Wednesday, April 27, 2005

Thanks to this post by John Quiggin, I've spent much of the day mulling the current state of collegiate athletics.

Although Quiggin doesn't mention it, that state can pretty much be summed up by one curious fact: in 2003, the highest paid employee of our federal government was not the President or the Secretary of Defense or the Chief Justice; rather it was the head football coach at Army.

Granted, only 35% of that salary came from taxpayer funds, while the rest was subsidized by the "Army Atheltic Association". But even that 35% percent -- around $210,000 -- was still more than Bill Clinton ever made.

So why was Army's football coach being paid a presidential salary? The immediate answer is that that was the market value for someone of his caliber in his position. (The coach, Bobby Ross, was a former NFL head coach.)

Yet why was the market value so damn high in the first place?

Here things gets a little more complicated, but the general answer is that there's really no where else for all the money to go. True, part of the revenue that collegiate athletics generates does go to athletic scholarships, and part to the universities themselves. But when it comes to the actual producers of that revenue -- the 12 basketball players, say, and their 4 or 5 coaches -- only the head coach is allowed to negotiate his or her salary in a free market. As a result, when any school seeking a higher share of the multi-billion dollar college sports industry feels compelled to outbid other schools for proven coaches, the salaries quickly get ridiculous.

How to correct that imbalance I'm not really sure. The most obvious answer is to drop the pretense of amateurism and just start paying the players directly under a labor contract; but if you dropped that pretense, it isn't at all certain that the revenue will remain.

The only further commentary I have to offer is that in the long-term there's probably going to be something of a natural correction to all this. Since the rise in merit-based scholarships and the increase in female enrollment didn't really take hold until the 80s and even 90s, my guess is that as those classes begin to hit their peak earnings potential in the next few decades, the pattern of alumni giving will change accordingly. At Harvard, for instance, alumni giving after the Yale game still sways significantly enough -- from what I've heard, roughly $20 million more in winning years -- for the development office to sit up and take notice. Yet the ones writing the checks mostly graduated in the 60s, when Harvard was still all-male and its students were much more likely to have viewed their admittance as a birthright. They may care a lot about football, but it's highly unlikely that those who've followed them will.

Admittedly, Harvard is a unique case, and a sizeable portion of athletic revenue does indeed come from the NCAA's massive television contracts. But as big as those contracts are, alumni giving still tops it considerably. For that reason it is the alumni who still control how much and in what ways a university can grow. The more alumni bodies change over the next few decades, my guess is that what they earmark their money for will as well.


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