The Rich Get Richer

Posted by Deepish Thinker on August 04, 2009
Economics, Football, US Culture

Sports Illustrated columnist Andy Staples is very concerned that a down economy plus a trend towards big revenue TV deals for the major conferences means that the ‘haves’ in college sports will be increasing their edge over the ‘have nots’.

On Monday, Florida coach Urban Meyer agreed to a six-year contract that will pay him $4 million a year. Earlier this year, the Alabama state university system’s trustees approved earlier a $80.6 million project that will expand Alabama’s Bryant-Denny Stadium to accommodate more than 101,000 fans. Meanwhile, on the other end of the Football Bowl Subdivision food chain, Hawaii athletic director Jim Donovan last week took a voluntary seven percent pay cut to help offset a projected $2.6 million deficit for the 2008-09 fiscal year.

I’m actually a little skeptical of this argument.  College football royalty like Florida already get the best coaches, the best facilities and (most importantly) its choice of the best players.  So it is far from certain that an increased budget will generate any better results.  Will Urban Meyer be a better football coach because his salary went up by $750K per year?

Like most human endeavors, college football is subject to diminishing returns.  Beyond a certain point adding resources to a football program like Florida’s is really just padding costs.  Where the increasing big school revenue advantage is likely to pay off is the non-revenue sports.  The excess revenue generated by the football and basketball programs can buy those big money schools a lot of wins in soccer, tennis, track and swimming.