Inside the NFL | 4

2012
Hanover College
Clarence Cledanor
[Inside the nfl: how do minority head coaches measure up against the majority?]
In 1921, the NFL hired its first minority head coach, Fritz Pollard. Another minority would not be hired as a head coach until the 1979 season when the Oakland Raiders hired Tom Flores. This project will attempt to examine the labor discrimination that existed, and still may exist, in the NFL. Using data prior to the beginning of the 2012 season, this assessment will primarily look to analyze the salaries of NFL head coaches and see if they differ amongst whites and minorities as evidence reveals that, on average, minorities are paid significantly less.

Table of Contents

Introduction Page 3

Literature Review Page 4

Model Page 8

Data Page 11

Empirical Results Page 11

Conclusion Page 15

Appendix Page 17

Bibliography Page 26

Introduction

This econometric model will look to delve into the prosperous realm of professional sports and attempt to provide substantial knowledge regarding the state of the minority head coach in professional sports with the main focus being that of the National Football League. Wage and labor discrimination will be the primary issues investigated by this model. More precisely, this model will look to answer the following three questions; 1.) On average, is there a significant gap in salary between those coaches who are of the minority and those who are not? 2.) On average, who are more successful (based on winning percentage), minority head coaches or the majority? 3.) Has the "Rooney Rule",established in 2003, been successful for minority head coaching candidates? Furthermore, in addition to answering the previous questions, by use of empirical research and statistical evidence, this model, in the overall scheme of the project, will also look to explain the behaviors of employers. For example, this assessment will look to provide information on why employers may, or may not, delegate minorities to managing, or leadership, roles. The essential purpose of this equation will be to provide inferences on NFL head coaches' salaries as well as see what variables, if any, have the more significant impact on them.

Cross-sectional data prior to the beginning of the 2012 season is used for each head coach and, therefore, all thirty-two NFL teams. The dependent variable in this model is the salary of each head coach. The independent variables include head coaching experience, winning percentage, ethnicity, playing experience, and the number of championships won. Intuition, as well as previous literature, indicates that these factors significantly affect the salaries of NFL head coaches.

The data gathered for this project comes by way of several sources such as ESPN, official team websites, and the websites of teams' local newspaper. The data concerning the salary of each head coach was, for the most part, obtained from teams' official websites. The data for all of the independent variables was obtained from different credible league sources such as the ones already alluded to.

Literature Review

The history of minority coaches in professional sports does not possess a long lineage, as, quite frankly, they have not been given as many opportunities in contrast to their counterparts. One would think that for sports where minorities, mainly Hispanics and African-Americans, are practically the playing majority, there would be more minorities in leadership and managing roles. However, such is not the case. Over the eighty-plus year history of the NFL, there have been only twenty-two minority head coaches, with six of the twenty-two only being able to hold the “interim” head coach title. In 1921, the NFL had its first African-American head coach, Fritz Pollard. Another minority would not be hired as a head coach until the 1979 season when the Oakland Raiders hired Tom Flores. Could there be any particular reasons for this? How does the evaluation process for coaching proceed? Does the labor force in professional sports reflect that of the real world labor force? Is there anything being done to counteract this practice? Does it even matter? What follows is a review of literature aimed at analyzing why minority coaches have remained "locked out" for such a long period of time.

A review of the literature shows that researchers have observed a common process for the hiring of coaches. For the most part, coaches are hired based upon their experience as well as past successes. However, the basis upon whether or not a coach is hired depends on the preferences of the owner along with social changes in the economy. Goff and Tollison (2008) examined data from the NFL from 1987 through 2007 and revealed that integration was more commonplace in larger populated cities. They also reveal that the hiring process of management is totally different from the hiring process for players (p. 127). Furthermore, examinations of the regular season win records and of making the playoffs for NFL teams coached by both African-Americans and Caucasians between 1990 and 2002 show that African-American coaches were more successful (Madden, 2010, p.16). Madden gives evidence that supports that teams who hire African-American coaches are more successful than those who do not. However, African-American coaches have not been as successful in the playoffs as only three have won the Super Bowl (p.16). Perhaps this may be a particular reason as to why minorities, for the most part, have not been able to get their foot in the door. Another reason could be that most owners are Caucasians over the age of 60. This insinuates that most of the people whom are in charge come from a time where things were socially different due to social schisms, segregation, civil rights movements, etc. Therefore, they may be unconsciously engaging in labor discrimination against hiring minorities, especially African-Americans.

One of the more famous minority NFL coaches, Tony Dungy, went through a series of secondary and assistant coaching jobs before he became a head coach. Dungy was often delegated as a head coaching candidate by his peers when Dungy was an assistant under Chuck Noll in the 1980s with the Steelers, but he would not become a head coach until 1996 when he began his own legacy coaching the Tampa Bay Buccaneers (Bouchette). For some reason, in most cases, minorities must go through numerous assistant coaching positions before even being considered as head coaching candidates. In essence, it is as if minority coaches are disadvantageously evaluated compared to their counterparts. Despite being equally qualified and seemingly more successful, minority coaches, for the most part, just do not get the opportunity. Nevertheless, as Madden (2009) states, “…the results are consistent with African American coaches being held to higher standards to get their jobs in the NFL (p. 1).”

One of the more notable movements to bringing awareness to labor discrimination in professional sports is the NFL’s “Rooney Rule.” The Rooney Rule is somewhat the NFL’s version of affirmative action. The Rooney Rule requires NFL teams to interview a specified number of minority candidates for head coaching and senior football operation opportunities whenever there is a vacancy. Prior to its establishment in 2003, there were seven minority head coaches in the history of the NFL, with only two actively coaching during the rules implementation. Madden and Ruther (2010) raise the idea of whether the performance advantage of minority head coaches had been eliminated in the time since the establishment of the Rooney Rule is analyzed. First, just four years after the Rooney Rule implementation there were seven active minority head coaches in the NFL. Evidently, the Rooney Rule is effective (p. 2). However, in accordance with Madden and Ruther, the advantage that minority head coaches had, in terms of being more successful, was now eliminated, as they state, “Since the Rooney Rule was put into place, there are no racial differences in performance among head coaches in the NFL.” There are currently six minority head coaches in the NFL.

The sports industry and its related components (managing, coaching, media, marketing, etc.) are a reflection of society. Muster (2001) analyzes the individual industries of Major League Baseball, the National Basketball Association, and the National Football League and compares them to the overall labor force to determine how professional sports fare in creating jobs for minority groups. With the overall labor force becoming more diverse by the moment, the significance of this research was to observe and analyze to what degree these two factions correlate. Muster recognizes that professional athletes have traditionally been male and, mainly, African-American or Caucasian. However, with the emergence of new professional sports organizations for women, opportunities for female athletes have increased. As Muster questions, “But who is working off-field for these organizations? How have sports teams and leagues staffed their organizations? Are they in line with the national labor hiring practices? Or, are they in stark contrast with the real world?” An unfriendly hiring process for minorities could have negative impacts on marketing, participation, popularity, and support for each league.

The reason why professional sports industries and society reflect each other, as Muster concludes, is that professional sports are a business first. Therefore, as a business, team officials and league officials must concern themselves with social issues. Minorities in the National Basketball Association, National Football League, and Major League Baseball make up a big percentage of the players. However, of course, the question of whether labor discrimination is practiced has not to do with the players, but rather those in the “front-office.” Muster states, “As far as head coaching positions are concerned, one must remember that these are very exclusive and competitive jobs." Only thirty-two positions are available in the NFL. The six African-Americans who currently hold head coaching positions (18%) clearly mirror the overall U.S. population of this minority group. Muster also expresses, "Are there more qualified African-American candidates to assume these roles? Most certainly. Should the number of African-American head coaches be raised simply to reflect the over-representation of African-American athletes participating in the games? Absolutely not!”

It could be the possibility that owners are not hiring minorities purposely, but rather unconsciously. Madden and Ruther (2009) chimes in by stating, "We believe the facts to be consistent with implicit racial discrimination in hiring. [6] NFL teams are not consciously rejecting African American coaches, but are unconsciously or implicitly discounting them in the presence of uncertainty and ambiguity as to who will be a successful coach for the initial hire as an NFL head coach." Muster refutes such notion as he expresses, “If owners are putting the best available talent on the field, and are color-blind enough to bolster their rosters with African-Americans, then it is just as conceivable that they are staffing their front offices with the best talent that they know.” Unfortunately, such notion cannot be accurately determined. As a result, the subject can be endlessly debated.

Model

As previously mentioned, the essential purpose of this equation will be to provide inferences on NFL head coaches' salaries as well as see what variables, if any, have the more significant impact on them. The equation for the model is as follows:

*SALi = β0 + β1Expi + β2Winsi + β3Racei + β4Playi + β5SBi + εi

Where:

SAL = Salary of head coach

Exp = Coaching experience; total number of years as head coach in NFL

Wins = Winning percentage of coach throughout career

Race = Dummy variable indicating whether or not a coach is a minority; 1 = minority, 0 = majority

Play = Dummy variable indicating whether or not a coach has played in the NFL; 1 = yes, 0 = no

SB = Total number of Super Bowl wins in coaching career

ε = measurement error due to omitted variables, season

i = 2012-2013 NFL Season

The main hypothesis being tested by this model is that minority coaches are paid differently than white coaches. The null and alternative hypotheses are as follows:

H0: β1 ≤ 0; β2 ≤ 0; β3 ≥ 0; β4 ≤ 0; β5 ≤ 0

Ha: β1 > 0; β2 > 0; β3 < 0; β4 > 0; β5 > 0

The dependent variable (SAL) in the equation is the salary for an NFL head coach during the 2012-2013. This variable will be measured in millions (of dollars). The independent variables represented in the equation are an individual's years of coaching experience, number of wins in their career, ethnicity, playing experience, and number of Super Bowl wins.

The first independent variable represented in the equation is coaching experience. More precisely, this variable represents the total years an individual has been coaching in the NFL. This variable is expressed as Exp in the formulated equation. It is expected that the higher an individual's total years of experience or as an individual's coaching experience increases, then the higher his salary. It is apparent that those who have been coaching longer are those with the highest salaries. This notion is perfectly logical as it can be assumed that those coaches who have plenty of experience coaching in the NFL have been able to do so, because they have been successful and are therefore rewarded with higher salaries. Since this notion is presumably verified, then the sign of the coefficient for Exp should be positive.

The second independent variable represented in the equation is an individual's winning percentage throughout his head coaching career in the NFL. This variable is expressed as Wins in the formulated equation. It is expected that the higher an individual's winning percentage then the higher his salary. Literature, as well as media, suggests this notion as it can be explained intuitively that those who are more prone to winning are, or should be, rewarded with more lucrative contracts. Assuming this interpretation is correct, the sign of the coefficient for Wins should be positive.