The Nike sneaker ad claimed, “It’s Gotta be the Shoes.”
It should have said, “It’s Gotta be the Money.”
The bribery and fraud charges brought by the Justice Department and FBI last week against four college basketball coaches has shed a glaring spotlight on the multi-billion-dollar business that is college athletics.
The numbers are staggering.
Ohio State has a 15-year, $252 million deal with Nike, which is just ahead of Texas’s $250 million deal with Nike.
That’s more than $500 million for two schools. If you think that could buy a lot of textbooks, consider this:
Nike’s revenues in 2016 were $32.6 billion. The GDP for the nation of Knicks star Kristaps Porzingis’ Latvia was $27.6 billion.
Adidas’s revenue last year was $22.65 billion, slightly more than Starbucks ($21.31 billion). Under Armour’s revenue was $4.83 billion in 2016, more than double from $2.33 billion in 2013.
“There is a major arms race going on,” George Belch, a marketing professor at San Diego State, recently told the L.A. Times after Under Armour signed UCLA to a record 15-year, $280 million merchandise deal.
But the players don’t share in the college and sneaker company profits.
Take the No. 14 jersey worn by USC quarterback Sam Darnold, who could be the No. 1 pick in next year’s NFL Draft. It sells for $135 on Nike’s website. As an amateur athlete, Darnold doesn’t get a penny of that revenue and his name is not on the back of the jersey.
Why shouldn’t Darnold, or any elite recruit, not take a payoff?
It’s only once they turn pro that they can cash in like Odell Beckham Jr., who stands to collect $48 million from Nike over eight years.
The giant sneaker companies – Nike, Adidas and Under Armour – share seats at a power table with the networks that televise college sports.
The Big Ten’s latest TV deal with ESPN, Fox Sports and CBS, is worth $2.6 billion over six years, according to published reports. Member schools, such as Michigan, will receive an estimated $43 million in 2017-18.
Maryland and Rutgers didn’t join the Big Ten because it’s a better conference. It joined because the Big Ten prints money. The conference invited those two universities because there are a lot of TVs, tablets and smartphones in New York and Washington D.C.
Just as reporters follow the money when politicians are living a lavish lifestyle, the Justice Department and FBI has followed the billions in college sports.
Louisville is accused of paying a basketball recruit $100,000 to sign. Big money? Ha.
Adidas has a $160 million merchandise deal with the Cardinals, which also got $26.2 million from the Atlantic Coast Conference in 2014-15.
What’s $100,000 among unofficial collaborators?
The cycle is vicious and unrelenting.
The better recruits a school signs, the more it can receive in merchandising and television rights. That increases the pressure on coaches, schools and conferences to get the best players — at any cost.