Monday, April 4, 2011

Why College Athletes Should Stay In School [Mondays with Gus]

Every year, dozens of student athletes have to make the decision as to whether or not they should go pro or stay in school. Without getting into a debate on the value of a college education (and it's incredibly valuable on many levels), I can still put together an argument that it makes financial sense for them to stay in school. The assumption here is that the student athlete who decides to go pro will be a great player that lasts significantly longer than the average player, and that he will be able to demand a large salary.

In order to understand why this makes sense, you have to look at the two possible scenarios involved. In the first, you have a young player who spends a year or two trying to learn how the NBA works. He will have statistics that aren't impressive as they can be, mostly because the focus is, or at least should be, on learning rather than improving numbers. This time spent learning a new system and developing skills will be used against the player when the second contract is negotiated. This can easily cost a player millions of dollars, especially when you realize most contracts are fully guaranteed. In the second scenario, you have a player who comes in more polished, has better statistics through his first few years in the league and can command a higher salary due to a more impressive resume within the time period specified (usually around four years).

With scenario one, the player will have an extra year in the league while in scenario two the player will have a stronger argument for a big contract towards the end of his career. The amount of the second contract (let's say five years) should normally be a lot more than the salary earned through one year in the league, mostly because it's a higher pay for multiple years versus a higher salary in just one year.

While there are many players (LeBron, Kobe, KG) that have made a fortune through skipping school, my point here is that student athletes in general would benefit from developing their talents instead of jumping at the first chance to make money. If many of these kids are jumping ship because they think they will automatically make more money - because they will be able to work an extra year - they haven't analyzed everything properly. I hope these kids make the right choice and stay in school.

-Gus Rafeedie



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