He knows USC is private, he states as much in the video.
He is not saying there is any kind of direct revenue from the state to the school. He is saying that USC benefits from being in a large and rich economy. Both USC and Miami benefit and contribute to very large economies and yet both are trying to be as cheap as possible.
Merely being in a large and rich area doesn't mean that money is filtering down to you. It's a flawed premise. Then again, it's obvious that Colin doesn't understand WHY USC has failed with most of their hires in the last 3 decades, outside of Carroll. He also doesn't understand how and why Miami has failed in regards to their hires for the last two decades as well.
USC, for DECADES have relied on ex letterwinners with no managerial experience to run their athletic department and you've seen the results. Their searches are usually extremely political and "Trojan Family" inspired. That's why Sark and Kiffin got hired with minimal searches, and they just promoted an interim in Helton. This is the problem. SC, despite having a very healthy budget and outstanding alumni support has been poorly managed by people that probably shouldn't be allowed to run an athletic department. Bohn is the first PROFESSIONAL AD they've had in decades. Don't be shocked to see that their search process is a lot better managed than under guys like Garrett, Haden or even Swann.
Miami on the other hand has failed because 1)This program has been poorly managed for years 2) Bad Luck with some of the rational hires that were made and 3) A smaller margin for error, due to budgetary restrictions. Unlike SC, Miami has hired some professional ADs in Hocutt and Eichorst. That said, Hocutt left pretty early on(He's found some success at TTU and is highly respected) and Eichorst refused to adjust to what the Miami job required(He then went to Nebraska and flamed out spectacularly). James received the job because it was obvious that he wasn't a climber and he was going to stay long term. That was a stupid rationale for hiring him and you see why he isn't going anywhere unless frog marched out at the point of a bayonet: He isn't leaving because he isn't any good. Miami has made multiple hires, only two could be considered rational. That limits your success probability right there. Diaz, Coker and Shannon were hires that were unlikely to succeed. You can't hire first time HCs at a unique job like Miami and expect success. There's a reason why Butch is the only coach to be even decent in the role, without previous HC experience and they had to go pretty deep into the well before he was even a legitimate candidate.
When you make 5 hires, and only two should have even been considered for the job in the first place, that's not good. No one bats 100% on these things, because most hires are somewhat of a crapshoot, unless you go out and overpay for someone that is as close to a sure thing as you can get(Nick Saban/Urban Meyer), you want to give yourself a good shot.
Both USC and Miami have the same problem, they haven't made strong AD hires in a long time. Miami should have gone after a good AD after Eichorst, but the powers that be sat on their *** and made a politically expedient hire. That's a theme throughout the athletic department, making hires not because the person is qualified, or even good, but because doing a legitimate search takes time and effort. Far too often, people are moved up into roles they aren't qualified for, just because they were there to begin with. Not an accident that our athletic department directory is full of people that are glorified interns, instead of experienced, talented people. The BOT has failed to oversee the department, and as talented people have moved on to better jobs, they've allowed Blake to put a bunch of yes people around him.