“How much value do you create for a school?”

history of plutocracy

That’s the question Nick Saban recently asked, in order to justify his $7 million plus annual salary. The University of Michigan’s recent hiring of Jim Harbaugh, for what amounts to base pay of $35 million over seven years, has intensified the debate about the nature of college football. As I’ve written many times now, I think that debate should long since have been laid to rest. Among the big-time programs, college football is a business enterprise (as is college basketball), for which all of its participants should be paid.

As the New York Times reported last week, college football at the upper reaches is, in financial terms, becoming evermore like pro football. ESPN is now paying $7.3 billion over 12 years – more than $600 million a year – just to broadcast the seven games that comprise the major bowls, including the college football playoffs and national championship game. This is in addition to the billions of dollars that will flow to the major conferences as a result of the creation of conference-specific networks, as well as the roughly $11 billion deal the NCAA signed to broadcast the NCAA men’s basketball tournament over the next decade.

Despite the efforts of some, including the ludicrous Big-12 commissioner Bob Bowlsby, to argue that these are education-first enterprises, a growing public understands perfectly well that it just isn’t so. The Times quoted the long-time Texas (and UNC) football coach Mack Brown thusly: “When you hear presidents and athletic directors talk about character and integrity, none of that really matters. The truth is, nobody has ever been fired for those things. They get fired for losing.” It will shock precisely no one to learn that the major incentives in Harbaugh’s deal hinge on whether he brings home conference championships and steers the Wolverines to the college football playoff.

Among the perversities of the current system is that due to the non-profit nature of the entities the house these lucrative entertainments, taxpayers are effectively subsidizing these massive coaches contracts. As the economist Dean Baker explains (Dean was a graduate student at UM when I was an undergrad there), in Harbaugh’s case, the subsidy amounts to about $2.8 million out of his $7 million base pay.

The Bowlsbys of the world have tried to argue that the prospect of paying players would rain doom and gloom down on the heads of all universities. They’ve also engaged in angels-dancing-on-the-heads-of-pins sophistry to argue against the possibility of a sensible formula for doing so. There would, of course, be legal and institutional complications inherent in pay-for-play. But it’s not as if we’re talking about splitting the atom. Dave Berri’s most recent column for Time.com offers one method of determining pay for players. Berri looked at the revenue generated by basketball at the University of Kentucky, noted that in the typical pro sports leagues, players get about half the revenue, and then derived shares for each players depending on how many wins they contributed to the program. Berri focused on the one-and-done players because this category of player is obviously only in school for one reason – the NBA and the NCAA have essentially conspired to prevent them from turning pro until they’re out of high school for a year. As absurd as the educational pretense is for the typical elite football recruit, for the one-and-done collegian, even the figleaf of an educational justification is a joke. By Berri’s method, Anthony Davis was worth a bit less than $4 million to the school in 2011-12, and Julius Randle was worth about $2.6 million last year. We can quibble about the details, Berri’s method of player evaluation and so forth. But the market logic is clear. If Nick Saban believes he is worth his salary because of his own conception of the value-added revenue generation he provides to the University of Alabama, there is no sound remaining justification for denying player pay based on their own value-added contribution to their universities.

Coaches current salaries, inflated by the artificial restraint on player pay, would need to come down, of course. But they could still make a fine living – commensurate with the salaries of the best paid educators. There are worse fates.

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One comment

  1. As Dave has pointed out before, college coaches getting paid as much as poor coaches but rookies get screwed in the pros while college athletes are basically working for slave labor wages.

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