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Nike May Face a Bidding War against Adidas, Under Armour for the NCAA's Richest Program


Stashed in: Brands!, Nike!, YOU OWE ME (Lawsuits), P.E. Class, C.R.E.A.M., Under Armour

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Adidas and Under Armour have been stretching the market for marquee college programs and for professional players. Adidas recently wooed Houston Rockets guard James Harden from Nike for a whopping $200 million over 13 years. And Under Armour drove up the bidding for National Basketball Association MVP Kevin Durant, who ultimately stayed with Nike for $300 million over 10 years.

Texas is already the richest athletic program in the country. It earned $161.3 million during the 2013-14 school year, according to its most recent financial report, and unlike most college athletics programs, it covers its own expenses. Most of that money comes from the football team, which turned a $74.1 million profit in the 2013-14 school year, according to the U.S. Education Department. That makes it the most profitable team in college football by almost $10 million. Michigan is No. 2, with $64.6 million in profit.

NCAA football teams make huge profits while the players are unpaid. 

Check this, the most recent, high profile lawsuit filed against the NCAA, recently upheld.  

http://www.si.com/college-basketball/2015/09/30/ed-obannon-ncaa-lawsuit-appeals-court-ruling

https://en.wikipedia.org/wiki/O%27Bannon_v._NCAA

This lawsuit brought to the forefront this exact conversation: the debate on whether STUDENT-athletes should be paid, when TECHNICALLY, the exchange is paid tuition/free ride to the school, ie. a collegiate education.  For some schools, that's basically $15-30k a year.

The idea is that, students are building equity, talent, craft to prepare them for the professional industry - no matter what that industry is.  The educational/athletic/creative opportunity at the school IS the contractual exchange for their "service."  

The problems arise when people/students use athletic programs (extra curricular in nature) as their MAIN endeavor, as direct springboards to professional sports.  But this of course is inherently driven by the revenue-generating NCAA sports system - TV broadcast/advertising/entertainment, apparel, etc.

It's actually all a really twisted, mutated form of what it's supposed to be... and all because of money.

Yeah, I find it hard to believe that the tuition and experience are worth the pay they're forgoing. 

But you're right that it's an interesting debate. 

If we presume that TV and apparel contracts represent the lion's share of revenue for an NCAA program,

I find it hard to believe that,  after the layers of overhead of the school, ie.  its infrastructural investments and permanent staff, that distributing annual payouts to individual student athletes would come close to the value of the cost of their tuition/living. 

This is just guessing with a few numbers. The cost of running a top tier program is probably quite significant. 

Not to mention the complexity/ethics of deciding which sports AND which of its athletes gets the benefit,  if they did payout. If it's the Football program that brings in 80% of revenue, does that all stay in the football program?  That would necessarily harbor inequity. 

Moreover, it renders an extracurricular program into a corporate structure of compartmentalized programs, each with their own financial responsibility (not that it isn't already). 

All I'm saying is that perhaps it's best that the school, as a single entity, receive, manage and distribute based on the legacy interest of the school.  Ie. Funding a new gym or auditorium or athletic center benefits all students. 

It just seems like they make a lot of profit on the backs of the students. 

and this is new? 

consider MIT, Stanford, CalTech, and what they make from the IP developed in their research labs.

and it's considered all fair when a company/venture starts up from the research.  Sports is not so different then.

You're right but now would be a good time to stop doing that. Because we know better. 

Right...  Ethics always win... 

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