That's obviously not how things work.
Michigan had to pay Jim Harbaugh enough not to take an NFL job.
Ohio State is paying Ryan Day like a guy who had no previous coaching experience.
Bobby Bowden is one of the greatest coaches of all time. So should MSU pay him $10 million a year right now? Obviously not. If you pay for what someone did, rather than what you think they will do, that's where you make terrible management decisions.
MSU was left coachless in February. The guy who they thought took the job, changed his mind, so they had circle back to a guy they had "interviewed" while he openly knew he wasn't getting the job. They had to give him the money to jump ship in February, and enough money to get assistants to do the same.
MSU is in a division with 3 of the biggest spenders in college football. Even if they are overpaying now, the signal it sends is that they are taking it as seriously as UM, OSU and PSU. The optics of that alone, in the eyes of assistants and recruits, helps make it worth it. And it sends a signal to season ticket holders. I personally know of three people who weren't planning on renewing their season tickets, who now are. Did you see the crowds against Illinois? Against Maryland? The stadium was empty.
