by Courtney Altemus
“‘The paradox of education is precisely this,’ James Baldwin wrote, ‘that as one begins to become conscious, one begins to examine the society in which he is being educated.’”
–as recalled by Nigel Hayes in his article “Don’t Just Shut Up and Play,” Players Tribune, 2017*
Good news, this is not another article on the merits of either side of the NCAA student-athlete compensation debate. Rather, it is about why college athletic departments, high school recruits and their families/mentors should care about what schools are doing to help student-athletes live financially healthy lives.
The plethora of studies, reports and articles on the topic of paying student-athletes has brought to light the staggering tv contract revenues (est. $1billion/year to NCAA for march madness and upwards of $20-$30million/year for large football programs). To continue feeding those increasing revenues, the stakes for the schools to recruit the most talented student-athletes increase every day. Schools that bring solutions to their student-athletes for financial challenges vs. schools that simply define the financial challenges will differentiate themselves in the intensively competitive recruiting process.
Basic Financial Literacy and Budgeting
Student-athletes are bombarded with examples of what not to do with their money. Talking about the symptoms of financially unhealthy lives may provide enough fear for some student-athletes to at least try and avoid pitfalls. However, until student-athletes start getting help with the cause of the symptoms, those symptoms will continue to appear.
In his USA Today Sports** article about the subject of student-athlete compensation, Domonique Foxworth said, “(athletic directors) and the rest of the adults getting paid money generated by the players should stop paying this lip-service and start taking their obligation to the players seriously. They should take the time needed to understand the real challenges faced by the university’s unpaid labor, make the effort to engage experts who can help create effective solutions and don’t assume they always know best.”
One of the “challenges” Domonique was referring to is student-athletes’ budgeting and spending choices. He goes onto say, “Most adults can point to something they purchased during their college years as ‘dumb’ or ‘impulsive’ or ‘regretful.’ For example, at least once a week, one of my college teammates would get a new tattoo. I couldn’t embrace the idea of having something permanently inked onto me so I graduated with no tattoos. However, rims were a different story. I put some chrome feet on the whip, an Isuzu Rodeo. Like the previous sentence, my rims were cool in ’05 and I would be embarrassed by them today. It was an ego purchase. Coming off of Maryland’s first ACC Championship season since 1985, I felt I deserved a little reward.”
Now that cost-of-attendance stipends are being distributed, the challenges are greater. Schools are struggling to adequately address financial literacy for student-athletes. Domonique reflected on comments from some athletic directors on a panel in 2015 about cost-of-attendance stipends: “North Carolina State athletic director Debbie Yow voiced a concern. ‘You try to teach student-athletes about financial literacy,’ she said of the school’s student-athletes, ‘but you know you failed when you see them on their new hoverboard.’ (Alabama then-AD Bill Battle added), ‘tattoos and rims.’”
Schools should acknowledge to recruits and their families that it is a challenge to make responsible decisions when student-athletes receive stipends and grant money. Poor decisions can lead to distractions from their efforts in the classroom and in their sport. Schools should make a commitment to teach them basic financial literacy and budgeting in an effective manner with executable tools, customized to their individual needs.
Student-athletes differentiating between in-school amenities and real-life costs
In the Wall Street Journal*** article “The Money Bowl,” Jason Gay makes his argument to pay student athletes by highlighting the multiple millions of dollars that large college sports programs are spending on luxurious training facilities and amenities. Mr. Gay says, “This luxe-ification is done, of course, in the name of competitiveness: specifically attracting recruits and satisfying players so that a college can keep up in the multibillion-dollar universe of football and men’s basketball. Austerity has long since left the building. If you aren’t offering this stuff to kids, the theory goes, your opponent will.”
Further in Nigel Hayes essay, he says, “People say there’s not enough money to pay players. Yet there’s enough for all the lavish amenities so they can get players to commit to their schools and make even more money.”
If it’s commonplace for the teenage high school athlete with an undeveloped pre-frontal cortex to experience these shiny-object facilities, then schools will continue to build them. The schools seem satisfied that adequate ROI is being generated and they’re happy to have more resources to provide comfort and healthy lifestyles for their student-athletes. It seems clear that schools who don’t have sleek and state-of-the-art new facilities are at a recruiting disadvantage at the outset. What is unclear is what the differentiators (if any) are among the fancy athletic buildings and at what point the returns on incremental increases in flat screens or comfortable furniture start diminishing when factoring into a high school athlete’s decision on where they will play in college.
The schools who have invested in their facilities should leverage that investment in a more practical way that provides long-term benefits for student-athletes far beyond their time in school. They should acknowledge to recruits and their families that there is an enormous difference between enjoying amenities at school vs. the financial resources required to continue their luxurious living conditions post-college. Athletic programs, with or without fancy facilities can improve recruiting by making a commitment to help their student-athletes develop the tools to manage their financial resources after college, no matter what profession they choose to pursue.
Student-athletes going pro in their sport: How do they choose financial advisors?
According to the NCAA.org website, between .9% (women’s basketball) and 9.1% (men’s baseball) of student-athletes go pro in their respective sports after college. For those fortunate enough to sign a professional contract (1.1% of men’s basketball and 1.5% of men’s football players just to quantify some other sports), if they aren’t taught how to understand their financial needs and how to find the best financial advisors for their own situation, they’re at tremendous risk for creating new financial distractions and potential disasters for themselves.
Another area that schools can differentiate themselves to recruits is to outline their financial education and advocacy programs for student-athletes planning to turn pro in their sport after college. Many of the schools are proud of their programs to help student-athletes choose agents but they don’t have comparable programs to help student-athletes choose financial advisors.
It makes sense that schools who send some student-athletes to their professional sports leagues would want to highlight to incoming recruits how well prepared those professional athletes are to manage their finances. Not only is it an important differentiator when attracting recruits, it seems logical that a professional athlete who had a good experience in school, feels well-prepared to be financially responsible after college and has a financially successful athletic career might be more likely to give back to her/his alma mater.
Adding value to student-athletes post-college, no matter what profession
Student-athletes have very limited time outside of their academic and athletic obligations. Financial distress causes distractions from these pursuits and results in decreased productivity. They need experts who guide them in a proactive and positive manner about what they can do to prevent the financial horror stories they hear so much about. Schools need to be proactive about providing access to the experts for student-athletes. If a perception develops that certain schools turn out a higher number of financially unhealthy student-athletes, that perception will become reality. Those schools will then be fighting against their own reputations in the recruiting process.
Nigel Hayes includes this advice in his essay, “My challenge to the class of 2017 is this: Never accept it when someone says, ‘Just shut up and play.’ Or whatever the equivalent is in your field. Don’t accept it when they say, ‘Stay in your lane.’ Let’s use all possible lanes. Let’s create new lanes. Each of us is more than just the job we do for a few hours a day. Whether we play basketball or not.”
Incoming high school recruits know how tight the competition for talent is among schools. More student-athletes care about added-value beyond the fancy locker rooms.
--Courtney Altemus, CEO and Founder of TeamAltemus, Investor Advocacy and Financial Literacy experts.