Colin Kaepernick continues to surprise and impress, posting a 4.53 in the 40-yard dash today at the NFL combine. His was the second-fastest time among all quarterbacks and six-tenths of a second faster than noted “icon and entertainer” Cam Newton, a fact which won’t hurt his draft stock come April 28th.
This got me to thinking about the monetary valuations the NFL marketplace will soon assign to Kaepernick and the other rookies. It occurs to me that whoever takes him, and whatever number he signs for, that number will invariably disappoint Pack fans–it could never stack-up against their own impossibly high estimates of Kaepernick’s value.
All of which begs the question: just what was Kaepernick’s dollar value to the program? How much was he worth to the Pack in terms of boosted school visibility, ticket sales, bowl game revenues and an improved future for UNR recruiting? Well, over four years, as best as I can tell, it was $1,072,000. Or $288,000 on a per-year basis. Here’s how I got to that number…
There are a few ways to try and calculate the dollar value, or else the direct economic impact, of a college athlete over the course of their career. You can do it by using win/loss regressions as a measure of individual statistical contributions to team performance (basically win shares) or you can calculate expected future value using average draft position distributions and weighted salaries taken across a sample set of data.
A third method, while less technically precise and less interesting (to me at least) than the other two, was described by Robert Brown, an economist at Cal State San Marcos, who has spent years estimating what college athletes would be worth if the NCAA labor market were subject to competitive market forces (and not a cartelized sweatshop/exploitative monopsony, to put it nicely). Brown’s model can be summarized mathematically as follows:
revii = α + βTWL it + γDit + δ Conf it + ηYeart + λT t + ε it
In lieu of explaining ^that^ for the next several paragraphs, I’ll boil it down to this: in order to estimate the value of a college athlete, you first have to determine his worth in a competitive market, which–for stupid econ theory reasons–means determining his marginal revenue product (MRP), which, for our purposes, can just as well be called salary, as it represents what amateur athletes could be getting paid (given w(age rate)=MRP; and/or MRP=MRC). From there, value (technically economic “rent”) can be derived by subtracting effective wages and benefits (scholarships) from MRP as determined in the model shown above.
Now, finally, we get to Kaepernick. Since technically we’re talking about a replacement quarterback’s market valuation, you have to set Kaep’s worth equal to that of an industry equivalent in a real, grown-up market. That means taking the value–12%–of NFL QB’s salary represented as a percentage of a given NFL team’s payroll. Then multiply that 12% share by the 40% of Pack football revenue that would be used to construct a competitive payroll under market conditions. So take 12% of 40% of $6 million, in this case (NFL players actually get 60% of franchise revenue per the newly-expired CBA; but since NCAA athletes aren’t paid, the dynamic in college football is flipped, with coaches taking home at least 60% of revenue and leaving 40% for our imagined payroll).
This calculation gives a $288,000 in yearly salary (value), or a very conservative estimate (since it doesn’t include Kaep’s merchandise sales, amongst other variables) of the yearly economic impact of a top-tier quarterback at UNR.
Multiply this by four years and subtract from the total by the average full athletic scholarship (capped at $120,000 over 4 years by the NCAA but figured here as the public university average of $80,000) over the same time period, such that $1,152,000-$80,000=$1,072,000.
A little over a million in revenues generated by one player? That’s really not a bad return on UNR’s (approximately) $80,000 investment…