Analysis Of Coaches’ Pay And Revenues For College Football | Summary And Conclusions

Histogram and Boxplot Analysis

The sport of football has risen to be the hobby and leisure time killer for most people globally. A few centuries ago, football was played for fun and as a hobby; however, a lot of transformation have taken place. Today, football has transformed to be defined as a lucrative activity all over the world (Milanovic 2015). In fact it has been established as a business. A research done by the United Nations opines that football sport account for about 3% of the world economic activities. According to the European Union, this sport accounts for 1% of total Gross Domestic Product. In the United Kingdom, it is estimated that the sport accounts for about 2.5% of their Gross Domestic Product. To add on, in the United States of America, it is estimated that the sport generates for about $300 billion per year to their economy (Hoehn and Szymanski 2019). This growth, support base and populism have attracted individuals and organizations to invest in football.  This game has been taken a notch higher where players are been signed on a global market. This is the same with the couches too. The latest statistics have shown that football players and some couches are some of the best paid people in the world. Due to its lucrative nature, this business has extended to colleges (Underwood 2017). The business is earning the colleges millions of dollars of money in profits. The coaches who are in charge of these football colleges also earn handsomely. In regard to the above background, this report collected data on coaches’ salaries and profit for football colleges from 105 colleges who take part in division 1 football Bowl Subdivision.

Histogram for coaches’ pay

Figure 1

Figure 1 above shows a histogram of the distribution of head coach school pay. It can be observed that the data is much concentrated on the right side of the distribution. The trend was like, as the salary increased, the number of coaches in those groups reduced. It can therefore be said that the pays were skewed to the right. The pays to the head caches were not normally distributed.

Figure 2

Figure 2 above shows a histogram of the distribution of net football revenue. It can be observed that the data is much concentrated on the right side of the distribution. Most of the revenue was concentrated between zero revenue and 20,000,000. Fewer revenues were between 30,000,000 and 50,000,000. It can therefore be said that the revenues were skewed to the right. The revenues to the football colleges were not normally distributed.

Descriptive Statistics

Figure 3

Figure 3 shows the boxplot of the variable “head coach school pay”. The box plot was constructed to establish the distribution of the head coach school pay. As can be observed, the median line does not cut the box into two equal parts. This is an indication that the head coach school pays were not normally distributed. The distribution had a long tail to the left. This still confirmed that the pays were rightly skewed and not normal.

Figure 4

Figure 3 shows the boxplot of the variable “net football revenue”. The box plot was constructed to establish the distribution of the net football revenue. As can be observed, the median line does not cut the box into two equal parts. This is an indication that the net football revenue was not normally distributed. The distribution had a long tail to the left. This still confirmed that the pays were rightly skewed and not normal.

Descriptive statistics for head coach pay

Table 1

This research report also sought to establish the summary statistics of head coach pays. Table 1 above shows the findings of the descriptive statistics computed. It can be observed that the mean head coach school pay was 1,547,898.01 dollars with a standard deviation of 1,185,496.17 dollars. The median head coach school pay was 1,260,000 dollars while the modal pay was 1,600,000 dollars. The highest paid head coach earned 5,316,667 dollars while the lowest paid coach earned 250,000 dollars. It was observed that the kurtosis value was 2.46 and the skewness value was 1.68. These two values represent the distribution of the data. Since the values are far from zero, it can be said that the salaries to the coaches to the colleges were not normally distributed. It is skewed to the right since the skewness value is positive.

Table 2

The research report sought to establish the summary statistics of net football revenue for the football colleges. Table 2 above gives the findings of the descriptive statistics computed. It can be observed that the mean net football revenue was 9,722,891.524 dollars with a standard deviation of 15,456,514.87 dollars. The median net football revenue was 3019406 dollars while the modal net football revenue was zero dollars. The highest revenue earned by a football college was 70,885,526. When it comes to minimum, losses were made because there were negative values. It was observed that the kurtosis value was 2.46 and the skewness value was 1.68. These two values represent the distribution of the data. Since the values are far from zero, it can be said that the net football revenue to the colleges is not normally distributed. It is skewed to the right since the skewness value is positive. 

Scatter Plot and Correlation Analysis

Figure 5

The chart in figure 5 is a scatterplot showing the relationship between head coach school pay and football net revenue. It can be observed that there is a line of best fit which cuts across the data points. This is an indication that there is a linear relationship between football net revenue and head coach school pay. The value of R-squared obtained is 0.5934. This means that the independent variable which is football net revenue is responsible for 59.34% variation that occurs in the dependent variable “head coach school pay”. The coefficient of the independent variable is 0.059. This means that there is a positive relationship between dependent variable “head coach school pay” and the independent variable which is football net revenue. To add on, the intercept value is 973,444 dollars. This means that when the revenue of Football College is zero, a coach would still earn 973,444 dollars.

Correlation between head coach school pay and football net revenue

Table 3

Table 3 above gives the results of a correlation analysis between dependent variable “head coach school pay” and the independent variable which is football net revenue. It can be observed that the correlation coefficient, r, was found to be 0.77. This means that the two variables (“head coach school pay” and “football net revenue”) have a strong and positive correlation with each other.

Conclusion

From the analyses above, this research report has concluded that in deed football college business is lucrative. This has been confirmed by the average amounts that the head coaches are earning and colleges making. The mean head coach school pay was 1,547,898.01 dollars while average net football revenue for the football colleges was 9,722,891.524. It can be concluded also that there is a strong correlation between the “head coach school pay” and “football net revenue”. It was observed that the correlation coefficient, r, was found to be 0.77. This could also mean that an increase in the amount of revenue to the football colleges led to an increase in the salaries for the coaches. However, this report was not able to determine whether this correlation was causation or just by chance. The independent variable which is football net revenue is responsible for 59.34% variation that occurs in the dependent variable “head coach school pay”. However, this research was not able to determine the other about 40% of the variation that occurred in the response variable – salary. This report would like to recommend further research to be conducted to establish what causes the other variation. Lastly, this research confirmed that the salaries paid to the coaches were not normally distributed, most coaches earned less while few coaches earned very high salaries. This also played out when it came to revenue earned by football colleges. Majority earned less revenue while few colleges earned very much revenue.

References

Hoehn, T, and S Szymanski. The Americanization of European Football. Economic Policy. Vol. 28. 2019.

Milanovic, B. “Globalization and goals: does soccer show the way?” Review of International Political Economy 12, no. 5 (2015).

Underwood, R. “Building service brands via social identity: Lessons from the sports marketplace.” Journal of Marketing Theory & Practice, (Winter), 2017: 1-13.

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