NCAA News Archive - 2002

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'Economic rent' drives budget upward


Mar 18, 2002 12:15:50 PM


The NCAA News

 

The NCAA's new television contract in some ways puts institutions in a difficult position when it comes to the so-called "arms race." Since member conferences and institutions will be receiving a much greater distribution from the contract, it will be up to them to devote those dollars where they will have the most impact on student-athletes.

 

But will those dollars funnel into student-athlete benefits or to facility growth and coaches' salaries?

 

Washington State University President V. Lane Rawlins said the "unevenness" of revenue, particularly among competitive Division I schools, has made it highly desirable to have a winning program. In other words, many believe that winning produces more revenue.

 

"And a winning program depends largely on the coach," Rawlins said.

That's where the trouble starts, he said.

"There's a concept called economic rent," Rawlins said, "which is that amount you get for being in that highest-paid occupation that is above what you would get in any other role.

 

"It's like being a movie star. You get paid because you're Steve Spurrier, Bobby Bowden or Rick Neuheisel. Now they are all great guys, but what would they be worth if they weren't football coaches?"

 

What can be done about it? According to Rawlins, perhaps not much.

 

"All of the talk about presidents reining in the arms race is whistling in the wind," he said. "No individual president can afford to do that, and we are not allowed to collaborate in doing that, either (because of antitrust implications).

"The reality is that some coaches have a very strong market position, and because of that an inordinate portion of the total revenue we're bringing in to athletics is going to coaches.

 

"Our coaches have become the Michael Jordans of college athletics."


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