
Jaw-Dropping Compensation: College Professors vs. College Football Coaches - nickb
http://mjperry.blogspot.com/2007/12/jaw-dropping-compensation-college.html?sid13
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streblo
I'm not surprised, and I disagree with the writer that these levels of
compensation are unfair. I think that a good university is one that promotes
several spheres of self improvement - academic, athletic, artistic, and the
like. As a university student myself, I would be disappointed with my school
if it shunned athletics as a lesser endeavor. If a university can promote
great academics while also fielding a winning football team, that shows real
accomplishment.

A large university might have several hundred professors, but it only has one
head football coach. Even if you consider a coaching staff (none of which
individually make as much as the head coach), you're only talking about a
dozen or two individuals at most. However, a university gains a lot more
notoriety by having a winning football team than it does by having a well
published professor. If you were in charge, who would you pay more? Don't
answer before considering all the alumni that you have to keep happy if you
want to keep your job.

Edit: Also consider that once a professor is tenured, it takes a lot for
him/her to mess up and get fired. However, as soon as a football coach has a
losing season, his future employment is up for reconsideration. The bigger
paycheck also means a lot less job security.

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yters
Why are athletics so important? I think they just help colleges attract money,
no real intrinsic value.

~~~
daniel-cussen
So true. The alumni that keep colleges alive are pretty generous after winning
seasons.

It's also interesting to me how this trickles down to high schoolers. Tons of
kids do athletics in high school because it will get them into college (or
maybe the NFL) but for the most part people are no longer into it once they
are in college.

Most college freshman I know are pretty much done impressing people with
athletics. It might get them laid or something, but it has little value beyond
staying healthy, doing teamwork, etc. Not that that's bad, but Goldman Sachs
doesn't really hire based on athletics.

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cellis
Before you comment on the "jaw-dropping compensation", Please read this:

[http://www.businessweek.com/magazine/content/07_50/b40620387...](http://www.businessweek.com/magazine/content/07_50/b4062038784589.htm?campaign_id=rss_daily)

"...but says that the going annual rate today for theoreticians of his caliber
is $400,000 to $600,000, which includes salary and research support. This is
for an assistant professor, the level at which Yale does most of its hiring.
The price tag for top experimentalists, who have far more extensive laboratory
needs, is $1.5 million to $2 million, according to Shankar, who remains on the
Yale faculty."

So there you go. Its all about talent!

~~~
theorique
It may be all about talent, but that cool half-mil is not all salary.

A large percentage of that money goes to funding for a couple of grad students
and postdocs, equipment and supplies (a theoretician still needs fast
computers) travel expenses to conferences to present those world-class papers,
and so forth. Probably no more than $100-150K of that represents salary for
the professor.

Also, is that money _start-up_ funding (a lump sum) or annual support? It's
not clear the way it's written, but a top researcher would most likely be
expected to secure solid external support from government (National Science
Foundation, DARPA, etc), corporate, and other funding sources within a year or
so.

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ojbyrne
Forget notoriety. University football generates a ton of money, and since we
live in a capitalist society, the people in profit centers tend to get paid a
lot than people in cost centers.

~~~
sethg
What proportion of football-related revenue subsidizes a university's academic
department, and what proportion is just plowed back into the football program?

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mattmaroon
I don't know, but I guarantee Ohio State makes hundreds of millions and pays
Jim Tressel one or two.

The article left out an interesting factoid, which is that many of them are
the highest paid state employees in their state.

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DocSavage
From the USA Today article I linked above: "At Texas, for example, the return
on the sizable investment in Brown is a pre-eminent football program that last
season won the school's first football national championship in 35 years and
accounted for 62% of all the Longhorns' athletics revenues, turning a $42
million profit. Football essentially underwrote 17 other sports at the school
that don't make money -- all but men's basketball and baseball."

I'm not sure if the profit takes into account university merchandise.
Powerhouse football programs sell lots and lots of university clothing, and
the universities make money off the licensing.

~~~
mattmaroon
That would certainly seem to justify coach salaries.

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mynameishere
_market forces also determine CEO salaries_

Not really. A theoretical market requires unlimited buyers and sellers
bidding. A company like the NYSE does a good job simulating one, but once you
get to the back-slapping/rubber-stamping/cult of personality world of board
room politics, the market-in-theory no longer exists.

For comparison, I tried researching minor league baseball coach salaries
(which would more closely reflect the market) but came up dry. I'm guessing
100K tops, and probably less. The prices relating to college football are
propped up just by being officially part of college and the environment.

I don't remember a single person talking about minor league baseball during
college, and the same would have been true of football if its professional
proving-grounds were the minor leagues rather than universities. Too bad.

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mattmaroon
That's absurd. I'd be willing to wager big school football makes orders of
magnitude more than minor league baseball, hence the coaches do as well.

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mynameishere
I'd be willing to wager that football, set up like minor league baseball,
would make roughly the same as minor league baseball, or worse:

<http://en.wikipedia.org/wiki/XFL>

~~~
mattmaroon
That doesn't make any sense at all.

College football programs rake in huge money, and therefore the people
responsible for their success do too, whereas minor league baseball teams do
not, and therefore their coaches don't.

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lg
They rake in huge revenue, but most programs are in the red. Former UMich
president James Duderstadt wrote a book (Intercollegiate Athletics and the
American University) where he claimed that the reported profits for most
college football teams are bs, and in several supposedly-profitable Rose Bowl
seasons, the Wolverines lost millions. Mostly the teams get so much $$ based
on perceived (yet statistically negligible) alumni donation increases based on
a team's success.

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Tichy
I'd like to see the numbers that prove that the stars/CEOs/whatever are not
worth their money. Like, take two identical companies, but have a CEO run one
and a random guy from the street run the other, and show that they both are
equally successful?

Isn't the typical CEO salary being decided on by the vote of the shareholders?
Why would they vote for paying so much, if it wasn't worth it?

I remember reading an article by Greenspun who says that the CEOs rip off the
shareholders, though. Just not sure how they pull it off.

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davidw
Well, it's not really the shareholders who vote on it, it's the board's
compensation committee, if I'm not mistaken. The shareholders do vote on the
board's composition... but even that is subject to some control by the
company:

[http://www.economist.com/business/displaystory.cfm?story_id=...](http://www.economist.com/business/displaystory.cfm?story_id=10218000)

~~~
jimbokun
And the board's compensation committee is mainly executives from other
companies, who want the executives on their board to also vote them a large
pay raise...

It is simple collusion among the executive class, insulated from market
forces, that determines executive compensation today. Shareholders are largely
cut out of the loop.

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davidw
I wouldn't go quite that far, but the folks at The Economist have made a good
case that a few tweaks to the system wouldn't hurt.

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dpapathanasiou
Well, _this_ Economist story explains why executive pay is unlikely to
decline:
[http://www.economist.com/business/displaystory.cfm?story_id=...](http://www.economist.com/business/displaystory.cfm?story_id=10010852)

~~~
davidw
They seem to go back and forth, don't they?:-)

[http://www.economist.com/business/displaystory.cfm?story_id=...](http://www.economist.com/business/displaystory.cfm?story_id=9895518)

I certainly wouldn't favor any broad laws meddling in that kind of thing, but
a tweak here and there to open things up to shareholders probably wouldn't
hurt.

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koolmoe
I think the big difference between CEO's and football coaches is that the
coaches' products are more easily subject to scrutiny.

The average joe can watch weekly football games and judge for himself whether
a team looks disciplined and prepared.

CEO performance is documented in complex financial reports released once a
quarter. The reports aren't as readily available as nationally televised
football games, and the connection to the CEO's contributions isn't as
immediately obvious. Also, recent history is replete with incidents where the
bottom unexpectedly dropped out of a company because of unbeknownst-to-the-
public mistakes or transgressions committed under the CEO's watch.

I think public perception about the differences in transparency is what drives
distrust in CEO's but not in college coaches.

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breily
This is slightly offtopic, but why in the world do developers make their sites
resize my browser window? Not the blog post, but the USA Today coach salary
database- is there a legitimate reason for this or do they just enjoy pissing
off users?

