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Rent Sharing and the Compensation of Head Coaches in Power Five College Football

Author

Listed:
  • Michael A. Leeds

    (Temple University)

  • Eva Marikova Leeds

    (Moravian College)

  • Aaron Harris

    (Texas A&M University)

Abstract

The monopoly and monopsony power of intercollegiate sports create significant rents, but previous studies of intercollegiate football coaches’ salaries implicitly assume that coaches are paid their marginal revenue products. In a two-stage estimation, we show that coaches share in these rents. The first stage shows that several common measures of coaches’ productivity do not affect an athletic department’s variable revenue. When we include these measures in the second-stage salary equation, their impact on pay reflects bargaining power, not productivity. We also find that several measures of fixed revenue, which are independent of the coach’s performance, increase the coach’s pay.

Suggested Citation

  • Michael A. Leeds & Eva Marikova Leeds & Aaron Harris, 2018. "Rent Sharing and the Compensation of Head Coaches in Power Five College Football," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 52(2), pages 253-267, March.
    • Handle: RePEc:kap:revind:v:52:y:2018:i:2:d:10.1007_s11151-017-9604-x
    DOI: 10.1007/s11151-017-9604-x
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    References listed on IDEAS

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    1. Jeffery Borland, 2003. "Demand for Sport," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 19(4), pages 478-502, Winter.
    2. Erin Lane & Juan Nagel & Janet S. Netz, 2014. "Alternative Approaches to Measuring MRP," Journal of Sports Economics, , vol. 15(3), pages 237-262, June.
    3. repec:ucp:bkecon:9780226253268 is not listed on IDEAS
    4. Krautmann, Anthony C, 1999. "What's Wrong with Scully-Estimates of a Player's Marginal Revenue Product," Economic Inquiry, Western Economic Association International, vol. 37(2), pages 369-381, April.
    5. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-475, June.
    6. Brown, Robert W, 1993. "An Estimate of the Rent Generated by a Premium College Football Player," Economic Inquiry, Western Economic Association International, vol. 31(4), pages 671-684, October.
    7. Gary J. Colbert & E. Woodrow Eckard, 2015. "Do Colleges Get What They Pay For? Evidence on Football Coach Pay and Team Performance," Journal of Sports Economics, , vol. 16(4), pages 335-352, May.
    8. Clotfelter,Charles T., 2011. "Big-Time Sports in American Universities," Cambridge Books, Cambridge University Press, number 9781107004344, December.
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    Cited by:

    1. Jeremy M. Losak & Benjamin J. Posmanick & Raymond D. Sauer, 2024. "On the Value of a Premium College Football Player: Evaluating the Literature," Journal of Sports Economics, , vol. 25(4), pages 472-506, May.
    2. Craig Garthwaite & Jordan Keener & Matthew J. Notowidigdo & Nicole F. Ozminkowski, 2020. "Who Profits From Amateurism? Rent-Sharing in Modern College Sports," NBER Working Papers 27734, National Bureau of Economic Research, Inc.
    3. Stacey L. Brook, 2021. "A Comparison of NCAA FBS Head Coaches Salary Determination From New and Modified Contracts," Journal of Sports Economics, , vol. 22(5), pages 491-513, June.
    4. Michael A. Leeds & Ngoc Tram Nguyen Pham, 2020. "Productivity, Rents, and the Salaries of Group of Five Football Coaches," Journal of Sports Economics, , vol. 21(1), pages 3-19, January.

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