The UConn student paper weighed in today on the issue of shoe contracts and college coaches. Like Jessie & Steve, the editorial board believes that the University, not the coaches, should benefit from such deals.

But let's talk econ for a minute. Suppose that fair market salary for Geno is $1 million. And suppose that Nike is willing to pay $500,000 in order to have UConn players wear its shoes. Imagine two scenarios.

(1) UConn pays Geno $1 million, and it also contracts directly with Nike to get the $500,000.

(2) UConn pays Geno $500,000, and it also grants him the right to contract with Nike and reap the $500,000 value of that contract.

In the second arrangement, even though Geno contracts directly with Nike, UConn still essentially receives the benefit. So there is no economic difference between the two arrangements.

You might worry if the school knew nothing about the contract -- if it paid Geno the full $1 million, then he went on his own without UConn's knowledge and took the $500,000 from Nike too. But it doesn't seem like that's what happened here -- UConn knew about all of this.

Is there any other ethical problem? Possibly. I suppose UConn could use the second arrangement as a way to pay Geno a sort of "hidden" salary. As a public institution, it might worry that by paying Geno a million bucks, it will face criticism that it is being too loose with taxpayer dollars. UConn might see arrangement (2) as a means to avoid that sort of scrutiny.

Maybe a school shouldn't play those sorts of games. Maybe if UConn is going to give Geno a compensation package worth a million bucks, it should do so openly so that everyone can see it. Maybe these contracts should be disallowed for that reason.

That's a fair argument. But it doesn't seem like a major ethical concern to me.