Rent Sharing and the Compensation of Head Coaches in Power Five College Football

Who Profits from Amateurism? Rent-Sharing in Modern College Sports

“…This percentage varies over the years, but the average amount of revenue paid to the top 5 executives in the database was 1.32 percent with a low of 0.43 percent and a high of 2.9 percent. The large rent-sharing elasticities we estimate for football coaches' salaries are consistent with Leeds et al (2018). We speculate that the existing limits of player compensation cause excess rents to be transferred to coaches.…”

“…These studies primarily focus on a single part of the value chain in isolation and lack the complete financial data that we have gathered in this paper. For example, Leeds, Leeds, and Harris (2018) examines whether coaches capture a greater share the economic rents than would be expected given their on-the-job performance. Similar to our results, they find that coaches capture a portion of the rents that exceed their on-the-job performance.…”

Productivity, Rents, and the Salaries of Group of Five Football Coaches

“…We find strong evidence that both factors play a role. Perhaps because of the lower revenue Group of Five schools receive from outside sources, we find that success on the field is more directly tied to success on the bottom line for them than Leeds et al (2018) find for Power Five schools. However, we also find that outside sources of revenue, such as the money from broadcasting and licensing rights, have a strong, positive affect on coaches' pay.…”

“…Our model of salary determination is based on that used by Leeds et al (2018), which distinguishes between payments based on the coach's MRP and payments that are the coach's share of rents that are beyond his immediate control. Their model, in turn, is based on work by Berri, Leeds, and von Allmen (2015) on the determination of salaries in the presence of "fixed revenue."…”

“…There has, however, been relatively little systematic study of this alleged connection. Moreover, the few studies that exist, most notably Grant, Leadley, and Zygmont (2013) and Leeds, Leeds, and Harris (2018), focus on coaches in the Power Five conferences, the programs that generate the highest revenue and have the highest-paid coaches. 1 This article extends the work by Grant et al and Leeds et al by analyzing the pay of coaches in the so-called Group of Five conferences (Table 1).…”