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Why they make so much!
Russell Roberts Professor of Economics at George Mason University, Fairfax, VA
2007
When college football coaches get a lot of money, people complain about the
injustice of it. Some of those complainers are fans, who have romantic ideas
about college sports. But they're the reason coaches make so much.
In this
piece at the Boston Globe, I tell complaining college sports fans to look in
the mirror. An excerpt:
But if those fans want to find someone to blame they should look in the mirror.
They are the source of that salary they find so exorbitant. Their desire to
revel in victory is what drives the university to pay not an exorbitant salary
but merely the going wage, what it takes to attract a talented coach away from
other universities and the professional ranks.
At Alabama, that fan is tired of losing to Auburn. At Oklahoma where Bob Stoops
makes more than $3 million to coach the football team , alums from Oklahoma want
to revel in victories over Texas. Now and then, they expect a national
championship. At Ohio State, Jim Tressel makes a few million to ensure that the
Buckeyes stay competitive with Michigan.
What I didn't have room to explore in the piece is the role of large public
universities in the escalating rewards to college football and basketball
success. If you look at the top 20 teams in each sport, you'll see the dominance
of large public universities with an occasional USC in football and Duke in
basketball. Part of the reason for this is the political pressure large numbers
of alums put on Presidents of universities and implicitly through politicians to
have a successful team.
The other interesting topic is the NCAA. One reader came to the defense of the
NCAA as a well-intentioned organization that tries to keep the game honest.
I disagreed. The NCAA relentlessly prevents universities from paying their
players in any remote fashion. They have so much trouble keeping the market from
working that they ban any scholarship athlete from taking any job of any kind
while on scholarship. That's to prevent the restaurant owner from overpaying the
busboy as a form of bribe.
What they did to Alabama in a recent recruiting scandal is what they do to every
school that tries to reward any player. They punish them. Some see that as a
virtue because it stops something we call "cheating." But what we call cheating
is a natural consequence of trying to stop market forces from working. Because
that avenue of competition is ruled out, colleges pay coaches large sums of
money and build absurdly luxurious dorms and practice facilities as a way of
attracting good players.
The NCAA is a cartel. It is a way to reduce competition among rivals. It has no
moral compass, no intentions. Anything resembling a moral compass is hype, spin
and PR that exploits the public's romance about university life. They're not
evil, either. They're just a way to make life easier for colleges and their
leaders who see football and basketball as a way to make money and to have
goodies to hand out to supplicants who want access to good seats, and the
opportunity to rub elbows with glamorous coaches and players. Expecting the NCAA
to put the interests of students first is like expecting Congress to pass a law
against "special interests." It just isn't in the nature of the beast.
The NCAA is a private, voluntary organization. Most cartels die quickly because
of the temptation to cheat on the agreement. The form that the cheating takes
here, is to build luxurious dorms--there's no way to limit and monitor
luxuriousness. If you could, they would. But that's mild. So why doesn't more
cheating occur? One answer is that it does and that there's a lot more under the
table payments going on than the NCAA discovers.
The other answer is that no one
team can cheat. If one team refuses to abide by NCAA regulations, and leaves the
NCAA, they have no one else to play against. You need a group of teams to defect
and start their own league. The appeal of that is that by ignoring the NCAA,
they could pay the best players and have the best teams and get even more TV
money etc. But the risk is high and the overt payments to players might handicap
viewership and fan interest for cultural and romantic reasons. Even so, a group
of teams did defect in some sense a while back and get their own TV package.
Notre Dame did it, too. And the BCS is a sort of cartel within the cartel--it
essentially recognizes that not all cartel members are created equal and deserve
equal treatment.
College sports is a big business. I have no problem with that. (Though whether
it should be tax exempt is another question. The threat of removing that
exemption does limit the venality.) But it is a big business built on the
bizarre illusion that it's not a big business. It's a big business we like to
pretend is a game. To pretend it's a game and complain it acts like a business
is human but illogical.
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Email
llc@cottonharbor.com
