Athletics in the academic marketplace:

Using revenue theory of cost to compare trends in athletic coaching salaries and

instructional salaries and tuition

Scott Hirko, Ph.D., Central Michigan University

Welch Suggs, Ph.D., University of Georgia

Jeffrey Orleans, J.D., Alden & Associates

Outline

BackgroundConceptual FrameworkResearch QuestionVariablesMethods & AnalysisResultsConclusions

How much are you willing to pay for a college education?

How much are you willing to pay for college sports? To what extent is it part of a college education?

Conceptual Framework

FinanceRevenue theory of cost (Bowen, 1980)Resource dependency theory (Pfeffer &

Salancik, 1978; Suggs, 2009)IdentityCulture influencing decisions (Tierney,

1991; Hirko, 2011)Athletics = identity (Duderstadt, 2003;

Toma, 2003)

Research Question

To what extent are the costs of intercollegiate athletic coaching salaries tied to the academic marketplace?

Variables

Cost of instruction (IPEDS) How much does it cost to meet the mission?

Instructional salaries (IPEDS)Tuition, in-state undergraduate (IPEDS)Total athletic salaries (NCAA/USA Today)FB coaching salaries (NCAA/USA Today)Athletic expenses (NCAA/USA Today)

Methods

Data collection: IPEDS, USA Today FOIA of NCAA Forms 172 total public schools in FBS/FCS. Academies, privates,

Pennsylvania schools excluded Categorize

State Flagship school Division (FBS/FCS) Bowl Championship Series AQ or non-AQ, half, thirds

AQ/non-AQ AQ: Top half/bottom half expenses AQ: Top third/bottom third expenses

Athletic conference Imputation for missing data (1.3%) Growth rates, Correlation, ANOVAs Ratio to cost of instruction ALL DATA REPORTED IN NOMINAL/REAL DOLLARS

Correlations

Variable (Category) Cost of Inst

Tuition Athl Coach Salaries

Football Coaching Salaries (BCS AQ) .8469

Football Coaching Salaries (BCS not AQ) .7727

Football Coaching Salaries (FBS) .8455

Football Coaching Salaries (FCS) .5445

Athletic Coaching Salaries (Flagship schools) .4221

Football Coaching Salaries (Flagship schools) .4544 .8624

Football Coaching Salaries (Not Flagship schools) .6742

Athletic Coaching Salaries (BCS AQ top third expenses) .4369

Football Coaching Salaries (BCS AQ top third expenses) .5449 .8525

Football Coaching Salaries (BCS AQ bottom two-third expenses) .8456

Athletic Coaching Salaries (BCS AQ top half expenses) .4047

Football Coaching Salaries (BCS AQ top half expenses) .8582

Football Coaching Salaries (BCS AQ bottom half expenses) .8283

There is LITTLE relationship between tuition, instructional salaries, cost of instruction and total athletic or FB coaching salaries

ANOVAs

Variable and category SS df MS F

Total Athletic coaching salaries by Athletic Conference

21.0521864 168 .125310633 1.64*

Total Athletic coaching salaries by BCS AQ 21.0521864 168 .125310633 7.48***

Football coaching salaries by Athletic Conference

41.2457321 168 .24551031 1.85*

Football coaching salaries by BCS AQ 41.2457321 168 .24551031 9.87***

Football coaching salaries by Division 41.2457321 168 .24551031 6.17*

Football coaching salaries by Flagship 41.2457321 168 .24551031 6.05*

Cost of instruction by Athletic Conference 10.3090236 168 .061363236 1.73*

***p<.001, ** p<.01, * p<.05

There is SIGINFICANT PREDICTABILITY between category and coaching salaries, ESPECIALLY BCS-AQ status

Conclusions

1. Tuition is up, faculty salaries are flat, and athletics salaries keep rising

2. BCS AQ schools = big athletic salaries3. Non BCS AQ schools athletics spending big

money but cannot keep up4. FCS schools = athletics salaries less

expensive, but expenses growing with less resources than FBS

5. Top half of BCS AQ is leading the spending binge

Recommendations

1. What is the purpose for athletics? Look at differences in athl-acad marketplaces

2. Zero-sum game & marketplace: Paying more $ for coaches does not guarantee success

3. Presidents create a coalition to decide on value of salaries

4. State legislators keep an eye on athletics spending

Limitations/Future Research

1. Cost of instruction vs. E&R, E&G

2. HBCUs?

3. Salaries vs third-party compensation

4. Looked at most recent conference affiliation instead of switches

5. Switching conferences may be its own classification: impact of switch on salaries/financial burden

Contact us

THANKS TO USA TODAY

Scott Hirko, Central Michigan University, hirko1sr@cmich.edu

Welch Suggs, University of Georgia, wsuggs@uga.edu

Jeffrey H. Orleans, Alden & Associates, jefforleans24@gmail.com