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What Makes a College Coach Overpaid?

From the Bleacher Report, we have a list of 20 coaches who are supposedly being paid too much.

College football coaches make incredible amounts of money in today's football-obsessed society. Schools want wins and they want a lot of them. They want conference championships and national championships.

And they're willing to pay for them.

According to a study conducted by USA TODAY, at least two-dozen head coaches made more than $2 million in 2010.

Doesn't that seem ridiculous?

There is no doubt that these men work extremely hard in an excruciatingly competitive field, but many are overpaid.

Here are the 20 most-overpaid head coaches in the FBS.

The problem with the analysis is the benchmark:  championships.  "Production" of competition requires multiple teams (see Walter Neale's "Peculiar Economics of Professional Sports.").  If one coach fails to win championships, perhaps it's because he's competing against elite programs year in and year out.

Take Mizzou's Gary Pinkel, for example.  BR ranks him 10th on the list and writes that he is "milking it" because he gets paid a lot without winning even a conference championship at Mizzou.  It is true he has never won a conference championship.  The two years Mizzou won the Big XII north, a program called Oklahoma beat them three times, once in the regular season and twice in the conference championship game (2007 and 2008).  Maybe it isn't Pinkel not getting his team to produce at the top of their games.  Maybe credit should go to Bob Stoops (who also appears on the list) in getting the Sooners to play at the very best of his players' ability.

A better benchmark is to use a coach's marginal revenue product: how much revenue he generates for his school.  MRP, in turn, is determined by fan willingness to pay for tickets, souvenirs, concessions, etc.  It also depends on fan willingness to watch the Tigers on television and their willingness to donate to the university.  If Gary Pinkel generates $3 million in revenue to Mizzou and is paid $2 million, is he over paid?  No.  If anything, he's underpaid.

BR link via Craig Depken on Facebook.

Cross posted at Market Power.