Submitted by Tyler Durden on 05/12/2013
Think the best paid public servant in your state is some tax-collecting bureaucrat with a commission-based comp structure, or some administrative apparatchik? Think again. As the following infographic from Deadspin shows, in 41 US states, the highest-paid public employee is either the football, basketball or hockey coach at the local state school. Whick takes cares of the "Circuses" part. For now, at least, public sector bakers did not make the list...
But fear not: your taxes don't pay for these key actors in the daily lineup of "bread and circuses" - from Deadspin: "The bulk of this coaching money—especially at the big football schools—is paid out of the revenue that the teams generate."
What are the considerations?
One wonders - how long until Wall Street starts pitching football coach total return swaps and football victory collateralized structured products? And when will these subsequently become securitized, as footballs and jockstraps become quality eligible collateral to extract some more value out of yet another source of "assets"?
Zero Hedge
Think the best paid public servant in your state is some tax-collecting bureaucrat with a commission-based comp structure, or some administrative apparatchik? Think again. As the following infographic from Deadspin shows, in 41 US states, the highest-paid public employee is either the football, basketball or hockey coach at the local state school. Whick takes cares of the "Circuses" part. For now, at least, public sector bakers did not make the list...
But fear not: your taxes don't pay for these key actors in the daily lineup of "bread and circuses" - from Deadspin: "The bulk of this coaching money—especially at the big football schools—is paid out of the revenue that the teams generate."
What are the considerations?
- Coaches don't generate revenue on their own; you could make the exact same case for the student-athletes who actually play the game and score the points and fracture their legs.
- It can be tough to attribute this revenue directly to the performance of the head coach. In 2011-2012, Mack Brown was paid $5 million to lead a mediocre 8-5 Texas team to the Holiday Bowl. The team still generated $103.8 million in revenue, the most in college football. You don't have to pay someone $5 million to make college football profitable in Texas.
- This revenue rarely makes its way back to the general funds of these universities. Looking at data from 2011-2012, athletic departments at 99 major schools lost an average of $5 million once you take out revenue generated from "student fees" and "university subsidies." If you take out "contributions and donations"—some of which might have gone to the universities had they not been lavished on the athletic departments—this drops to an average loss of $17 million, with just one school (Army) in the black. All this football/basketball revenue is sucked up by coach and AD salaries, by administrative and facility costs, and by the athletic department's non-revenue generating sports; it's not like it's going to microscopes and Bunsen burners.
Most of these databases include only the coaches' base salaries, which are drawn directly from the state fund. This is how you could be led to believe that Virginia's offensive coordinator earns more than its head coach.Paying millions to "mediocre" state coaches: not a bad gig if one can get it.
Far exceeding these base salaries is the "additional compensation" that almost all of these coaches receive, which is tied to media appearances, apparel contracts, and fundraising. While this compensation does not come directly from the state fund it is guaranteed in the coaches' contracts; if revenue falls short, the school—and thus the state—is on the hook to cover the difference. Plus, even it doesn't come directly from taxpayers, this compensation is still problematic for all the reasons listed above.
Beyond salary and additional compensation, coaches earn money from bonus incentives tied primarily to the team's performance. This analysis ignored those bonuses and focused on guaranteed money, as it's impossible to guess at whether a coach will hit his benchmarks. And we're not even touching the ridiculous amounts of money coaches can get if they're fired before their contract ends.
One wonders - how long until Wall Street starts pitching football coach total return swaps and football victory collateralized structured products? And when will these subsequently become securitized, as footballs and jockstraps become quality eligible collateral to extract some more value out of yet another source of "assets"?
Zero Hedge
