A new study by researchers at the University of Colorado Denver Business School, found that colleges and universities typically get what they pay for when it comes to hiring top tier football coaches.
The study, published in the May edition of the Journal of Sports Economics, found a positive relationship between the amount a coach is paid and the football team’s performance and that, when schools change coaches, higher pay is associated with improved performance.
CU Denver researchers Gary Colbert, PhD, and Woody Eckard, PhD, analyzed the performance and coach salaries of Football Bowl Subddivision (formerly Division-IA) football teams. The study is one of the few that examines the link between coach pay and team performance.
Using publicly-available salary data from USA Today covering 2006-11, Colbert and Eckard looked at 110 FBS football teams. Sixty-three are in one of the six conferences that automatically qualify (AQ) to participate in one of the five premier Bowl Championship Series (BCS) bowl games during the study period. Team performance is based on end-of-season Sagarin computer rankings that includes a strength of schedule adjustment that in effect also controls for differences in conference strength.
The study assumes that university administrators hire head coaches expecting higher pay to yield more wins. Through their research, Colbert and Eckard confirm that assumption by establishing a direct correlation between higher pay and improved team ratings. It also appears that top-ranked universities are willing to pay large sums for small performance improvements to gain entry to the lucrative BCS bowls.
The researchers also found a “stunningly large” increase in pay over time for head coaches at the AQ schools such that the average pay now exceeds $2 million. They also report a considerable difference in pay between AQ schools and non-AQ schools such that the average coach pay for non-AQ schools is less than one-fourth that of average AQ school coaches.
“Overall, the study demonstrated that administrators perceive great value in a top-ranked football team and therefore will pay coaches high salaries to produce results,” said Colbert and Eckard. “Nonetheless, it remains an open question whether the actual benefits of team performance exceed the costs of these expensive undertakings.”
A copy of the research is available Here.
For more information contact: Emily Williams, Media Relations, University of Colorado Denver (C) 303.550.5789 | Emily.R.Williams@ucdenver.edu
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