5.12.11

OPPORTUNITY COSTS.

Years ago, promoters of conference basketball tournaments were of the view that the tournaments, because they made money, were an unalloyed good.  The individual who dared suggest that tournament attendance had a component that was diverted from regular season attendance might merit at best a polite dismissal.

No more.
There were empty seats inside Lucas Oil Stadium, as if the Indianapolis Colts were using the place.

The game forces fans to make economic choices, as if the budget would stretch to cover what are essentially two bowl games.

But put Wisconsin and Michigan State together, and the practical concerns go away.
Perhaps the title game for a power conference with a tie to a New Years Day (but never on Sunday) bowl, the practical concerns are in abeyance. On the other hand, when the college bowl season begins on Beethoven's birthday and overlaps the beginning of the professional football playoffs, which themselves begin far too late, and the teams in the Desperately Seeking Attention bowls lose money, and the Great Reset goes on for what seems like an entire presidential term, someone will pay attention to the elasticity of substitution between conference tournament games and bowl games.

More intriguing is this Freudian slip in an editorial from the Cascades and Saddles questioning the buyout of a losing football coach.
We know college athletics -- especially football -- are supposed to be viewed in a bubble, where revenues pay the freight without the state's help, and winning seasons serve as free advertising for academic programs.
Advantage, Cold Spring Shops.
"[S]ometimes the clearest indicator of a bubble about to pop is the most unlikely participants wanting to get in on the action."
At about that time, the first voices of reason begin to call for the equivalent of an arms-control treaty.
At the risk of stating the obvious -- this seems like a particularly bad time to pay Paul Wulff $600,000 not to coach [Washington State] football.

The money spent on college sports is mind-boggling enough. In the most recent survey of state salaries, [Washington] football coach Steve Sarkisian came out on top, with $1.98 million in gross pay for 2010.

[Washington] basketball coach Lorenzo Roma was paid $1.14 million last year, making him the second highest paid state employee.

But at least they draw their astronomical pay for coaching. Wulff's salary is small by comparison, but next year he'll be paid to not do his job.
In business, a golden parachute might make economic sense as an inducement for a senior executive who has made a major error to step out of line and disappear rather than put his interests ahead of shareholders.  But business is not a zero-sum game, and shareholders might come out ahead if their judgement to buy out an incompetent or overweening senior executive is correct.  In sports, twelve wins by the same team mean twelve losses shared among the other teams, and buying out an underachieving coach early doesn't necessarily increase the share of wins by the team that makes the buyout.  That has potential as a senior paper: prior to the widespread use of buyouts in collegiate coaching, what improvement in team records from a coach's second year to his third year occurred, and was that improvement more or less pronounced among coaches that had the kind of first two year records that now triggers the buyout?  It's only a senior paper because the level of inference is that required to grasp the regression fallacy.

Heck, even in hoping for some serious thought about allocating scarce resources, the Cascades and Saddles folks commit a regression fallacy.
Truth is, we can't help but share some of the excitement about the team's prospects under new leadership.

But it's impossible not to contrast the multibillion entertainment juggernaut that college football has become with the decline in state support for academic programs.

In Olympia this month, the discussion will revolve around courses being cut, class sizes expanded and tuition rising beyond the reach of more families.

Why can't some of the money pouring into PAC-12 athletic departments do more than sustain athletic programs?

Surely, there is some better use for $600,000 in Pullman than to keep Wulff out of Martin Stadium.
Truth is, it would take a comparison of the records of first-year coaches replacing fired second-year coaches with the records of second-year coaches with fireable records prior to the widespread use of these buyouts in their third year.  The result requires more systematic evidence, for instance at Wisconsin, Don Morton was three and out; his successor Barry Alvarez had one win, five wins, five wins.  In year four, his emergency recruits plus his first recruiting class won the Rose Bowl.

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