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Jaw-Dropping Compensation: College Professors vs. College Football Coaches

14 points by nickb 19y ago

streblo 19y ago
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.
- jimbokun 19y ago
  Did you get to the end of the article? The author was employing sarcasm. So you are really in agreement with the author.
- yters 19y ago
  Why are athletics so important? I think they just help colleges attract money, no real intrinsic value.
  - daniel-cussen 19y ago
    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.
Tichy 19y ago
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.
- davidw 19y ago
  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=10218000 http://www.economist.com/business/displaystory.cfm?story_id=...
  - jimbokun 19y ago
    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.
    - davidw 19y ago
      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.
      - dpapathanasiou 19y ago
        Well, this Economist story explains why executive pay is unlikely to decline: http://www.economist.com/business/displaystory.cfm?story_id=10010852 http://www.economist.com/business/displaystory.cfm?story_id=...
ojbyrne 19y ago
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.
- jimbokun 19y ago
  If the average university has more than 10 professors, they are paying more in wages to professors than head football coaches. And if you figure the total amount paid in tuition in a year across the country, I'm guessing that will be a much larger number than the amount spent on tickets and television rights and merchandising for college football. So, I disagree that professors are a cost center for a university and that, as a society, we invest more overall in head football coaches than in educators.
- sethg 19y ago
  What proportion of football-related revenue subsidizes a university's academic department, and what proportion is just plowed back into the football program?
  - mattmaroon 19y ago
    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.
    - DocSavage 19y ago
      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.
breily 19y ago
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?
mynameishere 19y ago
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.
- mattmaroon 19y ago
  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.
  - mynameishere 19y ago
    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 http://en.wikipedia.org/wiki/XFL
    - koolmoe 19y ago
      The XFL had a lot of problems, but very few were related to the business structure. The biggest problem was that the best players in the world weren't playing in the XFL. Div I-A college football doesn't have that problem. The lower divisions do, though. I doubt many Div I-AA or Div II coaches are making $1MM.
    - mattmaroon 19y ago
      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.
koolmoe 19y ago
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.
cellis 19y ago
Before you comment on the "jaw-dropping compensation", Please read this: http://www.businessweek.com/magazine/content/07_50/b4062038784589.htm?campaign_id=rss_daily http://www.businessweek.com/magazine/content/07_50/b40620387... "...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 19y ago
  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.

14 points by nickb 19y ago

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.

jimbokun 19y ago
Did you get to the end of the article? The author was employing sarcasm. So you are really in agreement with the author.
yters 19y ago
Why are athletics so important? I think they just help colleges attract money, no real intrinsic value.
- daniel-cussen 19y ago
  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.

Tichy 19y ago

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.

davidw 19y ago
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=10218000 http://www.economist.com/business/displaystory.cfm?story_id=...
- jimbokun 19y ago
  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.
  - davidw 19y ago
    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.
    - dpapathanasiou 19y ago
      Well, this Economist story explains why executive pay is unlikely to decline: http://www.economist.com/business/displaystory.cfm?story_id=10010852 http://www.economist.com/business/displaystory.cfm?story_id=...

ojbyrne 19y ago

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.

jimbokun 19y ago
If the average university has more than 10 professors, they are paying more in wages to professors than head football coaches. And if you figure the total amount paid in tuition in a year across the country, I'm guessing that will be a much larger number than the amount spent on tickets and television rights and merchandising for college football. So, I disagree that professors are a cost center for a university and that, as a society, we invest more overall in head football coaches than in educators.
sethg 19y ago
What proportion of football-related revenue subsidizes a university's academic department, and what proportion is just plowed back into the football program?
- mattmaroon 19y ago
  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.
  - DocSavage 19y ago
    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.

breily 19y ago

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?

mynameishere 19y ago

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.

mattmaroon 19y ago
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.
- mynameishere 19y ago
  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 http://en.wikipedia.org/wiki/XFL
  - koolmoe 19y ago
    The XFL had a lot of problems, but very few were related to the business structure. The biggest problem was that the best players in the world weren't playing in the XFL. Div I-A college football doesn't have that problem. The lower divisions do, though. I doubt many Div I-AA or Div II coaches are making $1MM.
  - mattmaroon 19y ago
    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.

koolmoe 19y ago

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.

cellis 19y ago

Before you comment on the "jaw-dropping compensation", Please read this: http://www.businessweek.com/magazine/content/07_50/b4062038784589.htm?campaign_id=rss_daily http://www.businessweek.com/magazine/content/07_50/b40620387... "...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 19y ago
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.