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Newton's Law

Nov. 22, 2010
Nov. 22, 2010

Table of Contents
Nov. 22, 2010

LEADING OFF
Editor-in-Chief's Letter
Inside: THE WEEK IN SPORTS
COLLEGE BASKETBALL PREVIEW 2010 -- 11
COLLEGE BASKETBALL PREVIEW
Point After
Departments

Newton's Law

So what would a star college QB be worth in a free-market economy?

With the Cam Newton saga dominating college football news last week—Did the Auburn quarterback's father barter his son's services among prospective schools for $180,000 or $200,000? Would Auburn sit Newton or play him? What was the status of the NCAA's investigation?—another story got far less attention, one that, indirectly, gives Newton's travails context. On Nov. 5, Texas announced the creation of the Longhorns Sports Network, to be distributed by ESPN for $12 million a year. Both stories underscore what might be viewed as a huge imbalance in the labor market of college football. With athletic departments functioning as mini-industrial-complexes, bringing in vast revenue, it is interesting to calculate just how much a star player such as Newton is worth.

This is an article from the Nov. 22, 2010 issue

It's an inexact science, but let's consider the market for stars in the NFL. According to Forbes figures, the Colts generate roughly $250 million in annual gross revenue; they pay their star quarterback, Peyton Manning, roughly $14 million. Accounting for licensing deals, television and conference monies, ticket sales, sponsorships and a fat BCS payment, Auburn football will likely generate in the neighborhood of $60 million in revenue this year. On the "Manning market" (QB gets 5.6% of the annual revenue), Newton would command roughly $3.5 million, making that $180,000 or $200,000 a real bargain.

NCAA policymakers might be shocked by that idea, but the economics faculty at member schools surely will be less surprised to see signs of a free-market economy.

Moskowitz, a University of Chicago economist, and SI senior writer Wertheim are authors of the forthcoming Scorecasting: The Hidden Influences Behind How Sports Are Played and Games Are Won.

SIGN OF THE APOCALYPSE

A North Carolina high school football referee ejected a coach for calling a trick two-point conversion play—in which the kicker lined up wide and did six handsprings as he went in motion—before the play was even executed.

PHOTOSIMON BRUTY (NEWTON)NUMBERS GAME Applying NFL economics to college football, Auburn's Newton would be a bargain at $200,000.