

Eight of the schools could afford to provide football and men's basketball players a few thousand extra to pay collegiate incidental expenses — costs that are not included in the free tuition and housing currently given scholarship athletes. Those eight institutions also would have enough money in their surpluses if the full cost of attendance were expanded to cover all full-ride equivalent scholarships in both women's and men's sports; the schools typically award at least 250, which each can be shared among multiple athletes.

The financial reports also show that seven of those schools could pay their men's basketball and football players annual amounts of $7,500 — a figure that mirrors what some minor league baseball players earn as they try to reach the majors. That would be in addition to tuition and housing.

These seven schools also could afford to pay those players $15,800 a year or the equivalent of a minimum wage based on year-round employment. That does not include the University of Illinois at Urbana-Champaign.

Should colleges turn to a pay system for its top athletes, it's unclear how such a system would be crafted.

But covering incidental expenses such as cellphone bills, extra food and transportation has been a starting point for some in this debate because it is intended to fill in the gaps for students' real-world college experience. NCAA President Mark Emmert even made an unsuccessful effort in 2011 to provide a $2,000 stipend to athletes.

"They could afford to pay stipends, maybe even to all student-athletes on scholarship," said Matt Mitten of the National Sports Law Institute at Marquette University Law School, who has studied the economics of college athletics. "If you took at the Big Ten, they're generating very substantial revenue. The real question is how many athletes would be getting the stipend."

The role of student-athletes in college — and how they should be treated — is being debated in a variety of ways, with huge implications for the future of college sports followed by millions of rabid fans.

A federal labor board recently found that Northwestern football players should be treated as employees because they spend so much time playing their sport. And the NCAA faces a litany of lawsuits, on issues ranging from player concussions to whether student-athletes should be paid for their efforts.

One act in this drama has been playing out in a federal courtroom in Oakland, Calif., site of a federal antitrust case brought by former UCLA basketball star Ed O'Bannon and a class of recent football players that accuses the NCAA and schools of price-fixing and profiting off players' likenesses in video games. Whatever the outcome, it is expected to be appealed and eventually wind up before the U.S. Supreme Court.

Meanwhile, some presidents from the 65 largest Division I schools with the richest budgets are pushing for NCAA authorization to implement rules separate from smaller schools, including increased stipends, long-term medical care and possibly payments to students. Without such autonomy, some presidents in the five major conferences — the ACC, Big Ten, Big 12, Pac-12 and SEC — have threatened to form a whole new division.

There isn't much debate that large sums of money are at stake — Ohio State's athletic department received about $20 million in television revenue alone in 2012-13 — but there are differing views about just how much. Even publicly available budgets can mask the true financial health of these programs because they provide general, sweeping views. It's even unclear how year-end surpluses are reinvested.

Still, the Big Ten budgets give a glimpse into the finances of these athletic departments, and the robust revenues of some schools match what many would expect. Schools that are sports powerhouses are generating the most net earnings — the surplus cash they have after all their expenses are covered.

For instance, leading the pack in 2012-13 was Ohio State with $15 million in net earnings, followed by Michigan at $11 million.