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TEACHING NOTE
CASE 29
NCAA Football: Is It Worth It?
Overview
This case addresses the ethics of organized football, in light of the problems of concussions and head-related
impact injuries. For every high school athlete, the dream of playing at the collegiate level slowly turns into
a reality for a chosen few like Jacoby Jackson, a highly touted, senior 4-star football recruit from Celina,
Texas, finishing high school in the spring of this school year. Throughout Jacoby’s life, he wanted to play college
football at the Division I university in his home state of Texas. Being a highly skilled 6 foot 6 inch, 240 pound
tight end, Jacoby was receiving scholarship offers from many major college football programs throughout the
country. Jacoby was also an outstanding student inside the classroom, which led to academic opportunities at Ivy
League schools. A few weeks ago, Jacoby watched the Concussion1 film with his parents and began to question if
playing football in college would be beneficial in the long run, given all the health risks associated with playing
the sport. Many college recruiters were informing Jacoby that helmets and the school’s concussion protocol were
highly effective in preventing concussions.
With National Signing Day for high school football recruits approaching in a few weeks, Jacoby was still
undecided about his football and/or academic future. Over 8 million high school athletes decreased to the 460,000
student-athletes that competed at the NCAA level as of 2015. The primary goal of these high school athletes was
to be awarded a financial scholarship to assist in paying the rising costs of furthering his or her education. NCAA
Divisions I and II schools provided over $2.7 billion in athletic scholarships annually. Depending on the school
and the sport, athletes could receive either a full award, a partial award, or no reward. These scholarships could
be used to complete a bachelor’s degree, as well as a master’s degree. One of the most competitive scholarships
awarded was the full-ride collegiate football scholarship. These full-ride football scholarships typically covered
tuition and fees, room, board, books, and most recently, cost of attendance.
The possibility of receiving a full-ride scholarship to a university was a motivating force for any aspiring football
player. Besides furthering one’s education, this was the most common route for football standouts to reach
an even bigger goal of playing in the National Football League. The NFL’s rules stated that a player must be
removed from high school for three years to be eligible for the NFL draft. This does not force a player to compete
at the college level, but collegiate football was where virtually all NFL careers begin. With lucrative television
exposure and the prestige that comes with being a collegiate football player, these athletes were able to showcase
their skills at the highest level possible before the NFL. With over 850 college football programs and more than
80,000 current college football players, college football scholarships were becoming a highly sought after item
during the recruiting process.
This case presents public university football scholarship data versus the costs of attending an Ivy League
university, and estimated salaries for a student who took a public university football scholarship versus an Ivy
League university education. Also, data is provided on the probabilities of playing in the NFL, average playing
time, salaries and retirement. Students can work through “real world” data to mathematically determine whether
a student/football recruit should take a football scholarship or pay to go to a prestigious university. Also, students
can calculate the expected value of playing in the NFL under a variety of assumptions.
Case 29 Teaching Note NCAA Football: Is It Worth It?
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Suggestions for Using this Case
The NCAA Football: Is it Worth It? case is best suited or use in your business ethics and social responsibility
module, but can also be used earlier in the course to illustrate opportunity analysis or cost-benefit concepts. The
majority of students will be familiar with college athletics and you may have athletes in your class: students
tend to have very divergent opinions on the issues presented, which will make for a lively class discussion. The
highly interesting case will please students, and they will easily grasp the nature of the problems facing potential
football recruits. This case is very suitable for use with Chapter 9, “Ethics, Corporate Social Responsibility,
Environmental Sustainability, and Strategy.”
Videos for Use with the NCAA Football case. There are two videos that you can show in class (or have
students view on their own):
nA 5:38-minute 2015 video concerning “Is It Time to Pay College Athletes?,” that can be accessed at
https://www.youtube.com/watch?v=Q8lKwKbvKTY.
nA 12:21-minute 2014 video entitled “Should College Athletes Be Paid?” that can be accessed at
https://www.youtube.com/watch?v=a8Q-L5yr0Lw.
Links to the two videos are also posted in the instructor resources section of the Connect Library.
In our experience, it is quite difficult to have an insightful and constructive class discussion of an assigned case
unless students have conscientiously have made use of pertinent core concepts and analytical tools in preparing
substantive answers to a set of well-conceived study questions before they come to class. In our classes, we
expect students to bring their notes to the study questions to use/refer to in responding to the questions that
we pose. Moreover, students often find that a set of study questions is useful in helping them prepare oral
team presentations and written case assignments—in addition to whatever directive question(s) you supply for
these assignments. Hence, we urge that you provide students with assignment questions—either those we have
provided or a set of your own questions—for all those aspects of a case that you believe are worthy of student
analysis or that you plan to cover during your class discussion.
To facilitate your use of assignment questions and making them available to students, we have posted a file
of the Assignment Questions contained in the instructor resources section of the Connect Library for the 21st
Edition
Utilizing the Guide to Case Analysis. If this is your first assigned case, you may find it beneficial to have
class members read the Guide to Case Analysis that follows Case 31 and is also posted in the instructor resources
section of the Connect Library. The content of this Guide is particularly helpful to students if your course is their
first experience with cases and they are unsure about the mechanics of how to prepare a case for class discussion,
oral presentation, or written analysis.
Suggested Assignment Questions for an Oral Team Presentation or Written Case Analysis. We
highly recommend use of the “NCAA Football: Is it Worth It” case for written assignments and oral team
presentations. Four good assignment questions are:
1. Prepare an argument for Jacoby taking the football scholarship. Under what conditions/assumptions would
the football scholarship route be the optimal solution?
2. Develop an argument to convene Jacoby that the football scholarship route is not the optimal decision.
Carefully set out the assumptions that you use to prepare your case.
3. As the publicity director at a major university, prepare a convincing presentation to an Alumni Association
meeting to explain why the University should cease sponsoring football as it is presently played.
4. You are a financial advisor to Jacoby, who graduated from a state university where he played football as a
Case 29 Teaching Note NCAA Football: Is It Worth It?
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Assignment Questions
1. Do NFL franchises operate as socially responsible businesses? Assess the five components of an NFL
franchise’s Corporate Social Responsibility Strategy.
2. Prepare an economic analysis of the decision to accept a college football scholarship versus attending a
prestigious academic college. Use the costs and salary information presented in the case to compute the Net
Present Value of earnings of both alternatives. State all assumptions that you make in your analysis.
3. If Jacoby Jackson decides to accept a football scholarship, and is successful in the NFL draft, what can he
expect to earn over his athletic lifespan? State any assumptions that you make in your calculations.
4. Should universities continue to support football, considering the large body of evidence that indicates
that many players will get concussions and of those, some will suffer life-time debilitation from Chronic
Traumatic Encephalopaty (CTE)? Prepare a Moral and Business case for cessation of university sponsored
football programs.
Teaching Outline and Analysis
1. Do NFL franchises operate as socially responsible businesses? Assess the five components
of an NFL franchise’s Corporate Social Responsibility Strategy.
From the available information, the NFL franchises operate as socially responsible businesses.
The five components of an NFL franchise’s Corporate Social Responsibility Strategy:
1. Actions to ensure the franchises operate honorably and ethically:
The NFL franchises operate under many self-imposed rules to ensure player safety.
4. Actions to enhance employee well-being and make the franchises a great place to work:
The NFL has shown unwavering concern for the well-being of its players. With respect to concussions
and CTE, the NFL was proactive, and in 1994, eight years before CTE was identified, NFL Commissioner
Paul Tagliabue created the Mild Traumatic Brain Injury (MTBI) committee. At the time, concussions
Case 29 Teaching Note NCAA Football: Is It Worth It?
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2. Prepare an economic analysis of the decision to accept a college football scholarship versus
attending a prestigious academic college. Use the costs and salary information presented
in the case to compute the Net Present Value of earnings of both alternatives. State all
assumptions that you make in your analysis.
Table 1 below presents net present value calculations for the value a scholarship at a public university and
prestigious private university.
Assumptions:
nFive years to complete college degree.
median to mid-career or 10 year salary) to the given end salary at the end of 10 years.
nDiscount rates of 0%, 5%, 10% and 15% are assumed.
Data for the calculations were obtained from case Exhibits 1, 2, 5, 6, and 7.
Simple net present value (NPV) analysis, given the assumptions stated above, show that Jacoby should take
the prestigious college alternative. With a reasonable 5% discount rate, the NPV for the 25 year income
stream for the football scholarship alternative is $917,191.12. The NPV of the prestigious academic college
Case 29 Teaching Note NCAA Football: Is It Worth It?
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Year
Cost of Attendance/Value
of Football Scholarship
Cost of Attendance/Value
of Football Scholarship
at a Prestige University Difference
13 77,589 100,371 22,782
14 82,687 108,261 25,574
15 88,119 116,770 28,651
16 93,909 125,948 32,039
17 96,726 129,727 33,001
18 99,628 133,618 33,991
19 102,617 137,627 35,010
20 105,695 141,756 36,061
21 108,866 146,008 37,142
22 112,132 150,389 38,257
23 115,496 154,900 39,404
24 118,961 159,547 40,587
25 122,530 164,334 41,804
26 126,206 169,264 43,058
27 129,992 174,342 44,350
28 133,891 179,572 45,680
29 137,908 184,959 47,051
30 142,045 190,508 48,462
NPV@0% $2,287,258.79 $2,870,982.78 $583,724.00
3. If Jacoby Jackson decides to accept a football scholarship, and is successful in the NFL
draft, what can he expect to earn over his athletic lifespan? State any assumptions that you
make in your calculations.
Assumptions:
nJacoby goes in NFL draft (goes to NFL immediately after graduation)
nJacoby plays in the NFL four years
Case 29 Teaching Note NCAA Football: Is It Worth It?
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TABLE 2. Net Present Value Calculations for the Lifetime Earnings as an NFL Football Player
Year Salary
1-26446
2-26446
3-26446
4-26446
5-26446
6420000
7510000
8600000
9690000
10 79989
11 86276
12 93057
13 100371
14 108261
15 116770
16 125948
17 129727
18 133618
19 137627
20 141756
21 146008
22 150389
23 154900
24 159547
25 164334
$ 1,441,594
NPV@0% $6,456,586.50
NPV@5% $2,804,437.78
NPV@10% $1,492,522.66
NPV@15% $901,832.16
Note: Years 6 – 10 are Jacoby’s NFL years
Case 29 Teaching Note NCAA Football: Is It Worth It?
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FIGURE 1. Decision Tree for Options for Choices Related to University Attendance and NFL
Participation
Note: The expected value of the football scholarship and intending to play for the NFL and the expected value of
the Prestigious University option are equal when the probability to playing for the NFL reaches 7.4%.
4. Should universities continue to support football, considering the large body of evidence
that indicates that many players will get concussions and of those, some will suffer life-time
debilitation from Chronic Traumatic Encephalopaty (CTE)? Prepare a Moral and Business
case for cessation of university sponsored football programs.
Students will be mixed on the ethical nature of contact sports such as collegiate football. Those arguing
against the risks of the sport may suggest that universities should adhere to a moral case for cessation of
university sponsored football programs is based on a standard of “It’s the right thing to do”.
Students arguing a business case for cessation of university sponsored football programs should may suggest
the following points:
nThis action can lead to greater patronage:
A strong and visible signal that the university intends to be socially responsible could give its academic
programs and non-contact sports programs an edge in appealing to potential students, spectators, and
their other stakeholders. This could result in growth in the student body, more paying spectators at
nThe strong commitment to socially responsible behavior reduces the risk of reputation-damaging
incidents:
If universities continue to sponsor football, there is no doubt that concussions would continue, and
the probability of a very serious, traumatic brain injury was high. The legal community was finding
concussions and CTE to be a potential cash-cow and was actively soliciting cases. In addition to the costs
Case 29 Teaching Note NCAA Football: Is It Worth It?
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costs would be reduced by eliminating football (however, considering the income that some universities
receive from football, there may be no net savings).
nOpportunities for revenue enhancement may come from social responsibility and environmental
sustainability strategies.
Eliminating traditional (contact) football could allow universities to focus resources on alternative
sports or other university activities and functions that could lead to revenue enhancement.
Epilogue
There was nothing new to report at the time this teaching note went to press.
