Earlier this fall, Michigan State University administrators begged their faculty, staff, and graduate students to volunteer to work in the campus’s dining halls, because of a severe shortage of regular workers.
A basic principle of economics is that you can retain workers who might otherwise be inclined to seek alternate employment by improving the terms of their compensation.
Michigan State’s administration had no difficulty applying that principle to its head football coach, Mel Tucker, who last month received a 10-year, $95-million, fully guaranteed contract extension. Even if MSU should at some point wish to part ways with Coach Tucker because he was no longer winning enough games, it would still owe him the remainder of his contract.
An almost identical scenario is playing out in Baton Rouge, where Louisiana State’s administration just hired Brian Kelly away from Notre Dame for an almost identical 10-year, $95-million contract (not including performance incentives). LSU has been under severe financial strain in recent years, as the state’s budget crisis has led to recurrent cuts in its flagship university’s budget.
To get some sense of how radically the economic structure of big-time college athletics has shifted, look back at a New York Times story from January 1982 reporting that Jackie Sherrill had just signed on as Texas A&M’s new football coach for the then-shocking sum of $280,000 per year. “According to the best estimates of several officials with a broad knowledge of higher-education matters,” the article notes, “no other person has ever received so much pay from an American university.”
That was almost certainly the case. A broad-based study of the compensation of college and university presidents at that time found a mean compensation of $63,501, with no president making more than $118,000. Meanwhile, Sherrill’s new salary nearly doubled the highest pay any college football coach had received to that point.
The Consumer Price Index has nearly tripled over the past 40 years, so naturally we must adjust such figures for inflation. In real, inflation-adjusted dollars, the contracts signed by Tucker and Kelly are nearly 20 times as large as Sherrill’s six-year deal for $1.7 million, which at the time sent shock waves through American higher education.
Even more striking: There are now significant numbers of administrators in America’s colleges and universities who are being paid, in real dollars, more than the highest-paid university president was receiving when I was an undergraduate, in the early 1980s — in quite a few cases, many multiples more.
Those two facts are not independent of each other. The grotesque explosion in pay for college football and men’s basketball coaches is a product of the same social forces that have resulted in some university administrators’ being paid millions of dollars per year, a rate of compensation that would have been inconceivable a generation ago, even adjusting for inflation.
And the outrageous athletics salaries can even seem to justify the administrative overpay. By a kind of perverse psychological effect, paying a college football coach $10 million per year makes paying a university president $1.5 million, a provost $800,000, and various vice provosts and vice chancellors $500,000 each seem positively parsimonious by comparison.
The capture of collegiate athletics — and of American higher education in general — by the most rapacious forms of contemporary capitalism is reflected by the extent to which making as much money as fast as possible has become the largely unquestioned goal of institutions that were created for quite different purposes. (My alma mater — the University of Michigan at Ann Arbor — provides a particularly startling illustration of those trends. The university’s endowment is now nearly 150 times as large as it was when I graduated, in 1982.)
That these institutions nevertheless continue to operate as tax-exempt charitable enterprises, while paying the athletes and contingent faculty members who generate the revenue that funds those enormous salaries little or nothing, is increasingly indefensible.
