Jacob Singer is a student at the University of Michigan majoring in Political Science. He is a Michigan Football and Basketball Writer for Maize and Brew
Within the last week, college football fans have read reports of student-athletes "renegotiating deals" to stay in college, hitting the transfer portal in hopes of securing a larger NIL deal. Head coaches have also blatantly come out publicly, either in support of giving more money to the right athlete or making overarching claims their school is not the right fit if the athlete is only in it for the money.
If you are coming here from my first article about how the Wolverines needed to adhere to the House vs NCAA Settlement by recruiting at a cap and having to cut their roster size from 137 players to 105 by next fall, welcome back! If you are reading this for the first time, here is a quick summary...
On Oct. 7, 2024, the proposed House v. NCAA settlement received preliminary approval, clearing the way for schools to begin paying players directly through revenue sharing as early as 2025.
Michigan is in a fortunate position. Its stadium holds 110,000+ fans during every home game, it has the second-largest alumni network in the country, it has a self-supporting athletic department that pays the university back every penny it borrows in scholarships, loans for buildings and resources for its athletic programs, and it has untapped revenue streams considering that Michigan Stadium does not promote a single in-stadium advertisement.
In 2023, the Wolverines' total revenue increased by $18.9 million from the previous year, and more than half of that increase came from an increase in ticket sales. Just the football ticket sales alone were calculated to be at $56,986,870.
As of right now, Michigan pays back every in-state and out-of-state scholarship it gives to the more than 900 student-athletes across 29 sports. That is an estimated value of $30 million. In addition, Wolverines' athletic director, Warde Manuel, sent out a survey to Michigan fans and alumni asking them about their thoughts on the potential of in-stadium advertising. Instead of promoting other Division 1 programs, riling up the crowd with "Let's Go Blue" chants and singing along with DJ Skee, Michigan could see an increase in $50 million in revenue from sponsors by playing advertisements during media timeouts. The money is endless.
So what is the point?
Michigan hired Sean Magee last offseason from the Chicago Bears' front office to become the General Manager of Michigan football. Magee works directly with Manuel, head coach Sherrone Moore, and NIL coordinators Danielle Davidson and Terese Whitehead, to run the football team from roster management, to orchestrating NIL deals, to recruiting, and more.
In college football, the pay-for-play space is so new that there are very few metrics to use to compare current college players to the rest of the field. Magee is trying to change that as the only former NFL front office rep in a college football GM role.
"In the NFL, player valuation is fairly straightforward," Magee told Sam Webb. "The NFL likes to have this, kind of the myth-making of the calculus that goes involved in some of these decisions. But I tell our players all the time and our guys and recruits, in the NFL, after you get through a rookie contract, when you have your first opportunity to negotiate a contract, player valuation is straightforward. It's your production and comps, right?
"So if you are a wide receiver and you're looking at an individual that's coming off their rookie contract who is going for their second contract, you're looking at past production and the potential for future production. Catches, touchdowns, all the variables that you want to look that way. You're looking at age and injury history, and then you're looking at comps. So looking at that entire picture of the athlete, then you're looking at how the market ranks or compensates that athlete with those similar attributes and stats and production."
The entire college football world blew up when Michigan gave quarterback Bryce Underwood an undisclosed NIL evaluation worth eight figures (reportedly). However, Magee had endless revenue sources and an NFL framework to justify the decision to pursue Underwood the way they did.
"Because of the experience and exposure, we're able to leverage off of the NFL," Magee said. "We're able to leverage off the percent allocation for salary cap by position. So if a player is achieved, or we see a player at a certain level, we can look at the comparable data of an NFL player, of what the player was, similar productions, similar attributes, similar traits, what they've done at that level, and what that allocation to a salary cap is.
"While we don't have a hard, defined salary cap that's mandated across the board, like any business, we have a budget. And we establish what that constraint is. And if we start to apply some of those ideas of how we do percent allocation, this thing starts to come together, and that's what we've already implemented, right? Specifically in this recruiting cycle, in the class that we put together and signed (in December), this was all under the vision of what is the appropriate percent allocation at this position with this level of talent. That's what we're trying to execute."
With no salary cap in college football, the Wolverines' front office can come up with a value for each position and divvy out revenue-sharing money based on that percentage. That acts as the base salary. On top of that, the NIL coordinators and marketing agents that represent the athlete can orchestrate deals with local and national businesses, which is frosting on top of the cake.
In the NFL, Dallas Cowboys quarterback Dak Prescott makes up about a quarter of the entire team's salary cap by making $60 million per year with the cap being $255.4 million. The NFL has premium positions (the quarterback, the wide receiver, the left tackle, the edge rusher) and non-premium positions (anything that doesn't have to do with passing), and that defines the market for each of those positions.
This is all to say that Underwood's value has been carefully thought out, compared to the NFL and compared to the rest of the team. The NFL is a copycat league, and Michigan is just trying to get in on the model that works.