==> Nothing you said really, but considering that they are not there to win but to get a share of the revenue and all they need to do is show up, it strikes me as a participation award.
You're making an invalid assumption. They are there to win, and sometimes they do. They know their odds aren't very good, and they know their opponent is better, but that doesn't stop them from going out and giving everything they've got to win. Because if they do, that's the biggest win most of them will ever experience, and that reward will stay with them for the rest of their lives. Oh, they are playing to win.
==> Is this money changing hands true in High School football as well?
I do not know the game financial arrangements between public high schools in Texas.
I know that Texas categorizes their high school into divisions based on the size of the school, as does every state that I'm aware of, and apparently as does your home town. That's the normal way to do it.
Aledo High School and Western Hills are both class 4A high schools with enrollments of approximately 1100 and 1500 (grades 9 through 12) respectively, and they play in the same district. Aleda, despite being the smaller school, just happens to have a powerhouse team this year, and they're beating everybody in the district by big scores. A couple of years ago, Western Hills won the district. Sometimes, things just work out that way without anything nefarious being afoot.
==> There would never be such a disparity of talent.
Actually there can be. It's very unusual, but as in this case, a rare collection of talent comes together at the same place at the same time. That doesn't mean the system is broken; it means that this is an anomolous year. It happens - not very often - but it happens. And the investigation into Aledo seems to bear that out.
The conversation you had with your son is great, and right on the money. As I said in an earlier post (25 Oct 13 9:56), what you do after a loss may be more important than what you do after a win. Yes, he's understandably bummed about missing the playoffs, which is a perfectly natural and normal feeling. Your son's answers indicate that he feels they could have done better, that they could have won more, and that's a healthy feeling. I hope that next year he puts force the effort to reach that goal, and he'll be a year better. And if he does and makes the playoffs (and I really do hope he does), it will be that much sweeter for him because he knows how it feels to not make them. If he does make the playoffs, I hope you ask him to compare the feelings of making the playoffs vs the feelings of missing the playoffs. I highly doubt he'll answer that it's about the same because it wasn't about winning and making the playoffs; it was just about playing and having fun.
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Good Luck
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