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I guess FIFA doesn’t adhere to the one bite rule

[ 117 ] June 24, 2014 |



Spoilers ahead.

. . . apparently a Norwegian fan has pocketed nearly $1000 after having the foresight to lay down a bet that Suarez would bite an opponent at some point during the tournament.

Room for debate: Are gargantuan salaries for university presidents A Good Thing?

[ 90 ] June 24, 2014 |

In the course of carrying out its secret mission as an engine of left-wing insurrection, the New York Times has put together a debate on whether its desirable for university presidents to have increasingly enormous sums of cash shoveled into their bank accounts, at a time when the people who do most of the actual teaching in the contemporary university — adjuncts and graduate students — are being paid in scrip for beef jerky and discounted parking passes.

The Times’ crypto-revolutionary agenda is evident to anyone who considers the arguments put forth by the people (a lawyer and a law professor) the paper chose to defend the status quo.

Shorter Raymond D. Cotton: University presidents are paid so much these days for the same reasons corporate CEOS are paid so much these days. QED,or something.

Shorter Dorothy A. Brown: The real issue here is that the stupendous compensation packages of white male university presidents are on average slightly larger than the stupendous compensation packages of women and minority university presidents.

The only reasonable explanation for this kind of thing is that it’s actually intended to put pitchforks and torches in the hands of the academic proletariat.

Speaking of which, here are some comparative figures I’ve put together on changes in compensation at one major research university over the past 35 years. (All figures are in constant 2013 dollars).

. . . Note that Michigan is a top school, so its faculty salaries are quite a bit higher than average. Two years ago the AAUP found the average salaries for full, associate, and assistant professors at all American colleges and universities to be $113K, $77.5K, and $67.5K respectively. In other words it appears average tenure track faculty salaries in the US are about what they were at an elite public school 35 years ago.

Average salary for different categories of employees at the University of Michigan in 1979 and 2013:


1979: $34,017

2013: $32,214

Director of Athletics

1979: $173,274

2013: $850,000 base salary (Does not include $100,000 in deferred compensation, and a possible $200,000 bonus).

Full Professor

1979: $107,493

2013: $167,260

Associate Professor

1979: $77,153

2013: $114,071

Assistant Professor

1979: $61,119

2013: $100,048

Dean of the Law School:

1979: $169,075

2013: $420,000

Administrative Assistant/Secretary

1979: $45,985

2013: $43,078


1979: $216,000 salary (other compensation, if any, unknown, although it’s safe to assume use of the president’s house was included.)

2013: $603,357 base salary; $100,000 bonus in lieu of a raise; $100,000 additional annual retention bonus; $175,000 annual deferred compensation, $50,000 annual retirement pay, free use of residence and car.

Free advice for HR Clinton

[ 228 ] June 22, 2014 |

Stop saying stuff like this:

Bill and Hillary have reportedly made more than $100m since they left the White House in 2001. Yet that didn’t stop Hillary complaining to Diane Sawyer on ABC News that the couple had emerged from highest office “dead broke”, a comment that ranks for its tone deafness alongside John McCain’s admission in the 2008 presidential election that he couldn’t remember how many houses he owned.

America’s glaring income inequality is certain to be a central bone of contention in the 2016 presidential election. But with her huge personal wealth, how could Clinton possibly hope to be credible on this issue when people see her as part of the problem, not its solution?

“But they don’t see me as part of the problem,” she protests, “because we pay ordinary income tax, unlike a lot of people who are truly well off, not to name names; and we’ve done it through dint of hard work,” she says, letting off another burst of laughter.

Did FDR ever pretend to be anything but a member in bad standing of the American aristocracy? I don’t think he did — which is probably why so many of his peers hated him with special venom. And he welcomed their hatred.

How to do things with advanced degrees

[ 165 ] June 22, 2014 |

Bernie Burk points to some ominous parallels between institutional reactions to overproduction of JD and PhD degrees.

Burk’s target is a recent report from an MLA task force, which concluded that:

(1) The median time taken between entry into graduate school and receiving a humanities PhD is nine years.

(2) Only about 60% of recent PhD recipients in languages and literature are getting tenure-track jobs.

(3) (1) and (2) don’t lead to the conclusion that too many people are getting PhDs, because you can do a lot of things with a PhD besides teach in a tenure track position.

The discourse of Ph.D. overproduction is wrong,” said Russell A. Berman, who led the task force that wrote the report and is a professor of comparative literature and German studies at Stanford University. “What we need instead is a broadened understanding of career paths.”

Departments should be more clear with students from the start that tenure-track jobs are becoming harder to find, Mr. Berman said, and should also explain to students what else they could do with a language or literature Ph.D. Career options off the tenure track, he said, include teaching at community colleges and high schools, working at cultural institutions such as heritage museums and libraries, and putting skills to use in the private sector.

“The subject matter may, in fact, be far from literature,” Mr. Berman said, “but the rich professional formation acquired during the course of doctoral study can be put to good use.”

As Burk points out, this sounds very much like the “you can do so many things besides practice law” line that began to be pushed aggressively by legal academic administrators, when it started to become clear that large percentage of law graduates weren’t getting jobs as lawyers.

In law, there are a couple of big problems with that argument:

(1) While it’s true that there are some non-lawyer jobs for which a law degree provides an advantage to a candidate, there are also many jobs for which a law degree constitutes a disadvantage. Nobody to my knowledge has even attempted to estimate the net effect of the interplay of these two categories on the employment prospects of non-lawyer JDs.

(2) Even for non-lawyer jobs for which a JD provides an advantage, it’s implausible that the cost of getting a law degree justifies whatever advantage a law degree provides. From an ex ante perspective, somebody who ends up as a compliance officer or a landman or in an HR office or what have you probably wouldn’t have gone to law school if he or she could have foreseen that the investment in law school wouldn’t actually produce a career as a lawyer.

I know nothing about the non-academic job market for humanities PhDs, but even to my inexpert ears Berman’s examples sound more than a little problematic.

Spending an average of nine years (!) to get a PhD — 44% of the people in the MLA survey had spent ten years or more — in order to end up teaching high school sounds kind of nutty. As for teaching at community colleges, isn’t that market particularly saturated with adjunct positions?

I’m also under the impression that museum work is both extremely difficult to get and generally goes to people with specialized training in the field, while libraries are usually staffed by people trained as librarians.

Suggesting that people “put skills to use in the private sector” sounds suspiciously like a Stanford professor telling the kids to get off his lawn and go get a job doing job things.

Also, the 60% of recent humanities PhDs getting tenure track jobs figure quoted in the report seems more like an optimistic ballpark estimate than a rigorous conclusion, as it’s based on comparing the number of annual PhD recipients to the number of advertised tenure track jobs. That method seems to assume that advertised job positions are always filled, and that they’re filled by recent graduates of American PhD-granting institutions, as opposed to people who have trying to find a tenure-track job for several years, or graduates of non-American institutions.

In any case, it’s a morbidly interesting question as to whether on average it’s worse to be a new JD who can’t get a job as a lawyer, or a new PhD who can’t get an academic job. The new JD is probably going to have way more educational debt (the average educational debt of new JDs is around $150,000), but that has to be offset by the difference between three and nine years of opportunity costs. What neither of these people need are lectures from comfortably tenured academics about how, despite all appearances, the problem somehow isn’t that too many people are being trained at enormous expense for careers that don’t exist.

A simple plan

[ 50 ] June 19, 2014 |

The undergraduate who had been writing poems about killing people showed up for his appointment in my office carrying a black canvas backpack. He was slim and dark-haired, his mouth torqued into an uneasy smile. I had spoken several times about his violent ramblings to the campus police and to the university’s office of mental health, and this was what they came up with: I should invite the student to my office and calmly begin a conversation with the following question: “Do you have a plan to harm yourself or anyone else?”

They didn’t specify a course of action if the answer was yes.

My office is small and square, with glass on three sides; an oversize desk takes up most of the floor space. I seated the undergrad and his backpack in the corner, leaving the door ajar so he was partly behind it. In the open doorway, I seated the student’s graduate teaching instructor — a shy, soft-spoken young woman working on her master of fine arts in poetry. It was she who had reported to me, her faculty supervisor, that despite clear and repeated instructions, the undergrad was writing things that had nothing to do with class assignments — things that made the other students afraid.

She was to accompany me in the subtle art of interrogation, and the two of us had made an agreement: At any sign of a problem, she was to sprint out of the office, assuming that I would be immediately behind her. In order to follow us, the student would have to squeeze somewhat awkwardly between my desk and the propped-open door. . .

I realized I was avoiding a return to The Question. Perhaps stalling for time, I asked about hobbies. What did the student do when he wasn’t studying? Did he have an outlet for relieving stress, maybe something outdoors? Yes, he said, the backpack slouched against his leg like a faithful dog — guns. He’d been taking lessons at a shooting range.

This doesn’t seem like the sort of intervention that should be outsourced (insourced?) by a university’s ever-expanding administration to the school’s faculty, although it doesn’t surprise me that it was.

Are increases in law school and undergraduate tuition due to cuts in state funding for higher ed?

[ 97 ] June 18, 2014 |

It’s an article of faith among many progressives — see several comments in this thread for example — that the radical rise in tuition rates at public universities and law schools over the last few decades is in large part due to severe reductions in state aid to these institutions.

The actual numbers don’t support this belief: in fact they pretty much contradict it.

When reading what follows, I would ask readers who are enthusiastic supporters of public education in general, and public higher education in particular — as indeed I am — to imagine the arguments being made about supposed cuts to higher ed being applied to government spending they don’t like. In those contexts, I think, parallel claims that government spending on X or Y has been “slashed” would be considered transparently disingenuous by those who aren’t big fans of the military industrial complex, or farm subsidies, or tax breaks for SUV owners, or what have you.

As to the numbers themselves, I’ve found annual data on public university tuition and total state spending on higher ed going back to 1982. Here’s what they show: (Around two thirds of law students attend private institutions, or pay unsubsidized out of state tuition at public law schools, but for the purposes of argument I’ll accept the claim that rising resident tuition enables tuition increases at private schools).

Total state funding for higher education rose continually for the quarter century between 1982 and 2007, to the point where such funding was 55% higher, in constant dollars, at the end of that quarter century. This came as quite a surprise to me. I graduated from a public university in 1982, and have taught at another one since 1990, and for all of that time I’ve been hearing about the financial pressure put on public universities by cuts in state funding.

It turns out that university administrators and their publicity organs often use a rather special definition of what constitutes a “cut” in state funding for higher education, which they define as any relative decline in state tax revenues, relative to state spending overall. In this – and pretty much only this – sense, state funding for higher ed has “declined” over the course of the past several decades.

Now an alert reader will ask: shouldn’t the total level of state support for higher ed be adjusted for overall population growth? Yes it should – except the problem with this argument is that there weren’t more traditional college-age people in America in 2007 than there were in 1982, because in the early 1980s the tail end of the baby boom was passing through college.

It’s true that a much higher percentage of traditional college-age Americans are going to college now than in the early 1980s, to the point where by 2007, state subsidies per full-time equivalent public college and university student were only 10% higher than they had been in 1982 – but of course arguing that this means public support for higher ed rose only modestly during this time begs a bunch of crucial questions (Imagine arguing that military spending had “really” gone up by just 10%, because even though such spending was up by 55%, there were now 50% more people in the military).

It’s also true that state funding for higher ed declined sharply in the wake of the Great Recession, which put state budgets overall under tremendous stress, and that such funding is only now starting to recover. Total state funding for higher ed fell from $88.7 billion in 2007 to $72.2 billion in 2012, before beginning to climb again to $75.1 billion in 2013 (all figures are in 2013 dollars). This makes for a total increase in state funding for public colleges and universities between 1982 and 2013 of 32%, and no doubt the decline in such funding in the years immediately after the investment banks did a couple of trillion dollars of damage to the American economy played a role in tuition increases over the past five years.

But the vast majority of the increase in tuition at public universities in general, and public law schools in particular, has nothing to do with declines in state funding between 2008 and 2012, because the vast majority of that increase took place over the previous 25 years, when state support for higher ed was increasing sharply.

Average resident undergraduate tuition at public four-year institutions in 1982: $2,423 (2012$)
Average resident undergraduate tuition at public four-year institutions in 2007: $6,809 (2012$)
Average resident undergraduate tuition at public four-year institutions in 2012: $8,655

Average resident law school tuition at public law schools in 1985: $4,280 (2012$)
Average resident law school tuition at public law schools in 2007: $17,114 (2012$)
Average resident law school tuition at public law schools in 2012: $22,933

Public undergraduate tuition rose 181% in real terms between 1982 and 2007, while public law school tuition shot up an astounding 300% over this same period, even though, again, total state funding for higher education increased by 55% over this quarter century. (There were 74 public law schools in 1982, and 80 in 2007).

Total state funding for public higher education is not, of course, the same thing as total state funding for public law schools. Perhaps law schools have received a smaller proportionate share of the increases in state subsidies for higher ed over the past 30 years.

Nevertheless, the overall numbers here are so extreme that arguments to the effect that increases in public law school tuition are in any significant part due to cuts in state subsidies are surely wrong.

The tuition puzzle

[ 74 ] June 17, 2014 |

This is the first of what will probably be several posts about the extraordinary increases in law school tuition over the past half century (In this as in so many other respects, law school is merely a particularly extreme version of something that has happened all across higher education in America).

First, some numbers:

Law School Transparency has done a nice job graphing what has happened to law school tuition since 1985, in both current and inflation-adjusted dollars. Private law school tuition has gone from just over $16K to just under $42K in 2013 dollars. Public resident tuition has gone up even more sharply, from $4,300 to $23,000, again in constant inflation-adjusted dollars.

These numbers are startling enough, but they obscure the extent to which by the mid-1980s tuition had already skyrocketed over the course of the previous 25 years. LST is using data the ABA posts on its web site, which only go back to 1985. Looking back to 1960, private law school tuition averaged around $7000 in 2013 dollars, while public law school tuition was perhaps a third of that, i.e., essentially nominal (These estimates are based on Harvard’s and Michigan’s law school tuition at the time. They assume that tuition at HLS was around 20% higher than at the average private law school, which has been the norm over the past three decades, and that Michigan’s resident tuition was typical of state law school resident tuition. If anything this latter estimate probably overstates public law school resident tuition in the 1960s).

This is, in the context of normal economic activity, a remarkable situation. People often speak these days of a “tuition bubble,” but a classic price bubble involves a sharp short-term run-up in prices, followed by an even more sudden collapse when the bubble bursts. For example, the US housing market was relatively stable between 1970 and 2000, with median home prices staying between $150,000 and $180,000 in real terms. The housing bubble featured a five-year run up, during which the median price rose by nearly 70%, before falling back to pre-bubble levels just three years after the peak.

By contrast, the law school (and to a somewhat lesser extent, the higher ed) tuition “bubble” has now featured more than 50 years of basically continual real price increases, with essentially no retrenchment. This has led to prices rising in real terms not by 70% in the short term, but rather by 500% for private law schools and 900% for public law schools — and in the long and continuous term.

Is there anything else in the contemporary economy that has featured similar sustained price increases? The only examples I can think of are the ownership interests in certain professional sports teams, some extreme high end luxury goods –paintings by famous artists and the like — and of course health care, in regard to which spending per American increased by 7.6 times in real terms between 1960 and 2009.

The markets in NBA teams and Klimt paintings involve a few dozen extremely rich buyers, whose behavior can be explained readily enough by concepts such as the declining marginal utility of income and the perverse attractions of Veblen goods. The market for law degrees involves more than 100,000 people at any one time, while that for higher education in general involves more than ten million simultaneous purchasers. Why are Americans willing to pay literally five or ten times as much, in real terms, as people paid two and three and five decades ago for essentially the same thing?

In the case of health care, the answers are by now well known, involving the profound distortions created by third party payment systems, in the context of the purchase of a good that often doesn’t allow for any meaningful price competition. Indeed it’s now universally acknowledged by disinterested observers that the American medical system is a textbook example of massive market dysfunction, leading to severe overpayment for a good that is provided by the medical systems of every other developed economy for a small fraction of the price, with little or no loss of quality.

In the case of higher education in general, and law school in particular, the answers are not as well understood, in part because until very recently the American higher education establishment had done a masterful job of selling the idea that higher ed was a “great investment” at almost literally any price. Only in the last few years has that idea begun to be questioned in any serious and sustained way.

In subsequent posts I’m going to look at some of the factors that have produced this increasingly destructive social situation.

Our man in Baghdad

[ 130 ] June 12, 2014 |

Hardened by years of battle in neighboring Syria, the Islamic State of Iraq and Greater Syria (ISIS) is routing the forces of a modern nation-state and gathering land with the ultimate goal of establishing an alternate form of governance, an Islamic caliphate.

“This is not a terrorism problem anymore,” says Jessica Lewis, an expert on ISIS at the Institute for the Study of War, a Washington think tank. “This is an army on the move in Iraq and Syria, and they are taking terrain.”

In capturing Tikrit, famed as the hometown of Saddam Hussein, Islamist militants whom the secular dictator had not tolerated were moving south down Iraq’s main highway toward Baghdad. Lewis cited reports that Abu Ghraib, the city just to the west of the capital, was also under assault from ISIS forces that have held Fallujah and much of Ramadi since January.

“We are using the word encircle,” Lewis tells TIME. “They have shadow governments in and around Baghdad, and they have an aspirational goal to govern. I don’t know whether they want to control Baghdad, or if they want to destroy the functions of the Iraqi state, but either way the outcome will be disastrous for Iraq.”

ERBIL, Iraq — Kurdish officials said on Thursday that their forces were in firm control of the strategic oil city of Kirkuk in northern Iraq after government troops had abandoned their posts, introducing a new dimension into the swirling conflict propelled by Sunni militants pressing south toward Baghdad.

“The army disappeared,” said Najmaldin Karim, the governor of Kirkuk, two days after militants aligned with the jihadist Islamic State of Iraq and Syria swept across the porous border from Syria to overrun Mosul, Iraq’s second-largest city, and then began a thrust toward Baghdad, capturing the town of Tikrit, the birthplace of Saddam Hussein, on Wednesday. The apparent involvement of Kurdish pesh merga forces drew new lines in the patchwork of allegiances and alliances, adding disciplined troops whose allegiance to the central government in Baghdad is limited. With its oil riches, Kirkuk has long been at the center of a political and economic dispute between Kurds and successive Arab governments in Baghdad

Suggested thesaurus for op-ed auto-column generation this week:

Resolve, dithering, Munich, plenty of blame to go around, leadership, surgical strikes, limited aid, Vietnam, Caliphate, exterminate the brutes, next six months.

Right-wing judicial activism, part 7,563

[ 115 ] June 11, 2014 |

A California trial court judge has decided that children in the state have a constitutional right to be exposed to an equal percentage of bad teachers, and that the relevant state statutes violate this right, because they provide for tenure decisions regarding teachers to be made after two years of employment, rather than three.

Sensing perhaps that “some” might consider this kind of thing to be legislating from the bench, the judge goes out of his way to point out that he’s just following the law, and that there’s no political component to his decision whatsoever:

This court stresses legal positions intentionally. It is not unmindful of the current intense political debate over issues of education. However, its duty and function, as mandated by the Constitution of the United States, the Constitution of the State of California, and the Common Law [wut?], is to avoid considering the political aspects of the case and focus only on the legal ones. That this Court’s decision will and should result in political discourse is beyond question, but such consequence cannot and does not detract from its obligation to consider only the evidence and law in making its decision.

(Emphasis and pomposity in the original)

Speaking of politics:

Students Matter, the non-profit that funded the multi-million dollar suit, is founded and primarily funded by David Welch. Welch made his fortune in fiber optics, first serving as CTO of SDL when the company went through a $41 billion merger with JDS Uniphase in 2000 and later founding Infinera.

In 2010, Welch founded Students Matter, claiming his “passion for public education arises from his roles both as a parent of three school-aged children and as an employer in two highly successful start-ups in Silicon Valley.” Students Matter was unique, as an investigation by Capital & Main discovered, because Welch “had virtually no background in education policy or any direct financial stake in the multibillion-dollar, for-profit education and standardized testing industries.”

However, Welch quickly cozied up to organizations and individuals that work to privatize America’s once-great education system:

Yet Welch and his nonprofit play a special role among a group of other nonprofits and personalities whose legal actions, school board campaigns, op-eds and overlapping advisory boards suggest a highly synchronized movement devoted to taking control of public education. The David and Heidi Welch Foundation, for example, has given to NewSchools Venture Fund, where Welch has been an “investment partner” and which invests in both charter schools and the cyber-charter industry, and has been linked to the $9 billion-per-year textbook and testing behemoth Pearson. Welch has also supported Michelle Rhee’s education-privatizing lobby StudentsFirst, most recently with a $550,000 bequest in 2012.

StudentsFirst also turned up on an early list of Students Matter’s “advisory committee” that included ardent education privatizers Democrats for Education Reform, Parent Revolution and NewSchools Venture Fund. Both StudentsFirst and NewSchools Venture Fund also appear on a list of Vergara supporters that includes the California Charter Schools Association, along with Los Angeles Unified School District superintendent (and onetime Vergara co-defendant) John Deasy and former Oakland Unified School District superintendent Tony Smith.

Meanwhile, Welch lives in Atherton, home to the most expensive zip code in America, where the cheapest house on the market in 2013—”a 1,194-square-foot, two-bedroom bungalow”—listed for $1.2 million. And Welch is in good company, with Eric Schmidt, Charles Schwab, and Meg Whitman all living in the Valley enclave. So with his own children facing no meaningful obstacle towards obtaining a first-rate public education, Welch “recruited” nine children primarily from low-income communities, “saying teacher job protections harm their ability to get the ‘adequate’ education they are promised in the state constitution.”

And that tactic, argued in court by a legal team co-led by George W. Bush’s Solicitor General Theodore Olson, paid off today in the courts.

Meanwhile, even the liberal Obama administration etc etc:

The ruling was hailed by the nation’s top education chief as bringing to California — and possibly the nation — an opportunity to build “a new framework for the teaching profession.” The decision represented “a mandate” to fix a broken teaching system, U.S. Education Secretary Arne Duncan said.

Cantor sings the blues

[ 221 ] June 10, 2014 |

House Majority Leader Eric Cantor loses the primary election in his district to this guy.

Apparently Cantor’s primary sin in the eyes of the Tea Party was being “soft” on immigration.

If Cantor accepts defeat (he could run a write-in campaign I suppose) this will reduce the number of Jewish GOP House members by 100%.

As of now, the general election is shaping up as a Randolph-Macon faculty throw down, with likely debate topics to include “The Atlantic Slave Trade: Historical Atrocity, or Pareto-Maximizing Market Solution?”

Hillary Clinton, Public and Private (selections from the unredacted transcript)

[ 99 ] June 9, 2014 |


Sawyer: Let’s talk about your family’s income after the two of you left the White House. Your husband has been paid more than $100 million to give speeches, and you’ve received two multimillion dollar book advances, as well as being paid $200,000 per speech. Does this seem . . . I’m searching for the right word here . . .

Clinton: Wrong?

Sawyer: Well not wrong, exactly, and of course certainly not illegal, but some might say it’s unseemly for public officials to profit from their time in office in this way.

Clinton: No, I’m pretty much going to go with wrong. It’s wrong, first, because it’s completely obscene that we have an economic system in which some people “earn” one thousand or ten thousand times as much income as other people. Second, while this would be wrong under any circumstances, it’s especially wrong because the people who earn $12,000 per year are usually doing something that has obvious social value, like taking care of children, or cooking food, or cleaning things that need cleaning, while the people making $12,000,000 or $120,000,000,000 per year are usually doing things like speculating in the financial markets, or giving banal speeches to people who speculate in financial markets — two activities that have no apparent social value whatsoever.

Or, to choose another example at random, perhaps they’re doing interviews like this one, in which a celebrity journalist who is paid $12,000,000 per year asks a celebrity politician questions written by someone else about the celebrity politician’s basically fake “book” — also written by someone else, needless to say.

Sawyer: This all sounds very radical, and not appropriate for a network audience. Why do you take the money if you feel this way?

Clinton: I don’t know — why do you take the money? Oh wait, I think I know the answer to my own question: because it’s there! But “because it’s there” doesn’t mean that it’s right that it’s there. It shouldn’t be “there” in the first place. Or if it’s going to be there, 70% or 80% of it should go to the government, just like back when the American Communist Party managed to get Dwight Eisenhower elected president.

Sawyer: Doesn’t saying things like this open you to charges of hypocrisy?

Clinton: Diane, we’re both part of the same hypocrisy.

Consumer fraud

[ 80 ] June 4, 2014 |

Ticketmaster has, pending final approval, settled a class action suit, brought on behalf of people who paid fees that, according to the plaintiffs’ allegations, were categorized in a fashion that made them appear to be actual transaction costs rather than profit to Ticketmaster.

On paper, the settlement is supposedly going to cost Ticketmaster around $400 million; in reality, it will cost the firm perhaps $20 million and maybe less than that. (Ticketmaster enjoyed profits of nearly $300 million last year, on revenues of $1.37 billion).

The settlement works like this: if you bought a ticket via Ticketmaster between 1999 and early 2013, you’re eligible to use a $2.25 discount code on your next purchase of a ticket via the firm. You get one discount for every ticket you bought, up to a limit of 17, so in theory you could receive as much as $38.25 in “damages.” The quotation marks indicate that these types of damages are pretty tricky entities, in economic terms.

The discount codes are in effect in-store coupons, which means that to collect your damages you have to buy more of what Ticketmaster is selling. Ticketmaster processing fees vary a great deal; a check of the Denver web site indicates that they can run anywhere from $7 to $19.95 per ticket. On average, a $2.25 discount appears to represent around a 20% savings on processing fees.

When you think about it, which needless to say everyone making money off this litigation strongly encourages you not to do, it’s quite unclear whether those discount codes that will be redeemed (which will end up being a small percentage of potential theoretical total, since most eligible class members won’t bother, either out of ignorance of this great “deal,” or unwillingness to invest time and effort to cash in on it) will cost Ticketmaster anything at all. The marginal cost to Ticketmaster of issuing another ticket to A Night With Lionel Ritchie must surely be close to zero, which means that lopping 20% off what it charges for that sale merely reduces the profit on the transaction — that is, assuming the transaction would have taken place anyway.

If on the other hand the availability of the discount code is what causes the purchaser to decide to buy the ticket, offering the discount code is increasing Ticketmaster’s profits in that instance. In other words, the plaintiffs in this case are to a significant extent actually paying for the “damages” they are putatively collecting, which means that the $400 million this is supposedly costing Ticketmaster is largely an illusion. Even on paper, the settlement only contemplates that Ticketmaster will end up issuing around $35 million in discount codes, and again, to a significant extent the codes Ticketmaster does issue will end up making rather than costing the firm money.

So who (besides, oddly enough, the defendant) is making money off this litigation?

(1) The plaintiffs’ attorneys, who are slated to collect around $15 million in fees, as well as a couple of million in litigation costs.

(2) Greenberg Traurig, which represented Ticketmaster.

(3) UC-Irvine’s new, wildly expensive, and totally superfluous law school, which is getting $3 million for — this is the kind of thing you could never put in a novel — its Consumer Fraud clinic. The $3 million represents a quasi-charitable cy pres donation by Ticketmaster, given to a deserving entity chosen by the judge. It would be fascinating to know how Judge Kenneth Freeman hit upon the idea of making UC-Irvine the object of his judicial bounty. (Here’s Dean Erwin Chemerinsky’s sworn declaration explaining why his institution should be allowed to wet its beak a little).

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