12/23/2013 10:34 am ET Updated Feb 22, 2014

College Football Players Are Getting Robbed Of 6-Figure Salaries -- By Their Coaches

The highest-paid state employee in Alabama just got another massive raise. And for that he can thank many of his own laborers, who make almost nothing.

Nick Saban, the head coach of the University of Alabama's football team, signed a new contract last week worth between $7 million and $7.5 million a year, up from $5.4 million. This followed a crushing loss to archrival Auburn after an otherwise sterling season. His team is 12-1 and headed to play in the Sugar Bowl in New Orleans in early January.

Under his extraordinary new deal, Saban will take home 14 times what university president Judy Bonner earns, according to the Birmingham News. He will make 157 times the salary of the average school teacher in the state.

Saban probably deserves to be the highest-paid coach in college athletics, having won three national championships. But his on-the-field success does not explain why his compensation should be on par with that of top NFL coaches. His pay is equivalent to that of Bill Belichick, the tremendously successful coach of the New England Patriots, a franchise that generated $408 million in 2012 -- more than four times as much as Alabama's football program.

In all of American sports, only Sean Payton of the New Orleans Saints, with an $8 million salary, earns more than Saban.

The reason why Alabama can afford to pay its coach so much has everything to do with college football's fixed, artificially low labor costs. All college players receive essentially the same deal from their school, regardless of talent or ability. They toil, sweat and bleed in pursuit of athletic excellence in exchange for a free education, free housing and a meal plan.

At Alabama, an athletic scholarship is worth about $21,000 a year.

In this closed system, what Saban does best of all is hugely prized: He is a recruiting genius -- possibly the best ever. Year in and year out, Saban convinces an outsized number of elite athletes to cast their fortunes with the Crimson Tide. He is so devoted to this chore that when a golf buddy called to congratulate him for winning the 2012 national title over LSU, Saban reportedly complained that the "damn game" had cost him a week on the trail.

With nothing to offer aside from a scholarship, recruiting success is all about who can tell the best story. Saban's pitch is that Alabama is a tradition-rich program that wins championships and offers athletes the very best chance to play in the NFL. What Saban and his brethren cannot offer, at least not under the rules that govern college sports, is the one thing that could undermine the value of this pitch: He can't offer to share with players the huge profits their athletic endeavors generate.

Alabama's football program generated $88 million in 2012, according to the Department of Education. With 85 players on scholarship, its player costs were just $1.8 million -- about 2 percent of revenue.

In comparison, NFL players take about 50 percent of revenue their teams generate, for an average of $1.9 million per player per year. In other words, the average NFL player takes home an annual salary equivalent to the combined value of the scholarships offered to every player on Alabama's team.

This gap frees up a lot of money for colleges to spend on other things: big stadiums, fancy facilities, coaches' salaries. It explains how a college program can compete salary-wise with a top franchise in the most successful professional sports league on the planet.

Ellen Staurowsky is a professor of sports management at Drexel University and a co-author of a report that claims student athletes are deprived of billions in dollars of revenue that they deserve.

Her analysis found that, if football revenue were evenly split with athletes, each of the 7,560 players on scholarship at Division I-A schools would receive about $115,000 per year. At Alabama, players would make about $450,000.

"There is a redline connection between the capacity of the big-time college sports system to reward its coaches so generously and its underpaid labor force," she told me.

Players are increasingly taking note of the disparity between what their scholarships provide and the money their efforts generate. This fall, 28 college players on three teams (Georgia, Georgia Tech and Northwestern) wrote the letters "APU" on wristbands and towels worn during games. The acronym that stands for "All Players United," a movement affiliated with a group that advocates for player play. A lawsuit by former UCLA men's basketball player Ed O'Bannon against EA Sports over the use of player likenesses in its video games has mushroomed into a broader challenge to collegiate amateurism rules that prevent players from profiting from their sport. Efforts are also underway to form a college player's trade association.

But they face a tough fight, from administrators and coaches who assert that payer play would corrupt the integrity of the game, even as their schools pinball around conferences in the search of the most lucrative television contract.

The University of Texas flirted with moving to the Pac-12 conference before agreeing in 2011 to a deal with ESPN worth $300 million over 20 years to create a Longhorn sports network. Rumors that the football team's head coach was on the way out sparked Alabama's decision to give Saban a raise. He is now probably out of the picture, but with more than $100 million in football revenue last year, it is possible that Texas could pay whoever it hires as much as $10 million a year.

That would work out to the value of 455 full scholarships to attend the school.

It's likely that, even if this pay gap were closed, even if college programs were allowed to reward players with cash payments, that teams like Texas and Alabama would still attract plenty of elite athletes.

But it is also likely that many prospective student-athletes would opt for the program that offered the most generous reward, regardless of coach or a program's pedigree. Professional athletes make that calculus all the time. Just a few weeks ago the tradition-rich New York Yankees lost star second baseman Robinson Cano to the Seattle Mariners, a bad team that toils in relative obscurity, for the simple reason that Seattle was willing to cut a bigger check.

Under this scenario, Saban's national championship rings wouldn't matter as much, nor would his ability to sweet-talk moms on the recruiting trail. The value of his special talent would be diminished. There would also be less money stuffed into his university's piggy bank. He would still make gobs of money -- but would he really be worth $7.5 million?

Disclaimers: Most members of my family, including both of my parents, attended the University of Alabama. They do not all agree with my assertion that college players should be more fairly compensated, or that Saban earns too much. They also insist that I note, in the interests of full disclosure, that I am an Auburn fan.