Monocle Outlays Reaching Dangerous Levels Comment Count

Brian

Sorry this is late. Spent large chunks of the afternoon futilely trying to Google hard numbers on spiraling coach salaries.

Monocle_thumb[2]

You wouldn't know it from the college football world's reaction to HBO's most recent edition of Real Sports—best summed up by Michigan tight end Kevin Koger, who tweeted "They snitched on Auburn lol"—but the point of the thing was a little broader than the Paul Finebaum show. It was yet another discussion about the NCAA's amateurism brought about by March Madness.

This is a near-annual rite. Attention to the tournament invariably sees journalists bring up the eye-popping dollars CBS pays to air it, at which point someone's always like "hey, these players aren't getting any of that" and we get roundtables inexplicably containing Jason Whitlock, Rich Rodriguez, and Billy Packer. Since this is the first year of an even more eye-popping contract we've gotten a heavier dose than usual this year, one sufficient to prompt responses from John Gasaway and Big Ten Geeks. Oh, and also this.

Pieces on these tend to be maddeningly soapboxy. The headline on Whitlock's latest column is witheringly dumb: "Greedy NCAA exploits athletes." The content isn't much better. In an effort to keep things as engineery as possible, a series of questions and a table.

Who is hypothetically getting exploited?

Football and basketball players in power conferences. Nothing else consistently turns a profit. In other sports that occasionally do—baseball and hockey—there is an alternate development path for anyone who doesn't like the NCAA model. The only restriction placed on those players is that baseball players who pass up a contract out of high school have to stay in college at least three years. In other conferences even successful schools like VCU are throwing money down a pit—77% of their "revenue" comes from student fees*. 

Who is benefiting from hypothetical exploitation?

Three parties:

  • Non-revenue athletes. About 30% of Michigan's expenses are related to housing, educating, transporting, and outfitting athletes with another 16% devoted to giving them places to play.
  • Coaches. 17% of Michigan's revenue pays them.
  • Everyone else. 21% of Michigan's revenue goes to the rest of the department.

It is clear that as revenue rises, Coaches and Everyone Else take up an increasingly large chunk of the pie. In the last ten years Michigan has added PSLs to its football seats and seen television revenue skyrocket. They've gone from 25 to 27 sports, and they'll add two more in the near future when lacrosse and a sop to Title IX are added.

Operating revenue has gone from 78 million in 2004-05 to 106 million last year. Outlays to students have gone from 11.4 million to 15.7. Coaches have gone from 9.3 to 14.7, and Everyone Else from 12.3 to 18.5. Chart? Chart.

Michigan outlays to scholarships, coaches, and administrators (millions)

  2004 2010 Pct 2004 Pct 2010
Total 78 106 N/A N/A
Scholarships 11.4 15.7 14.6% 14.8%
Coaches 9.3 14.7 11.9% 13.9%
Everyone Else 12.3 18.5 15.8% 17.5%

Students are essentially constant as a percentage of revenue, and that's only because tuition keeps skyrocketing as long as anyone can get a federal non-dischargeable student loan. They're watching the people around them eat up more and more as a percentage of revenues as places like Michigan get big enough that costs like flying people around and building stuff top out. And this is over six years! In 2007 the average compensation of a D-I head coach averaged one million dollars; last year it had already gone up 36%. When I wrote about Michigan putting EMU on the schedule in 2007 I ran across a now-linkrotted Bloomberg article with this stunning fact:

This relatively ancient Bloomberg article from March 2005 takes a look at the increase in NCAA coaching salaries across the board from '97 to '03 and finds that average compensation went up 89 percent in just six years. This is before the twelfth game. (Though it's noted that there were some twelfth games in there. That was a calendar quirk and not permanent policy, however.) This is before 3-2-5e*. This before Superfluous BCS Bowl and The Two Teams With Six Wins Each bowls. This includes the obscurest coaches you can think of, like Romanian Buffalo Polo.

Eighty-nine percent in six years.

!!!

*[The hated clock rules that got repealed after one year were at the time loathed enough to be referred to solely by bylaw.]

Is there a real case here?

It's getting to the point where the Whitlocks of the world are not entirely crazy. There was a time when Bo Schembechler was making 100k per year and had to have a tearful press conference because Texas A&M offered him the life-changing sum of one million dollars and he turned it down. At that juncture anyone crying about exploitation was nuts, not that there was anyone doing that.

HOWEVA. Given the revenue growth at major universities there is a point at which even the student managers are walking around wearing monocles and puffing cigars and there will be a unified popular opinion that we can no longer treat the people doing the bulk of the labor like Oliver Twist except with infinite sex and training table. Which, granted, isn't much like Oliver Twist at all. But at some point it seems like it.

I don't know how much of the uptick in "Everyone Else" for Michigan is adding to the legions dedicated to getting athletes their educations. It's some. It's probably not that much when you consider the revenue athletes specifically and it certainly isn't enough to look a the above chart without a sense of foreboding as to where this is going. It is clear as day Michigan has money to spend on these athletes, and that goes for every team sporting a coach making too much money relative to revenues (in case you are wondering: this is all of them).

The money goes somewhere. It doesn't go to more rowers. It goes to the literal and metaphorical scaffolding around the athletes, and being in Michigan Stadium these days looking up at luxury boxes and down at Denard Robinson kind of makes me think this Oliver Twist point is in the past, at least for me.

So what now, smart guy?

I'm not actually sure. I do know that guys like Andrew Zimbalist who advocate the reduction of scholarship limits are precisely wrong about the problem. The outlay to keep a  football player around is the only thing that has remained relatively constant over the course of the Knight Commission's infinite complaints about costs. They've gone up by the cost of tuition. Coaching salaries have gone up by multiples.

The fact that anyone's even talking about making cuts to the sole redeeming bit of the whole enterprise speaks to just how badly the system is messed up. Revenue sports are disproportionately populated by black males,** many of whom wouldn't have a shot at college otherwise. Cutting them so you can keep paying the people around them in gold bullion is an idea only an academic economist could come up with.

The opposite would be better. Hockey has 18 scholarships, three short of fielding a full team. Baseball has some weird number like 11.7. Many athletes make do with partial or no scholarships in equivalency sports. The NCAA should significantly raise those restrictions. Small schools will complain about unbalancing the playing field and blah blah but we are talking about putting kids on scholarship, not autobids. An unbalanced playing field because one school has offered to pay for more tuition than the other is justified. It's beyond justified.

As for the guys making the actual money, I'm not that peeved about basketball since 99% of the exploited are good enough to go on to pro careers here or in Europe and anyone good enough can just screw off after a year or two. It's in football and its brain damage and other damage and low chance of a reasonable minor league career and low chance of an NFL career longer than three years that the moral compass gets a little confused. It's hard to look at 110,000 people paying close to 100 bucks a head and look down at Martavious Odoms and think he's not getting a raw deal.

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*[Numbers come from the USA Today database. Unfortunately, it doesn't produce permalinks. VCU's specific case highlights the stupidity of the OTL piece on athletic departments making a "profit". The Rams are 600k in the red even with 12.4 million in student support. They are nowhere close to self-sustaining.]

**[45% in football and 60% in basketball this year; in all D-I sports white guys are 63% of the population; 77% of women playing sports are white; 57% of the undergrads are women.]

Comments

Ann Arbor Cardinal

April 2nd, 2011 at 12:01 AM ^

It seems like we're still operating under an athletic system designed for rich white dudes at Yale and Brown who gathered on the pitch to prove that they were well-rounded. Not that future professional athletes don't work hard in school, but for some, it's just an unnecessary distraction. Is the world a better place because Andy Katzenmoyer endured classes long enough to be ready for the NFL? I don't want to say his grades are a sham, but his time probably would have been better spent doing something else. Sports and academics are kind of an odd combination. It would be like saying you couldn't play serious poker or serious Nintendo or serious Dungeons and Dragons unless you were also taking at least 12 credits; why do we require someone who is 19 years old and wants to play football at a serious level to also be enrolled at an appropriate school?

Michigan4Life

April 1st, 2011 at 8:55 PM ^

or have NCAA lift the restrictions on sponsorship.  The Olympics were able to co-exist with professionals while the majority of athletes are amateurs because they allow them to have sponsors to finance the trip/equipment/training/etc.  NCAA should let them have sponsors which is why ruling Jeremy Bloom ineligible from playing football for Colorado makes no sense since his sponsorships are derived for mogul skiing.  By the same token, they let players who were a former pro baseball players, like Chris Weinke, play college ball(they got paid to play baseball).  How does that make any sense to let a player like Weinke play college ball while ruling a player like Bloom ineligible?

MaizeAndBlueWahoo

April 1st, 2011 at 10:37 PM ^

Title IX is the world's biggest barrier to paying players anything at all.  If we go by the hypothesis that "players should be paid because of the value they bring to the school" then football players will get the lion's share of that money and women will get none of it. But every extra dollar you spend on football players has to be matched on women's programs - and then some since women are usually the majority on campus.

Seth

April 2nd, 2011 at 3:00 AM ^

The Odoms point is prescient. I cant argue very well against that.

from a simply pragmatic view the NCAA has drawn the (arbitrary?) line at paying players to play and the opposite line at scholarships. So within that framework I re-recommend a system where specific additional revenue streams are tied to funding graduate scholarships for scholar athletes. Sell EA Sports the rights to player names and likenesses. Create a playoff for football. Whatever. The concept remains that new revenue sources are tied to a fund to send athletes of any gender or sport to grad school. It doesn't make it fair exactly if a softball 3rd basewoman with excellent math skills gets to benefit from further exploitation of Odoms's ability to catch footballs. But at least it caps the profit maximization incentive for a nominally non-profit org, and creates a meritocratus system for rewarding athletes with more education.

909Dewey

April 2nd, 2011 at 9:32 AM ^

Athletes and their schools actually have a somewhat level trade - the student gets a "free" ride and the school gets "free" talent. The value of each side of the barter can be questioned, but the barter exists and is not coerced. Where the barter breaks down is the postseason at the third party level - the NCAA itself, the bowl commissions, the stadiums, all the ancilliary stuff - how are those finances garnered? Did the bowls barter anythig to the players for the free talent that fills the seats? The networks give money to these other parties, the networks get money from ads, the ads exist because the players fill the seats for free. This is where student athletes should be compensated - for their funding the bowls. This would solve the Title IX problem since it wouldn't be the schools on the hook. That being said the schools should give all scholarship players some kind of small stipend.

Swayze Howell Sheen

April 2nd, 2011 at 3:28 PM ^

some problems don't have simple solutions.

if you really want to clean the system up, get rid of college athletics.

what is the real justification for them anyhow? the universities of

the world now run minor-league athletic sub-branches, mostly for

PR purposes, keeping rich alumni happy that their school is 

"doing well" in a clearly demonstrable fashion (i.e., it's much harder

and far less entertaining to have a really good chemical engineering

department). 

am i advocating this? not really - i certainly love michigan football,

basketball, and maybe even hockey. but does anyone really expect

a minor-league sporting system within a university to make any sense?

 

m1jjb00

April 3rd, 2011 at 3:37 PM ^

It seems to me that if the basis of the argument relies on expolitation and fairness, then the only "fair" solution is a complete open market.  As Zone left indicates, what we're talking about is rearranging monopoly rents.

But, under a free market, is there any doubt that the T Pryor's of the world would be showered with benefits, leaving the second-string linemen (or the Jayson Whitlocks of the world) with just partial scholarships at best?  So, who is Whitlock trying to protect?  How are these secondary guys, who arguably are "paid" better than they would under a free market, exploited?  Would a free market be better?

Now as a beneficient dictator can I think of a better way to split up the rents than those done now, in particular, perhaps giving less to star coaches?  Sure, though I can't think of a mechanism to do it that doesn't seem to arbitrary and intrusive.