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Wednesday, December 16, 2009

Mack Brown's $2 million raise

Having complained about Jim Calhoun's $1.6 million salary, I think I'm obligated to take issue with a raise that dwarfs Calhoun's entire salary.  Mack Brown is now making $5.1 million a year as a football coach through the year 2016 (or until the next raise).  A resolution of the UT Faculty Council said the deal was "unseemly and inappropriate." This resolution has drawn its own share of criticism.  The UT president pointed out that the athletic program, under Brown, has had no subsidies or deficits and has channeled $6.6 million into academic programs in recent years.  This is the same version of the argument used to support Calhoun's salary -- namely, the athletic programs more than pay for themselves, so they can pay their people in the millions of dollars.  Just today I heard ESPN personalities Mike Greenberg & Tony Kornheiser accuse the UT professors ("eggheads," in Kornheiser's parlance) of being completely wrong on the economics.

What the commentators are missing -- or, at least not talking about -- is that the "market" for college coaches is a grossly distorted one.  There is a lot of money floating around college sports -- primarily through TV contracts, but also ticket sales, team endorsements, licensing, and advertising.  But that money has nowhere to go, other than to the schools and the coaches.  The NCAA places strict limits on what players can get from their university -- only a scholarship.  And NBA and NFL rules essentially require that players spend time in college before entering the pros.  So what we have are athletes who must spend time in college to pursue their profession but cannot get paid for it.  So the money goes instead to the coaches.

If you have any doubt about this, just look at baseball.  Baseball has a thriving minor league system; there is college baseball, but you need not go to college to get into the pros.  How much do college baseball coaches get? This article says they make about one-sixth what football coaches make.  This one (from 2007) says that the highest paid college baseball coach makes $600,000.  Or look at pro football.  Only four NFL coaches made more than Mack Brown last year (according to this estimation).  Thirteen made less than $3 million; five made less than his raise. 

If we are going to keep the system we have, let's be honest about it.  We now take talented young athletes and use their skills to fund our universities.  The coaches help facilitate this -- and they are taking more and more off the top.  There are reasons to support this system, but saying that coaches "deserve" this money because of a distorted market is not one of them.

Posted by Matt Bodie on December 16, 2009 at 12:45 AM in Corporate, Sports | Permalink

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As a post-script, I think your understanding of the college athletics market is also a bit flawed, Mr. Bodie. The reason that college baseball coaches aren't paid as well as the football coaches has nothing to do with the fact that the best athletes have the option of skipping college and being paid right out of the gate. It has everything to do with the fact that the number of people who follow and support college baseball is dramatically smaller than the number of people who follow and support college football. Does that have to do with the fact that the truly elite players aren't on the field? No. The players who participate in baseball's minor league system aren't bringing in large crowds and interest, either. Minor league baseball teams aren't very profitable, if they turn profits at all. Major League Baseball is the cash cow, and that's where fan interest lives. While college baseball is growing, there's just less interest in the development ladder for baseball than there is interest in college football. College Football has developed a large and devoted following that minor league baseball hasn't... and it's because it's a better product. It's a better product built in large part by the coaches who are so "overpaid".

Posted by: Bruce | Dec 17, 2009 2:55:08 PM

If any of you brought the type of money into your university that Mack Brown brings into his, then you'd be able to command that type of a salary.

Why?

Well, other universities would want you to come join their faculties. They'd offer you more money. Your employer would need to give you a hefty raise to stay. If you continued to bring more and more money and notoriety to your university, you could be expected to ask for more money.

You also dismiss the point about the athletic department at Texas being a self-sustaining body. That's not an insignificant point. Mack Brown's raise isn't costing the UT English Department a thin dime. It's not going to keep the UT College of Music from purchasing a new sousaphone. The money for UT athletics comes from ticket sales, the Big 12's TV contracts, and donors. I'm not a Texas fan, but I can tell you that at my school, the University of Georgia, the coaching salary isn't paid from University funds. Now, perhaps you want to argue that the booster funds in question would flow to the academic programs at UT if football wasn't spending so much money. I'd say your reasoning is flawed. Many boosters give both to sports and academics. But, if the sports teams don't need as much money, I truly do not believe that Billy Bob the Oil Baron's suddenly going to want to build a new library.

I sympathize with the plight of academia everywhere right now. My dad's a professor, and public education's in trouble right now with the economy going downhill and conservative legislators slashing budgets for education. I'd like to see more money going into academic programs. But, attacking Mack Brown's salary isn't the answer. You can argue all you want about whether athletes deserve to be compensated beyond the value of their scholarships. Perhaps they do, but then, a great deal of money that goes to support the non-revenue sports will dry up. And, does an athlete that plays one of the non-revenue producing sports not deserve a salary also?

But, no matter where you fall in that debate, you can't argue that Mack Brown isn't valuable to his university. He brings in a whole lot of money and notoriety to UT, and he's paid accordingly. Don't think that a school like Notre Dame wouldn't hire him away in a heartbeat if Texas wasn't keeping him happy.

Posted by: Bruce | Dec 17, 2009 2:44:22 PM

It's funny how people who don't understand markets simply assume they must be "distorted."

Football at Texas is a huge money maker. Mack Brown is in charge of that franchise. He is paid commensurately to his value to the university.

Posted by: Simple Economics | Dec 17, 2009 9:50:13 AM

Mark,

You've raised the chicken/egg issue; that is, is women's rowing subsidized by football, or is football permitted under Title IX by women's rowing's existence?

It is my suspicion that the closest answer to that is that large-roster women's sports most likely support small-roster men's sports. You never hear of universities cutting football or basketball because of Title IX issues; it's always men's wrestling or men's squash or whatever. Revenue sports aren't going away, no matter what we think of them or how much we wish tailgaters would at least disappear. So, by making it possible for revenue sports to co-exist with non-revenue men's sports despite Title IX's ability to shut them down, there is definitely an important role for sports like women's lacrosse and rowing. But dammit, I hated having to spend my own money to race!

But it's not about me; it's about maximizing utility, and since it is, in the end, football we're talking about (the other two most common revenue sports, basketball and baseball, generally have women's teams even if the women's teams are non-revenue), we do have to acknowledge the elephant in the room: football is not going away, whether we want it to or not. So, if we can expand opportunities for both men and women by including these types of sports, that's better than restricting opportunities by excluding them.

Posted by: Matthew Reid Krell | Dec 16, 2009 2:05:34 PM

Matthew -

Implementation of Title IX isn't perfect, and I can see (though I'm not sure I completely accept) the argument for not counting football in the Title IX number crunching. But I think it's important to focus on the right baseline. While it's true that many schools, including ND, have varsity rowing teams (or other non-revenue teams) while the equivalent mens' team is a club, I think it's also true that at many schools, without football *both* would be clubs. That is, football revenues make it possible for at least some womens' (and, frankly some mens' too - ND has a fencing team, with both men and women on scholarship) teams to be varsity. They aren't taking those opportunities from the mens' teams, because the mens' teams weren't going to be varsity anyway.

Now, on the question of whether universities should be funding all these sports at all - that's a bigger question. I think generally that the positives outweigh the negatives, though I think the question is a lot closer if schools aren't actually educating the student athletes. It's worth noting here, by the way, that the "student athletes don't graduate" problem is not a problem for most sports at most schools. It's a revenue sports problem.

Posted by: Mark McKenna | Dec 16, 2009 11:34:23 AM

As a former collegiate rower (and current rowing booster - second-best backache you'll ever have!), I'll answer Mark's unstated question. A lot of football powerhouses, including both Alabama and Texas to draw on the upcoming BCS championship, have women's rowing teams that are within the athletic department while the men's teams are left as a club. This means that at these schools, the women's teams receive all the support and assistance that any athletic department sponsored team gets (a coach with a salary, uniforms, travel, equipment, etc.) while the men's team either has to fundraise or pay out of the rower's pockets for the same things - or go without.

Why the gender disparity in this sport? Title IX. These schools are able to count, for the purposes of their Title IX statistics (improving women's participation in college athletics by measuring the percentage of athletes that are women), any woman who ever comes to one practice for the crew team. Thus, Alabama's women's rowing coach claims to run close to one hundred women through his program every year. Does he put that many on the water? Almost certainly not. But by having that program, the university is able to basically offset football's bloated roster without having to take any adverse action against any other men's sport. So in a way, the university is using the rowers to make money - albeit indirectly. Schools where the athletic department sponsors the men's team tend to be places where rowing was established before sports like football. At Notre Dame, incidentally, the pattern holds true

The flip side of this is that sports that are less personnel-intensive can get dropped by the wayside. Why have a fencing team when you can sink that money into crew or lacrosse? All of this also begs the question of why universities have athletic-department sports anyway. Intramurals or clubs I can understand, and I understand the economic imperative toward the modern model. But I wish universities would get out of the business of gladiatorial spectacle altogether and get back to education (and is that racist, since collegiate sports enable many low-income African-American or other low-income minority athletes to attend college that otherwise could not?). I don't have answers; but the questions are fascinating.

Posted by: Matthew Reid Krell | Dec 16, 2009 10:44:35 AM

A few other obvious points related to the distinction between baseball and basketball/football. First, successful college basketball/football coaches are hired/retained in a different market than are successful college baseball coaches. Mack Brown, Urban Meyer, and Pete Carroll could easily make the jump to the pros and cash in. See, e.g., Nick Saban, Steve Spurrier, Jimmy Johnson, Barry Switzer. Hard to think of a college baseball coach being directly hired as a big league manager (at least I can't). The possibility of losing a successful coach to either a competitor or the pros plays a crucial role in inflating coaches' salaries (although the presence of money to compete with the pro salaries is obviously a necessary condition to such inflation).

Second, basketball/football coaches have more impact on their teams' performance than do baseball coaches. There are simply more strategic elements to the former games. Third, the reduced salaries in baseball have at least as much to do with the lack of dollars chasing college baseball as they do with the lack of the distortions you describe.

Posted by: anon | Dec 16, 2009 10:38:50 AM

Hey Matt -

This is a complicated issue, I think. On the one hand, in theory it's inaccurate to say that student athletes get nothing of value from their participation. They get a free education, which at some schools could be worth in excess of $200,000. That kind of argument depends, of course, on a belief that the student athletes are actually getting an education. That, unfortunately, is the real underbelly here. Graduation rates among athletes in the revenue sports are embarrassingly low at most schools with successful programs. And even graduation rates are deceiving because some who graduate are leaving with worthless degrees. We could solve some of this problem simply by enforcing meaningful requirements that the schools actually invest the resources in making a high percentage of the kids graduate with real degrees.

On the pay point - you're right, the market is distorted. But it isn't obvious that paying players would necessarily lead to lower coaches' salaries. It could just mean that there'd be less money to give to academic programs - or, in the case of those many programs that already lose money, even greater subsidies to sports programs. That's because some of the explanation for high coaches' salaries in football and basketball has to do with the school's visibility and alumni interest, etc. You just don't see schools using other sports for those purposes.

The final issue about player pay is the question of which athletes get paid. Only a few sports ever make any money for a school. I doubt a rowing team ever even broke even. Should those students get paid too, since they put in a lot of time practicing? There's a distinction to be made, undoubtedly, since the school isn't using the rowers to make money. But at many schools the football and basketball programs pay for most of the other programs. At Notre Dame, football pays for every other athletic program on campus, and it still sends more than $5 million to the academic side.

Posted by: Mark McKenna | Dec 16, 2009 9:09:06 AM

My take on this is here: http://lawandcourts.wordpress.com/2008/05/17/college-sports-pays-your-salary/

Posted by: Jeff Yates | Dec 16, 2009 8:50:00 AM

Great post, Matt -- as always. Only wish you posted more . . .

Posted by: anoninklyn | Dec 16, 2009 6:22:45 AM

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