The key is analysis at the margin, along with the indifference principle that stipulates returns on investments equalize, adjusted for risk.  Samford economist Art Carden kicks off the explanation, which, predictably, comes up each football season, particularly when the issue of severance packages (buyouts or golden parachutes, if you will) for failing coaches arises.  "It's a classic question: why are teachers and professors, who provide such great benefit for society--though this is not clear, as Bryan Caplan argues in The Case Against Education and as I discuss here--paid so little relative to football coaches and star athletes?" It's not a proper comparison, as we are looking at the rewards to the top coaches and players, compared with the rewards to journeyman professors.
I submit that on average, athletic coaches cannot do better than economics professors. Harvard, in all likelihood, has fine economics professors and better-than-average athletic coaches. Oklahoma has better-than-average economics professors and fine football coaches. Wisconsin-Oshkosh has average economics professors and football coaches about whom I know nothing.

Therefore, the differences in pay are not necessarily statements about misplaced priorities in our society.
Professor Carden runs a good play on first down.
To be outraged is to fail to use one of the big ideas in economics: Thinking At the Margin. How much value do we get from the next teacher or the next major college football coach or the next superstar athlete? Fundamentally, the reason a teacher gets paid so much less than a star athlete is that there are far more of them relative to what is demanded.

There are, at any point, only 130 slots for FBS Division I football coaches, 450 slots for players in the NBA, and 32 starting quarterbacks in the NFL. By comparison, the National Center for Education Statistics reports that there are some 3.7 million full-time equivalent teachers in public and private schools in the United States. Teachers might create more value than football coaches in total, but at the margin people have demonstrated that they are willing to pay a lot more for Nick Saban to coach than for your economics professor to teach.

So the next time you feel outraged that elite athletes and coaches (and CEOs and movie stars and...) get paid so much more than everyone else and want to ask "does our sick and twisted society value football more than education," content yourself with the answer: yes--but only at the margin.
Here the column endeth. Professor Carden missed a field goal as time expired. (Both Packer and Viking fans know what I'm alluding to here ...)

Why, dear reader, with so many kids suiting up for high school football each year, isn't there an industrial reserve army of quarterbacks or coaches or movie stars depressing salaries, the way the reserve army of adjuncts is manifesting itself in the universities, or the way Karl Marx and his followers insist affects the wages of manual workers?

Dionne Warwick answered that question nearly fifty years ago.  "And all the stars that never were/Are parking cars and pumping gas."

Here is the rest of the story.
The differences in compensation reflect in part the tenure system for professors, which reduces risk, and the zero-sum nature of sport, which is not present in academic research. In economics, the modal number of faculty publications is zero, aggregating among all institutions of higher learning, and a professor with two or more articles in the best twenty economics journals (I don't care what that list looks like beyond American Economic Review, Econometrica, Journal of Political Economy, and Quarterly Journal of Economics: pick any other sixteen) is above average for lifetime research. (Thus I might have characterized the Oshkosh faculty too harshly.) Furthermore, the University of Chicago's success in rational choice modelling or the University of Minnesota's work in macroeconomics or San Diego's econometrics doesn't invalidate the work done by other economists in other, less trendy (if you want to say less challenging, that doesn't change my point) fields. Taken together, the job market for economists is one in which the success of a Clark Medalist does not imply the failure of a researcher somewhere in the mid-majors or a teaching-only professor at a regional public. Tenure notwithstanding, professors have some opportunities for lateral or upward or downward moves in the prestige hierarchy with relatively small effects on salary.
The career ladders in economics are more rigid: the strategy, to this day, is to get into the best possible graduate program and aim for the best possible first placement, wherever that graduate program is on the food chain, in order to have greater fallback opportunities when that contract renewal or tenure review goes badly, and they will.

In sports and the performing arts and some lines of business, there is more fluidity, and more risk.
So where are the below-average coaches? Possibly at Oshkosh? Or possibly not: somebody assists at Oshkosh to earn the opportunity to assist at Miami of Ohio to earn the opportunity to assist at Penn State to earn the opportunity to be head coach at Nicholls State to earn the opportunity to be head coach at Alabama. Or somebody is head coach at New Holstein and walks into the Oshkosh athletic director's office when there's a line coach job open. More upside potential, more downside risk, no tenure.
Still, though, the arbitrage opportunities are present.  " In college sports, a successful coach can work up from high school to an assistantship, to a head coaching appointment at a mid-major, and ultimately to a power conference. The academic pecking order is for the most part too rigid to permit such a career ladder."  Ask the next professor who laments high coaching salaries if he or she is willing to risk exile to a state teacher's college or a starveling high school with the possibility of working up to a job as placekicking guru or winning a college basketball tournament.  (And you're only as good as your most recent tournament, so you might be back to holding tackling dummies at a high school again.)
Could a kid who went from Milwaukee Hamilton to River Falls and discovered an academic vocation there gain admission to a strong graduate program on the basis of good grades, a 99th percentile quantitative GRE, and reference letters from journeyman academics? Or would that kid be passed over for someone with a slightly lower grade-point average, a 90th percentile quantitative GRE, and favorable reference letters from Carleton or Swarthmore faculty, to name two colleges known as cradles of economics Ph.D.s?
A different kid from Milwaukee Hamilton discovered an economics vocation, but he discovered it at the University of Wisconsin proper, which probably made the odds more in his favor when it came to lining up letters of recommendation.

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