NEW YORK (TheStreet) -- In the cover article for The Atlantic Monthly from October 2011, "The Shame of College Sports," it is detailed how Sonny Vaccaro, who has worked for Nike (NKE - Get Report) and Adidas (ADS), used the allure of big bucks to force university heads to allow for sponsor advertising. As Vaccaro put it directly to many in a meeting, "We want to put our materials on the bodies of your athletes, and the best way to do that is to buy your school. Or buy your coach." It has worked well for Nike, Under Armour (UA - Get Report), and the others.
Now it is time for Nike, Under Armour, Adidas, and others to do the right thing and pay the college athletes, rather than just buying the coach or the school.
It is difficult to think of a more inequitable system involving billions in revenue with millions going to coaches than having players who do not have the money to go to the movies or take a bus home to visit their parents, according to Don Curtis, a trustee for the University of North Carolina. In the words of Dale Brown, who used to coach basketball at Louisiana State University, where Shaquille O'Neal and Pistol "Pete" Maravich played, "Look at the money we make off predominantly poor black kids. We're the whoremasters."
Events are moving in the right direction for college athletes being paid and Nike, Reebok, Under Armour should get out in front. A multi-million settlement was just announced for video game proceeds. The Ed O'Bannon case, an anti-trust lawsuit against the NCAA by a former UCLA basketball player for use of images, is moving forward. In that matter, University of San Francisco economist Daniel Rascher testified that football and basketball players could make hundreds of thousands of dollars, if not more, over their college career if paid based on a percentage of revenues like those in the pros (NFL players get 55%). Nike, Under Armour and Adidas should escrow a large percentage of the millions that go to schools until players are allowed to receive payments, preferably in the form of contributions for an annuity, retirement plan or trustee account for future expenses like buying a home. Coaches such as Steve Spurrier at the University of South Carolina have advocated paying their players. As the chart below shows, there is plenty of money to go around at many schools:
|School||Sponsor||Amount||Football Coach Total Pay||Football Staff Pay Total|
|University of Michigan||Adidas||$6 million, plus $6.5 million signing bonus||$4.154 million||$3.072 million|
|University of Texas||Nike||$5.76 million||$5.45 million||$4.11 million|
|Florida State||Nike||$4.2 million||$2.75 million||$2.874 million|
|Auburn||Under Armour||$4.2 million||$2.44 million||$3.495 million|
|University of South Carolina||Under Armour||$3.1 million||$3.32 million||$2.744 million|
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Kraft, Kellogg, Hershey and Mondelez Whet Appetite for Food Stocks Jonathan Yates does not have a position in any of the stocks mentioned in this article. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.