The Wolverines football team is having an incredible year, but their successes are not bound to their on field achievements. In July of this year the M Den, a UofM officially licensed retailer, announced that they would be the first school in the NCAA to pay players a royalty for the sale of Jerseys that host their names. The M Den declined to share the details of the deal's they have made with individual players, but stated that they projected the royalty per sale would be $10 or more.
There is limited data available regarding the number of jerseys actually sold each year per team, so I took it upon myself to conduct an exercise to determine the potential market size of royalties generated for players of 35 of the premier college football universities.
I based potential sales off of a percentage of undergrad students that may be interested and able to purchase a players jersey. In this case I estimated that 50% of total students would purchase a jersey in any given year, and that the average price of each jersey would be $90. $10 of each transaction would be considered a royalty that would be provided to players who are generating the sales. I hypothesized that half of the starters (11 of 22) would share an equal amount of the total royalties. Based on these projections, I determined that a star player at Texas A&M could expect to earn $78,310.91 over their 3 year career in royalties, while a player at Notre Dame could expect $11,905.91 over the same time period.
This mean's that a player could stand to gain up to $67,000 based on the size of their school's student body.
Why does this matter.....
In 2019, the correlation between a teams final rank and the number of 4/5 star recruits was un-surprisingly high (.951). Furthermore, the correlation between 4/5 star recruits per team and that teams associated student body size was extremely low (.246). This data indicates that 4/5 star recruits have ignored the school's population when deciding where to commit. However, if my predictions regarding the market size per team is correct, then recruits will have to begin factoring in potential revenue when evaluating their options.
Subsequently, I believe that this will begin a trend of the best players picking the schools that are the most profitable for them, and comparatively smaller schools who have been historically good (i.e., Notre Dame, Stanford, TCU, Baylor, Miami, etc.) risk losing their top talent. As a Michigan State football fan, I am excited at the prospect of this reality, but as a Seton Hall basketball fan, I fear the demise of my pirates is imminent.
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