Thursday, 22 May 2014

Graph of the week: "Academic" salaries

Well this is interesting:
Source
It seems the best job you can get at a University is that of a football coach. Not only do you massively outperform the tenured professors, but you also outperform the deans and the university president.

How can this be? Is this fair? Is it fair for a football coach to get a higher salary than highly-respected academics and even their own bosses? Yes, it is.

It's all about supply and demand. Fairness has nothing to do with it.

There is a lack of supply of high quality coaches (and high quality players in general, in any sport). If one wants a good result which is usually accompanied by a large amount of money flowing in to the winning team (e.g. in terms of sponsorship deals) then one needs to pay the price for such quality. In college sports the players are cheap - they're students after all so they get scholarships, but that's why a coach must be expensive. 

A football coach with a good performing team brings in a lot of revenue to the University. I was actually surprised to see how much (see the link) - there's a lot of money moving around in college sports. It's a business. Sporting facilities are top quality (better than most professional clubs in Europe for example), every game is packed with fans, while tickets are not cheep. The salary that get's paid to the coach is actually only a minor expense the Universities give out to sports. 

Here's a list from Forbes of the top 25 revenues and expenses in just college football by University.

Total Football ExpensesTotal Football Revenue
Alabama$36,918,963$81,993,762
Ohio State$34,026,871$58,112,270
Oregon$20,240,213$51,921,731
Stanford$18,738,731$25,564,646
Georgia$22,710,140$74,989,418
Texas A&M$17,929,882$44,420,762
South Carolina$22,063,216$48,065,096
Clemson$23,652,472$39,207,780
Louisville$18,769,539$23,756,955
Florida$23,045,846$74,117,435
Notre Dame$25,757,968$68,986,659
Florida State$22,052,228$34,484,786
LSU$24,049,282$68,804,309
Oklahoma State$26,238,172$41,138,312
Texas$25,896,203$103,813,684
Oklahoma$24,097,643$59,630,425
Michigan$23,640,337$85,209,247
Nebraska$18,649,947$55,063,437
Boise State$8,537,612$15,345,308
TCU$25,984,011$25,984,011
UCLA$19,193,346$25,168,004
Northwestern$20,148,403$27,547,684
Wisconsin$24,231,297$48,416,449
USC$23,123,733$34,410,822
Oregon State$11,903,213
$20,666,946

For each University listed, money invested in college football pays back substantially. Texas for example gets a fourfold return for every dollar spent on college football. That's a good investment. And this is how one justifies such large salaries of football coaches, which are however still lower compared to professional football salaries in the US. But that's a different story. 

2 comments:

  1. Although I agree with your supply/demand argument, I want to stress another point of view; why sports are paying of so much? Because people are mediocre and like to sit and watch them instead of contributing to society, it's because of people demand that so much money is in the sports and movie industries. But then the same people should stop complaining that there is not yet a cure for cancer (cancers actually) or why there is no interstellar travel, or colony on Mars. It's because people don't want it, or better, don't want it hard enough. Back to the point, people get outraged when they see such charts because they think that most money should go to science and development that translates later in a bigger good for everyone rather than to muscled thugs :) but at the same time they fail to see that it's their average mass IQ that keeps such salaries high.

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    1. I agree, excellent point. In the end it's all about demand and incentives

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