College Football Is Lopsided: Why This New Incentive Might Make it More Fair

The top teams in college sports are pulling away from the rest of their competition, but a new tax could help fix it.

The University of Alabama has appeared in the college football playoffs seven out of the last eight years.

That’s why many fans refer to the national championship as the “Alabama Invitational”.

Adding to that, only 13 programs have made the CFB Playoff in its eight years of existence.

That’s why seeing Cincinnati in the playoffs last year was so refreshing.

I think we can all admit that it gets old seeing the same teams duke it out every year.

But what can be done to level the playing field and give the other 116 teams that haven’t made the playoffs a better chance?

To answer this, we need to look at professional baseball.

Baseball’s Revenue Structure

The New York Yankees have had multiple dynasties during their storied franchise.

As a ‘big market’ team, they’ve had unlimited dollars to throw at their entire eco-system, often landing the biggest free agents available.

This did not sit well with owners and fans in the smaller markets.

During the 2011 lockout, the MLB leveraged the moment to change both the revenue-sharing and incentive structures across large and small market teams.

This changed the landscape and gave every team a better chance at making the playoffs.

The model seems to have worked pretty well, as the San Francisco Giants are the only team to have won more than 1 World Series since then.

On top of that, the Pittsburgh Pirates made the playoffs for the first-time in 2013 after a 20 year drought of no post-season appearances.

So how can this be applied to college sports, specifically football?

Let me explain.

Revenue Sharing

Despite the capitalist drive to generate more revenues by expanding from 4 to 12 teams in the CFB playoffs, the under-belly of college football is cracked and needs to be restructured first.

FBS football could use a revenue sharing plan that allows for larger programs to transfer revenues to smaller market programs under a specified-formula.

The spending of one team can drive the cost that affects all teams—that's what we're seeing in college sports right now.

While the reality of revenue sharing in college football has been limited to the Power 5 and Notre Dame, you’re going to lose fans and media dollars if there isn’t an equal chance for more teams to be competitive year in and year out.

Just look at how much revenue SEC schools bring in year over year.

Even within the Power 5 community, there are uneven competitive outcomes, as the SEC and the Big Ten are breaking away from the other conferences.

But there’s another option.

Luxury Taxes

Dynasties are not good for professional sports and the same can be said for college sports.

Balance is essential for the health of the sport, which then translates to fan engagement and media revenues.

College football should incentivize a spending and reward system that places a “luxury tax” on items like salaries, while not penalizing spending (or capping) areas that support athlete health, safety and wellness.

What could these recommendations look like? Examples might be:

• If your athletic department raises salaries of any personnel associated with the football program in order to gain a perceived competitive advantage, the new salary and benefit dollars (above a ceiling) would be taxed at an agreed-upon percentage and assigned to other programs in the athletics department (or with other institutions)

• More unpenalized (i.e. tax-free) could be spent on programs that specifically support college athletes

• Longer-term coverage of health care benefits for athletes who are injured

• Supporting broad-based athletic programs that provide more opportunities for athletes, not fewer

• Investing in more opportunities for internships and co-ops for athletes, post-career

Where Does NIL Tie In To This?

A lot of this gets muddy around name, image, and likeness (NIL).

The main point of NIL is so that players can get paid legally - but without counting them as employees. Think of it like Steph Curry only receiving payments from endorsements and not from the Golden State Warriors.

It doesn’t make any sense when you step back and think about it.

The QB at the University of Alabama is only allowed to get paid through endorsements, but not from the school which he brings in millions of dollars of revenue for.

Universities are doing everything in their power to ensure players are getting paid enough through endorsements - so they don’t have to pay the athletes from their own budgets.

It’s honestly quite ridiculous. Amateur sports don’t exist anymore, let’s just accept that fact and give the players what they’re worth.

There’s a place for both NIL and salaries, especially in college football.

Don’t believe me?

Go read this article I wrote a few weeks ago: Colleges Make Millions From Athletics: (But The Players Make $0)

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Thanks for reading!

Athletes have long by used as disposable assets, so it’s nice to see them finally getting paid what they deserve (especially at the collegiate level).

My aim in every article is a mixture of entertainment and education. I hope I’m achieving that day in and day out.

Have a great Thursday. Keep grinding!

-AP

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Sources:

https://www.forbes.com/sites/karenweaver/2022/01/31/its-time-for-revenue-sharing-and-a-luxury-tax-in-college-football/

https://247sports.com/LongFormArticle/college-football-biggest-recruiting-budgets-Georgia-Bulldogs-Alabama-Crimson-Tide-134630146/#134630146_1

https://en.wikipedia.org/wiki/Major_League_Baseball_luxury_tax