Mr Yost clearly empathizes with the students, particularly those from poor neighborhoods -- there's no escaping the presence of urban blacks in the so-called revenue sports -- who are used up and discarded to ensure that the show goes on. The root cause, however, of not-intellectually-inclined students who see sports glory as a high-risk but safer road to riches than music or drug dealing, is in the absence, for whatever reason, of their parents and teachers providing more mundane options. Yes, the book mentions the well-off parents who dig down to send their kids to sports camps, and yes, there's a lot of investment in golf and lacrosse and tennis and in some neighborhoods yachting, but those kids get the idea of having something to fall back on, such as investment banking or the law or marrying into money. And thus the blue-chip athletes in the so-called revenue sports produce surplus value that's expropriated by the coaches and the sponsors.
The problem, however, is that there really isn't surplus value, something that Mr Yost recognizes whenever he mentions, as often he does, the fact of subsidies from the university's general fund to the sports program. It is in the nature of cartels to dissipate rents. It is also in the nature of competitive markets to compete profits away. In positional arms races, the expenditures on position can dissipate more than the rents to be earned. So might it be with the revenue sports. We'd better enjoy that Humanitarian Bowl win, for instance, because the bill will be public knowledge by late April.
Thus my biggest complaint with the book: for his background in business reporting Mr Yost doesn't understand the subtleties of economics. For instance, he defends the high salaries of coaches as defensible because there is demand for their effort (true enough) and claims that the proceeds from bowl games yield a threefold return on the coaches' salaries (incomplete). Break it down, however, and a different picture emerges. Salaries are high for head coaches in basketball and football in part because professional teams are willing to recruit from the colleges. Adjusted for risk, however, coaches cannot expect to do better than the professors who sometimes make invidious claims about salaries. Minnesota's new coach, for instance, started at $275 for the season in high school, and there are a lot of stars who never were who are still assistant coaches holding tackling dummies somewhere in the wilderness of also-ran high schools. At the same time, the supposed return on investment to successful coaches must be weighed against the much smaller return on investment to unsuccessful coaches. Do the math: thirty-some bowls, somewhere in the neighborhood of seventy head coaches, salaries justified for the year, but for each bowl representative there exists five or six also-rans, whose coaches earn a comparable salary, unless they're fired for failure to make a bowl game, and the return on those investments is not so large. There's also a reason marginal revenue product is tricky to compute in practice: some of those bowl proceeds must be laid off against the debt service on the locker room cum study hall and media center, and the also-rans are also making those investments.
Perhaps the next bubble to pop will be the sports bubble. It is likely to take some time, though. I recall a Washington Monthly article from over thirty years ago suggesting that future historians would look at the late 1970s as an odd era in which the brightest people spent a lot of time and money learning to think like a lawyer, tying public-spirited government officials and entrepreneurs alike in procedural tangles. What they will say about the current era, in which young people develop their ability to perform at a sport to the exclusion of anything else, and in which the hours of radio and television punditry and the pages of the print media devoted to the games exceed those devoted to national affairs or new ideas, is likely to be caustic.
(Cross-posted to Cold Spring Shops.)