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Is the Coach Paid Too Much? Coaching Salaries and the NCAA Cartel

U of Alabama, Economics, Finance and Legal Studies Working Paper No. 08-03-02

26 Pages Posted: 8 Apr 2008  

Amy Farmer

University of Arkansas - Department of Economics

Paul Pecorino

University of Alabama - Department of Economics, Finance and Legal Studies

Multiple version iconThere are 2 versions of this paper

Date Written: March 1, 2008

Abstract

Recently a great deal of controversy has been generated from the salaries earned by head football coaches in the NCAA. On one level this seems odd since many figures in the world of sports and entertainment earn exceptionally high salaries. However, one important difference in the case of NCAA football is that the players themselves do not get paid. We develop a model which shows that a cartel agreement to not pay the players raises the coach's salary if some players choose where to play based on the identity of the coach. For some parameters, the gain in the coach's salary exceeds the loss in salary experienced by the player. On average, the agreement not to pay the players improves competitive balance.

Keywords: NCAA Cartel, Collusion, Labor Market, Monopsony

JEL Classification: C72, D2, J42

Suggested Citation

Farmer, Amy and Pecorino, Paul, Is the Coach Paid Too Much? Coaching Salaries and the NCAA Cartel (March 1, 2008). Available at SSRN: https://ssrn.com/abstract=1117583 or http://dx.doi.org/10.2139/ssrn.1117583

Amy Farmer

University of Arkansas - Department of Economics ( email )

Fayetteville, AR 72701
United States
501-575-6093 (Phone)
501-575-3241 (Fax)

Paul Pecorino (Contact Author)

University of Alabama - Department of Economics, Finance and Legal Studies ( email )

P.O. Box 870244
Tuscaloosa, AL 35487
United States
205-348-0379 (Phone)
205-348-0590 (Fax)

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