Basketball Prospectus: Unfiltered Everything Else is Fluff.

January 5, 2011

Jayhawks see through the Lew Perkins Fallacy. Will others?

Filed under: Uncategorized — John Gasaway @ 10:29 am

Kansas has hired a new athletic director, one Sheahon Zenger, who seems like a good guy. He’s 44, holds a Ph.D. but doesn’t demand “Dr. Zenger” privileges, and has even been called “Dudley Do-Right” by the chair of the search committee that brought him to Lawrence.

The Jayhawks could use a Dudley Do-Right. Zenger replaces former AD Lew Perkins, who was last seen in Unfiltered presiding over a athletic department that attracted the notice of federal investigators thanks to piles of ill-gotten cash generated by a years-long ticket scandal. 

Perkins earned $4.4 million in salary and bonuses in 2009. By contrast Zenger will be paid a base salary of “just” $450K. Will the administration of the Kansas athletic department suddenly become 90 percent less effective? I doubt it, because of what I’ve termed the Lew Perkins Fallacy:

In a sense I’m sympathetic toward KU athletic director Lew Perkins, who was apparently victimized by less than diligent due diligence. But the larger lesson to be learned here surely concerns the myth of the omnicompetent and irreplaceable leader, a myth that within athletic departments started with the basketball coaches but has now spread upward to include their bosses. Having an inflated sense of someone else’s importance probably isn’t too awful, but paying them according to that sense is.

Thus the Fallacy: If you preside over an organization that generates a lot of revenue, your compensation, no matter how absurd, isn’t absurd.

Let’s say I have an athletic department that generates a lot of revenue. It will fall to someone to lead that department. Now, you there, random Prospectus reader. If you’re a reasonably coherent sort, one who bathes regularly and stays on top of your email, I’ll wager you could hit the 50th percentile in your performance as the head of an athletic director. So I hire you.

Soon you’re pegging your compensation at five or 10 or even 25 percent of net proceeds or even gross revenue and telling me how very specialized and invaluable you are. After all, look at all this money the department is raking in. But it’s the position that’s the rare quantity, not you. Being hired into a position where your specious math is not only accepted but is actually expected is the equivalent of winning the lottery.

Perkins reportedly makes more than $4 million a year, which by my math translates into close to $2,000 an hour….Perkins could be an absolute genius in his field, but I could throw a dart at the KU faculty-staff directory, pay my random target $150K a year, and KU would see a dramatic upswing in the position’s performance-to-compensation ratio from the very first minute of my lucky carbon blob’s tenure.

With the contract that Kansas has given to Zenger, the powers that be in Lawrence announce that they have seen the light. May others be so fortunate.    

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