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Thursday, February 26, 2009

Jim Calhoun's $1.6 million (Plus)

You may have heard about the post-game press conference exchange between a Connecticut political reporter and UConn men's basketball coach Jim Calhoun.  Here's the clip:

Calhoun raises the following justifications for his salary:

  • I want to retire some day.

Well, we all do, don't we?

  • I make a lot more than that.

So, you make a lot more than $1.6 million?  What, do you have a hedge fund on the side?  Perhaps you sell your own sculptures?  A cottage business on eBay?  Oh no, that extra money would be based on endorsements you make -- perhaps because of your state job?

  • We bring in $12 million to the university.

This argument has been getting this most play.  First off, Rick Green of the Hartford Courant offered this analysis:

Mike Enright, a UConn associate athletic director, told me Calhoun's $12 million figure is "in the ballpark." But that does not include the basketball program's $6 million in expenses. To get to Calhoun's "over $12 million" figure, take the $7 million from TV, radio and ticket revenues from men's basketball games. Then add about a third of the $20 million UConn gets from fundraising, which is roughly the amount that basketball contributes. That brings you to the $12 million to $13 million that Calhoun says he brings in, Enright said.

So, minus expenses, it's really about $6 million, largely in alumni donations.  A pretty good return.  But is Jim Calhoun solely responsible for generating that $6 million?  What about the AD?  What about the assistant coaches?  What about the University who provides the facilities?  And what about the players?  Surely, the players are in some way responsible for the $6 million?  Oh, that's right, they're fungible students -- and they're getting a scholarship.  You know, I hope that gets mentioned by someone in all this (besides me).  Calhoun is making $1.6 million (plus) and his players get scholarships. 

Of course, it's not his fault, he could argue, that the system is set up this way.  And if you look at these other salaries, he may even be underpaid by market standards.  But he didn't make those arguments.  Calhoun may be contractually entitled to $1.6 million, but he sure does a lousy job in defending it.

Posted by Matt Bodie on February 26, 2009 at 11:58 AM | Permalink

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Comments

Aaron and M. Bodie,

You're absolutely right. The original idea here was that Calhoun's defense of his salary was poorly articulated. But, part of my point is that lawprofs criticizing a basketball coach for poor rhetorical skills is like a basketball coach criticizing a lawprof for poor foul shooting.

I don't know about you folks, but I'm glad that my foul shooting skills won't be part of my tenure review.

Posted by: Husky Alum | Feb 27, 2009 8:10:32 PM

There's a difference between saying 'Coach A's justification for his high salary is weak', what M. Bodie seems to be saying, and 'Coach A should not be paid his salary', what commentors have interepreted M. Bodie's post as saying.

The ROI on Calhoun is not the 8x he and others want you to believe. Just as the ROI on Obama isn't 100,000,000x by virtue of him 'bringing in' trillions of revenue to the federal gov't. A large part of it is institutionalized by virtue of the position.

Posted by: Aaron Williams | Feb 27, 2009 6:18:09 PM

2 things...
1) Jim's reaction: I didn't think it was all that bad. I've seen worse from him and certainly others. Not even worth mentioning really.
2) 1.6M - He's worth every "dime"! Check his biography. The guy is an American hero by any standard. Born to modest means; excelled in sports and school; dropped out of college to take care of his family!!; went back and set all kinds of records; became one of the most successful coaches of all time; continues to coach despite 2 episodes of cancer when he has plenty of money to retire any time he wants to (that retirement stuff is just a joke people); He's as generous as anyone can be... he built a friggin' cardiology wing in Hartford for gosh sakes!; as has already been stated - built the UConn program from total obscurity to nationally recognized excellence; I could go on, but this should certainly suffice!

Picking on Calhoun is a pathetic and unjustified waste of time. I hope this episode doesn't drive him out of basketball or to another program.

Posted by: Steve | Feb 27, 2009 4:24:48 PM

Thanks for all the lively debate. Just to make a few things clear:

- As I said in the post, "he may even be underpaid by market standards." Apparently Billy Donovan is making $3.5 million. I do not doubt that Jim Calhoun has brought in a lot of value to UConn; he could potentially command a salary of $2 million, $3 million, even $4 million. But it's an artificially created market that enables him and Donovan and the others to make that much money. (And yes, you could make this argument about law professors, too.)

- As for D's point, I agree that the age cap has made coaches more valuable. But what does that mean? It means they get paid more. Get rid of the age cap, and the talent pool for college basketball suffers, which means that college basketball ratings go down, which means universities and coaches get paid less. How much are college baseball coaches paid? Do you think that might change if baseball had an age restriction and no minor league system?

Posted by: Matt Bodie | Feb 27, 2009 1:47:35 PM

Matt:

You say the NBA age restriction is a market restriction that helps coaches. Wouldn't this restriction also underscore the importance of a college coach who succeeds at recruiting? If there is a constant stream of extremely talented players, who are forced to spend at least one year in college, that places a tremendous burden on coaches to constantly recruit top talent in order to stay competitive. Under the old system, a team could potentially recruit one or two really good players, then surround them with a supporting cast for the next four years. The age restriction means a college coach will have to constantly be refreshing his talent pool in order to stay competitive with other top programs doing the same.
This may then be another reason why Calhoun's salary is justified--maybe he's responsible for more of that $6 million than you seem to give him credit for.

Posted by: D | Feb 27, 2009 12:15:46 PM

Having graduated from UCONN in 1994, I can add a few things. First, Calhoun IS the men's hoops program. A few years before I attended UConn, the basketball program was next to nothing. Few (if any) top-notch players went there; until Calhoun slowly built the program. By the time I was there, it was starting to get noticed. You started to see a few highly-ranked high school players on the team (Scott Burrell, Donyell Marshall). A few years after I left, they won the championship and began being mentioned in the same echelon as Duke, UNC, UCLA, and Kentucky. Recruiting became isolated to nothing but top-tier players (Emeka Okafor, etc.).

Meanwhile, the women's team caught fire thanks in large part to a significant degree of lobbying by Calhoun. Then, the football team started to flourish, and it now frequently cracks into the top 25. So, you can indirectly trace this new football revenue stream to the success of UConn hoops.

Finally, and this is quite indirect, the university has improved massively in the exact years that the hoops team hit the mainstream. A few years before I attended, it was a run-of-the-mill public school with nothing more to offer than any other school in New England. Nationally, I think it wasn't even in the top 50 public universities. Since then, it has been the #1 public school in New England every year, and it is usually between #20 and #25 nationally (among schools such as Iowa, Purdue, and Ohio State). Is this all due to Calhoun? Probably not, but he has had a significant influence on the school's success in the last 20 years.

JC's answer may not have matched the eloquence of Ted Olsen at the podium at SCOTUS, but Calhoun is not a trained speaker. He coaches basketball, not rhetoric. I wish the law prof elite might sometimes recognize that the market values blue-collar talent like Calhoun's as much (or in this case more than) the talent we lawprofs have to sell.

As for the ignorant comment about eliminating the black studies departments to save money (a comment riddled with grammatical errors, I might add), profs in UConn's Institute of African-American Studies taught this white boy some lessons that have made him a better law professor. Money well spent, in my book.

Posted by: Husky Alum | Feb 27, 2009 10:07:28 AM

He makes 1.6 million in salary. Probably has his car provided for by local dealers along with a sweet deal on his mortgage. Uses university facilities for his camps and shows. Why is it too much to expect him to understand that college sports serve one function for the schools: public relations. Really, the guy couldn't handle one, not very bright heckler? I have to agree with the heckler on one point. Sports reporters these days, far from being the contentious asses the previous poster alleges, are usually shills for the home team. They're afraid to ask tough questions.

Posted by: rr | Feb 26, 2009 11:09:36 PM

Calhoun made a tragic mistake. He should have asked the reproter to the podium and then smacked him in the mouth. Taken mic and shoved it where the sun don't shine.
Lawyers were once considered to be the bane of our exisitence, but as I have aged it is accountants and "journalists". Journalists are arsonists with words and then hide behind I am an "inquiring mind".
Would suggest that if University has a budgetary problem they fire the professors who are teaching "urban studies", geography, "leisure sports management, black studies etc. Would save both the university and the world not only money, but degreed morons.

Posted by: Jack | Feb 26, 2009 7:56:54 PM

If the supply of players is really elastic, I'm not sure why coaches spend so much time recruiting. But in fact the NBA age restriction is another market limitation that helps college coaches. Even superstar players can't move to the NBA if they're not old enough. That also helps the college coaches by making the NCAA more important as a gateway to future success.

Posted by: Matt Bodie | Feb 26, 2009 3:03:48 PM

sorry, meant elastic in the last sentence . . .

Posted by: Jon Klick | Feb 26, 2009 2:24:04 PM

Maybe, though we don't have a good counterfactual here for an open market. Do the guys who play for Marathon Oil etc make very much money? The superstars would just jump right to the NBA and the rest might well be willing to play for room, board, training facilities, exposure, etc. The supply of players at the collegiate level, short of the Moses Malone, Kobe Bryant, LeBron James-superstar level who can already get an NBA contract even without the development & exposure of the college game, is probably pretty inelastic, implying they'd be unlikely to get much of the available rents.

Posted by: Jon Klick | Feb 26, 2009 2:01:47 PM

I agree that what Paul said is the best response and pretty easy to come up with. In response to Robert, I'm not making an argument for players being paid. What I am arguing is that Calhoun can claim that the "we" of UConn basketball is "he" because everyone seems to be forgetting the players. The NCAA is not the NBA; it's not a professional league. But the coaches (and universities) get the best of both worlds -- they don't have to pay their players because they are students, but they get to take home as much money as this "market" will pay them.

And that's what I would say to Jon's point. The players go to top college programs because such programs give them the best chance for notoriety and money down the road. They are maximizing their utility under the circumstances. But what if colleges could pay their players? Wouldn't the players then get part of that revenue? The NCAA is an artificially restricted market that allows universities as well as university coaches to take home more than they would if players could get paid.

Posted by: Matt Bodie | Feb 26, 2009 1:48:35 PM

I'd say that if a college coach's program brings in a net profit of $6 to $7 million, then a $1.6 million salary is probably justified even after accounting for the AD's value-added, the university's cost of facilities, and the like. A college basketball coach is uniquely valuable -- he is the primary engine of team development, training, and performance.

In any event, I must say that this entire debate is rather unseemly. It's pretty easy to sit around and point fingers at individual salaries and perks and chortle at the recipient's justification. It would be just as unseemly if a college basketball coach sat around mocking a public-school law professor's attempt to justify his or her own salary and perks (including tenure, job responsibilities, and working conditions) as a purely economic matter.

Do mature, intelligent adults really sit around and complain about strangers' paychecks? How disturbing.

Posted by: Adam | Feb 26, 2009 1:30:53 PM

It's always hard to estimate marginal product in joint/team production situations (how would you go about determining your marginal product at St. Louis), but I suspect Calhoun would come out looking pretty good under most analyses even given the points you raise. As for the players, they don't end up at a school exogenously. Most people think that the main drivers are whether the school can get the player into the NBA (and Calhoun's done pretty well there, averaging 1 per year while it's hard to even find NBA players among the pre-Calhoun UConn rosters), win a nat'l championship (Calhoun's got 2), and maybe success in a high profile conference (and as much as it pains this 'Nova fan to admit it, UConn has more or less owned the Big East under Calhoun), so Calhoun should get credited with much of their marginal product as well as far as UConn is concerned.

Posted by: Jon Klick | Feb 26, 2009 1:27:25 PM

Matt ... if you were put on the spot fifteen minutes after a game, I SERIOUSLY doubt you could put together a better "defense."

Further, considering you went to P and H ... you're probably unaware that Calhoun has coached at UCONN for 20+ years. He basically put the University on the map.

Also, you're forgetting that UCONN basketball generates a HUGE amount of publicity. How much is that worth?

Also, when applying to UCONN ... both basketball teams (men's and women's) are a HUGE selling point.

This was a terrible post.

Posted by: Chris | Feb 26, 2009 1:16:22 PM

Matt ... if you were put on the spot fifteen minutes after a game, I SERIOUSLY doubt you could put together a better "defense."

Further, considering you went to P and H ... you're probably unaware that Calhoun has coached at UCONN for 20+ years. He basically put the University on the map.

Also, you're forgetting that UCONN basketball generates a HUGE amount of publicity. How much is that worth?

Also, when applying to UCONN ... both basketball teams (men's and women's) are a HUGE selling point.

This was a terrible post.

Posted by: Chris | Feb 26, 2009 1:14:32 PM

The old "college players should get paid" nonsense which it seems like you're alluding to in this post is a non-starter. Sure they "make" a lot of money for the school, but then that money gets spread around to pay for the other government-mandated sports programs (like women's crew). And you make it sound like getting to go to a fairly good college for free and have thousands of people watch you do something you love (and cheer for you) every week is a raw deal. I would argue that it is not, especially as students around the country are feeling the pinch of the faltering economy and piling up student loans.

Additionally, these good players go to U Conn because of Jim Calhoun. This isn't Duke, or UNC, or Kentucky, where there was a well established basketball program before Calhoun arrived. He actually IS responsible for the prestige of that program (not only through his own hard work, but also the hard work of the assistant coaches HE has a hand in hiring).

Finally, you argue that he "did a poor job of defending himself." He surely did. You have to remember, however, that he got blindsided by this freelance rabble rouser in a post-game press conference. That's neither the time nor the place for this type of question. Was it a type of question that needs to be asked? As you yourself admit, most of the money they're spending in the basketball program is through alumni donations, so it seems fairly irrelevant that the state has a budget deficit. However, if it WAS a relevant question, there was surely a much more appropriate forum in which this question could have been asked.

Posted by: Robert | Feb 26, 2009 1:13:59 PM

Matt, shouldn't he have just said -- you're asking the wrong person; if you have complaints about my salary, talk to the university?

Posted by: Paul Horwitz | Feb 26, 2009 1:08:33 PM

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