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Comment by teej | Hacker News Reader

An employee with specialized skills who runs a profit center in an organization makes the most money? Color me surprised.

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And yet the specialized employees people really pay to watch make nothing at all.

I can't imagine this lasts much longer -- it's such a charade to begin with that eventually there will have to be a major shift in how college athletics are handled.

http://www.nytimes.com/2012/01/01/magazine/lets-start-paying...

I agree that the disparity is a serious problem. However, I reject the notion that the solution is to pay the athletes. The fundamental problem is the intertwining of a business and an academic pursuit; colleges should not be in the business of sports, and the sports they have should be about amateur competition rather than fundraising or prepping athletes for the NBA, or the NFL, etc.

The solution is to divorce academic institutions from the sports business.

The solution is to get rid of ridiculous requirements that certain pro leagues (NFL, NBA) have mandating certain years of college experience.

This deprives no one their ability to make money & also gives student athletes the ability to either get an education or hone their skills.

Most of these high paid coaches and rules violations involve football and basketball anyway...

What will be fascinating is to watch what happens with youth sports once they start paying college athletes. It will no longer be about little Johnny getting a college scholarship to play for Note Dame, it will be about real money. Can't wait to see what the sidelines sound like at your local youth sporting event.

I don't get this line of reasoning. Colleges will never be able to pay what pro teams do. They will never be able to afford to pay every athlete on every team. Certain colleges will always be able to pay more than others. This won't change anything. If anything, it will exacerbate the problem.

The "real" money will always be in the pros. Get the kids to the pros quicker, if they want.

I wouldn't consider full ride scholarships, personal tutors and assistants, as well as what ever kick backs they can get under the table from boosters and alums "nothing at all".

But there's essentially a modest salary cap. Whether you just made the cut for a scholarship or you're in the Heisman race and are responsible for a huge boost in ticket sales, you get ~$70k, which must be redeemed in the form of tuition, college room and board, tutoring, etc. You can try to supplement with under the table money, but it will still be pretty modest (like 10k max?).

On the other hand, coaches get to demand pay that is somewhat linked to the value they provide to the school, and they don't even have to risk career-ending and life-changing injuries (and incur almost certain subtle brain damage) in the process.

Oh, and as is common in our society, the people with the high-paid, safe job are mostly white, and there are many people of color in the exploited job (especially in the sports that make real money). Oh, and they're basically all men.

As we've seen from scandals at universities around the country, players don't actually get much of an education. How could they when they have to devote so much time to proper diet, practice, and then the games themselves?

Profit centers, eh? http://seattletimes.com/html/collegesports/2010103078_ncaa21...

From your link:

Of the 119 FBS football teams, 68 (57.1 percent) finished the year in the black.

Of the 119 FBS schools playing men's basketball, 67 teams made a profit. One of those same 119 schools made money in women's basketball in 2008.

FBS football teams recorded a median net profit of $1.95 million. Men's basketball at the same schools produced a median profit of $518,000. No other sport at the FBS schools, measured by median values, showed a program in the black.

so yeah, profit centers.

The facility cost is shifted to university's balance sheet. Most calculations assume that the cost of building and maintaining a stadium and supporting infrastructure is zero.

I'm going to sound like an economist that refuses to pick up a $20 bill (if it's real, somebody else would've picked it up), but there's, for example, profit opportunity in on-campus food catering. So a bunch of private contractors sign up with university to operate their own facility, hire their own staff, and give the university a cut of the earnings or licensing fee.

Why has no for-profit corporation stepped up to build up a stadium, hire coaches and players, license the university name and then enjoy the profits?

An athletic program in isolation may not be profitable, but I think most schools view it as an important way to keep alumni involved and believe the increase in alumni donations more than offsets any loss they may take in athletics.

The facility cost is shifted to university's balance sheet. Most calculations assume that the cost of building and maintaining a stadium and supporting infrastructure is zero.

Do you have a source on that? I couldn't figure out a way to research it myself, but it seems illogical that the cost of financing the facilities would not hit he P&L of the athletics association.

Why has no for-profit corporation stepped up to build up a stadium, hire coaches and players, license the university name and then enjoy the profits?

The same reason many Universities still own on campus housing in most cases. Likely because Universities will not let them. Also, it is likely that the NCAA would oppose it.

Good point. A lot of people assume that college sports programs always generate income for the school, but many of them lose money (though probably not the ones employing these particular coaches). I attended a school that was in the process of adding a football program, and the first effect of that was an extra fee for students (in addition to an existing athletics fee). I think the only way that college sports can be acceptable is if they never take money from other programs or increase the cost of education for students not participating in those sports.

Yes, profit centers. Notice how all but one of the coaches on that map coach Football or Basketball.

Athletic departments as a whole aren't profitable because the ridiculous amounts of profits earned by basketball and football can't subsidize the losses incurred by supporting the other sports.

Does this profit calculation include or exclude the cost (or bond interest payments) of building up a football stadium with supporting facilities?

Obviously that's going to be an analysis that has to be done for every stadium. Certainly in many cases it works out -- the average age of an NCAA stadium or arena is much higher than a professional venue. These are not the billion-dollar megaplexes you're probably imagining.

But really, I think the issue here is that you're arguing at cross purposes. There's a strong argument to be made that the whole idea of the state running a profit-making sports team through its universities is flawed and borderline immoral. And I tend to agree.

But that says nothing about the economics of the situation, or the "fairness" of paying the coaching staff a market wage, or even the fact that these absurd salaries are, in fact, driven by a very liquid and efficient market.

Yeah, agree with what you're saying. The "fairness" comes into play as high-salaried coaches become high-pensioned retirees [1], but other than that NCAA salaries are not wildly divergent from professional sports salaries, so seem to be in line with market

http://budget.universityofcalifornia.edu/files/2011/11/2012-...

Yes, profit centers. While most are losing money, the ones paying their coaches many millions of dollars, generally are not.

I think the obvious question regarding this issue is whether athletics provide any educational value. Is so, why would we care if they turn a profit? How would spending funds on athletics be any different than spending funds on other ancillary departments like drama or music?

It seems that most universities believe there is some value in it for students considering that many schools are happy to run athletic departments at a net loss. The Ivy League for example has a strong tradition of fostering athletic competition and those schools often have larger athletic departments than most large state universities.

Athletic departments also provide a marketing opportunity. Students are often willing to go to a particular school because they like the football team. For better or worse, sports add an additional experience to college.

Is this including increased revenue from alumni? Or rather, how much it would decrease if the sports teams were removed? I'm not sure if this is actually something that would happen, but it seems like it could be.

While it's unclear where removing the sports team would work (one would probably have to look at universities outside of US, which more often don't have large athletic programs), this research found no correlation between team performance and alumni donation volume.

http://www.news.cornell.edu/stories/2004/09/surprise-winning...

Yes, most college athletic departments do operate in the red. I think you are forgetting about the professional sports, and the professional coaches.

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