Saturday, December 12, 2009
Resources Tend to their Most Valued Use - The Notre Dame/Cincy Version
In his tenure, the once mighty Golden Domers went 35-27, a 0.564 WPCT clip, and took them to two BCS bowls. That would be an acceptable 5-ear run for many programs, but not for the Fighting Irish. While Weis took the Irish to the 2006 Fiesta Bowl and the 2007 Sugar Bowl, they were unceremoniously dumped by Ohio State and LSU respectively.
The fact that ND made two BCS bowls in his five years is less impressive given that the BCS is required to automatically take Notre Dame if it gets a top 8 ranking in the BCS ordering. No other school gets that treatment. In fact, the schools in the small market conferences are subject to this little gem:
4. No more than one such team from Conference USA, the Mid-American Conference, the Mountain West Conference, the Sun Belt Conference, and the Western Athletic Conference shall earn an automatic berth in any year.Call it grade inflation for the wealthy.
What's particularly grating to much of Irish Nation is that Weis did not take ND within sniffing distance of the BCS title game in his five years at the helm.
So ND went out and hired Brian Kelly from the University of Cincinnati much to the chagrin of his players. Kelly's Bearcats have won the Big East conference each of the last two years and this year has led the Bearcats to a 12-0 record and the Sugar Bowl, a BCS game.
But Cincy, in the FBS world, is a small market school. In 2007-08, Notre Dame's entire athletic department, mostly funded by football, generated over $83 million in revenues. Cincinnati generated "only" $34 million (source). Notre Dame Stadium has a capacity of over 80,000. Cincy's football stadium seats a little over 35,000. Conferences need Notre Dame more than Notre Dame needs a conference. The same probably can be said of the NCAA in addition to the conferences.
In case you need any more convincing that there is more fan interest in ND football than there is in Cincy football, check out their respective Wikipedia entries (ND here and Cincy here). One has a lot. The other does not.
In Major League Baseball, we often hear about how the rich clubs "gobble up all" the talent and the small market teams amount to little more than feeder clubs for the big, bad teams like the Yankees. But keep in mind the economic mantra:
resources tend to their most-valued use.
It's no different in the (supposed) amateur world of college football. Look at the coaches of this year's BCS title game. Nick Saban started his head coaching career at Toledo in 1990, moved on to Michigan State, and then to LSU. After a stint in the NFL, he returned to collegiate football to coach Alabama, one of the plum FBS jobs and a place where he's got the Tide rolling again.
Similarly, coach Mack Brown of the Texas Longhorns. He started his head coaching career at Appalachain State, then moved up the FBS ladder to Tulane, then to North Carolina, and now is at Texas where he has one national championship and is gearing for a chance at another.
It's the same all over college sports. Gary Pinkel of Mizzou started at Toledo. Mike Anderson, the basketball coach at Mizzou, started at the University of Alabama-Birmingham, Bill Self of the Kansas Jayhawks basketball program started at Tulsa before moving on to Illinois and then to KU.
Resources tend to move to their most-valued use.
So Notre Dame, with its national following, its once-proud-but-still-living tradition, its own television contract, its local population base, and the fact that it is affiliated with no football conference (i.e. it does not have to share its revenue), has hired Brian Kelly away from small-market Cincinnati. Will this hire work out in terms of what Notre Dame fans demand? That remains to be seen.
But what we are witnessing is something noted by all economists from the time of Adam Smith: resources tend to move to their most-valued use. It is this time of year in college football (and baseball, for that matter), that we see the labor market for coaches bear this out.
Sunday, November 22, 2009
I'll Have What He's Having: Curious Contract Provisions in the NCAA
Perhaps Neil Cornrich, who represents embattled Kansas football coach Mark Mangino, should be mentioned in the same breath as Mr. Boras in terms of uber-valuable sports agents.
If the Kansas athletic department’s investigation into KU coach Mark Mangino’s treatment of players results in the school firing Mangino for cause, that decision could spark a battle for more than $6 million, according to Mangino’s contract.Mangino would be given a 21-day window after his firing to submit a written appeal of his termination to either KU chancellor Bernadette Gray-Little or athletic director Lew Perkins. The appeal would be reviewed by a three-person committee appointed by Gray-Little, comprised of faculty or professional staff employees, one selected by Gray-Little, one selected by Mangino and one agreed upon by both parties. Mangino would have the right to attend committee meetings and have legal counsel.
Two of the three committee members would have to rule in favor of the school to uphold the termination for cause. In that case, Mangino would be paid only what he is owed through the date of termination. But if the committee ruled in favor of Mangino, turning the termination for cause into a termination without cause, Mangino would be owed $6.6 million — the remainder of his contract ($2 million per year for three years plus a buyout in the range of $600,000). KU would also have the option of reinstating Mangino as coach.
The following brought forth my inner Spock when it caused me to raise an eyebrow:
Mangino would be given a 21-day window after his firing to submit a written appeal of his termination to either KU chancellor Bernadette Gray-Little or athletic director Lew Perkins. The appeal would be reviewed by a three-person committee appointed by Gray-Little, comprised of faculty or professional staff employees, one selected by Gray-Little, one selected by Mangino and one agreed upon by both parties. Mangino would have the right to attend committee meetings and have legal counsel.
Two of the three committee members would have to rule in favor of the school to uphold the termination for cause. In that case, Mangino would be paid only what he is owed through the date of termination. But if the committee ruled in favor of Mangino, turning the termination for cause into a termination without cause, Mangino would be owed $6.6 million — the remainder of his contract ($2 million per year for three years plus a buyout in the range of $600,000). KU would also have the option of reinstating Mangino as coach.
You could argue that Self is such a good coach, so confident in his ability, and such a known commodity that the value of extra-protective language is negligible to Self.
Yet the article ends by noting that another one of Cornrich's clients is former Kansas State University football coach Ron Prince, he of the super-secret $3.2 million in deferred payments, something that rightly rankles much of Wildcat Nation.
Once again, as with Mangino, Prince may have had more value from such an agreement than a coach of Self's stature. But bargaining is a two-way street. It takes two to tango. Pick your cliche. Any language has to be mutually agreeable to both sides to appear in a final contract.
Kansas State, when it gave Prince his extension, knew that he was a new coach and hadn't exactly been tearing up the North Division of the Big XII. Likewise, Kansas was well-aware that Mangino's reputation was not one of a jolly old elf.
Considering that Prince was fired shortly after signing a contract extension and that Mangino also recently signed his own extension, what in the blue blazes is going on with coach negotiations in northeastern Kansas FBS athletics?
Labels: bargaining, college sports, NCAA; college sports; football; coaching salaries
Saturday, December 06, 2008
Who Pays the College Coach
Mark Yost has an article on the pay of college coaches in this morning's Wall Street Journal, including a quote from yours truly written here at this blog awhile back.
Academic types have long lamented that coaches at many public universities make millions more than their schools' professors and presidents, not to mention the governors of their states. That much is true. Mr. Saban's eight-year contract will pay him $4 million a year -- $5 million if he earns all his performance bonuses. That dwarfs the salary paid to Alabama President Robert Witt ($611,000) and Gov. Bob Riley ($105,000).
But there are two fundamental problems with comparing teaching and coaching salaries. The first is simple supply and demand. With all due respect to the many great teachers, it's easier to replace them than Mr. Saban, Ohio State's Jim Tressel or Penn State's Joe Paterno (who makes a paltry $500,000 a year).
"The talent that Saban, Tressel and other coaches have is relatively scarce," Phil Miller, an assistant professor of economics at Minnesota State University, Mankato, wrote on The Sports Economist blog. "On the other hand, the talent it takes to teach effectively, for example, at the collegiate level is more abundant. So the price of coaching talent is much higher than the salary obtained by most professors." Or, as legendary Ohio State football coach Woody Hayes once told an antisports prof: "I can do your job, but you can't do mine."
I'm actually an associate professor, but we'll let that one slide ;-)
Here's the post to which Mark is referring.
