According to this ESPN article, 6 current NCAA football players (including two Wildcats) have joined former UCLA player Ed O’Bannon in suing the NCAA for royalties related to the use of their likenesses in video games. The games, though prohibited from using the names of collegiate players, do create players with similar features and talents as players on current teams.
The players are upset that they are simply receiving a free education … and housing … and food … and don’t get to share in any of the $545,000 paid annually to the NCAA for the use of their logo and other rights.
Unfortunately, the players discount the fact that their scholarships and living expenses are provided to them tax free. According to the website, CollegeData.com, the average cost of a moderate public university education is about $23,000. Private universities average $20,000 more.
Imputing for social security, medicare, and income tax (including the State of Arizona), the football player would have to earn $28,000 to have enough to cover their college costs. A private university player’s earning would be $56,500 and place them in the 25% tax bracket. Keeping in mind that a college football player practices from approximately August through the end of December, (with some respect to Spring practices), the player’s approximately 6 months of work adds up to a $56,000 and $113,000 annualized salary.
To compare, the league minimum salary for Arena League players is around $30,000. Minor league baseball players (AAA) earn about $33,000. D-league basketball players are paid between $12,000 and $24,000 per year. Minor league hockey players come out well at around $41,000 annually.
Aaron’s Take: No, not all college athletes receive full scholarships, which can leave a gap between cost and need. But those that do are receiving some pretty great tax-free compensation.