Saturday, November 28, 2009

"Opportunity Cost" at Notre Dame

My friends know I'm a college football fan. And one of the top stories this weekend is the fate of Notre Dame head-coach, Charlie Weis. The Wall Street Journal included this piece in today's edition. It basically shows what else could have been purchased with the compensation Coach Weis is expected to take with him, should today's game prove to be his last.

I would modify it. One presumes that another coach would have been hired, and that coach would have had a salary. But it still is interesting to put a coach's salary in "equivalent" values. Undoubtedly, having a good program ripples through in terms of additional revenues and contributions. Nevertheless, it helps to understand the choices we make, and the priorities we appear to have in making those choices.


Julie said...

Thanks for the WSJ reference. Charlie is getting the brunt of this, and it is hard on his son Charlie Jr. who attends the high school where I teach. ND made the contract offer and has had 5 coaches within 10 years.
Opportunity cost is very high--and the local economy has seen its ups and downs--particularly the hotels and restaurants. Will they get it right this time?
BTW--Charlie Jr. is a great kid--refreshing really.

Julie said...

more thoughts.....
should the NCAA cap coaching salaries? benefits? costs?

I've thought of many other places where $36 million would make a great difference in an educational institution. Research? Scholarships? Financial Aid? and the list goes on........

Tim Schilling said...

While you raise an interesting point, the market is the market. Other ways would be found to compensate the coach and to funnel resources to programs.

I am reminded of a very old issue of Sports Illustrated. It was the College Football Preview issue and there was an article on a particular player. The photo showed him standing in front of a very high-end sports car that he purchased with the proceeds from his "summer job."

The structure of the market is result of revealed preferences by producers and consumers, in the case of college athletics, the schools and their doners.

A winning program brings alumni and wannabes into the pool of supporters. There are some benefits. There are costs. Marginal analyis?

Moncherion said...

Awsome! Wonderful article.