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January 8, 2010

Coaching Trends: Gettin' Paid

Last night's championship game pitted two of the best coaches in the country leading their teams in a contest for the sport's biggest prize.  Those two coaches, Mack Brown and Nick Saban, are also now the highest paid coaches in college football.  This year, they certainly earned those fat salaries.  Mack Brown recently signed a contract extension making him the first coach to earn $5,000,000 per year.  That contract also provides for an annual $100,000 raise over the life of the contract.  Saban's most recent contract was for $4.7 million.  Does anyone doubt that Alabama's administration will top Brown's contract when Saban gets back to Tuscaloosa and talks to Jimmy Sexton?

All of that got me thinking about coaching salaries over the past decade and where we are heading.  In 2001, Steve Spurrier was the highest paid college coach with an annual salary of $2.1 million.  Only Spurrier and Bob Stoops made $2 million or more.  Mack Brown, by the way, made $1.45 million.  Today, twenty-five coaches make over $2 million a year.  In 2001, there were 22 coaches who made over a million bucks a year.  In 2007, that was the AVERAGE salary of a BCS conference coach.

So, in eight years, the highest salary in the country more than doubled from $2.1 million to $5 million.  If that trend repeats itself, in 2017, the highest paid college football coach will make $11.9 million.  I repeat, $11.9 million.  If you think that is crazy talk, I remind you that the competitive pressures of the SEC are quite possibly at an all time high just as its member institutions are about to reap an enormous increase in revenue because of a new TV deal.  Salaries are only going to go up.

Forget the economics of these deals, which I fully appreciate (the coaches make a lot of money because they generate a lot of revenue and good coaching talent is in short supply with high demand).  Think solely of the political pressure involved in a state university paying a football coach $10 million at a time of university budget cuts or state financial problems.  Is this trend politically sustainable?  Chuck Grassley (R-IA) has already publicly questioned the tax-exempt status of the NCAA and college athletic programs.  I can easily see other politicians joining Grassley's nascent crusade if coaches begin to be routinely paid like Wall Street bankers.  There will be a bunch of other concerns: upset faculty and university administrators, the heightened incentives to cheat, and even the pressure to allow the athletes to benefit from the athletic revenue just like the coaches.  None of this, I believe, is good for college athletics.  There's got to be a political ceiling on coaching salaries, but we haven't hit it yet.  What happens when we do?

Where are we headed with these salaries and is it good for college football?

Quinton

15 comments:

SDawg said...

There is a lot of talk of how much revenue good coaches generate these days, but I have to wonder if that's necessarily true.

Fans will and have attended UGA games even during down or mediocre years. In many of the large institutions this is true regardless of the coach.

Understanding that a BCS bowl game pays big time, is there any other money generated by a "top tier" coach to a program that is really that different than what a Jim Donnan brought in (adjust for inflation, subtract Quincy Carter, and divide by 8 wins for a modern day number)? And if the BCS games are the primary source of increased income generation, shouldn't we be able to pretty easily quantify the revenue a good coach brings in?

Would love to know what I'm missing, which as usual is probably a lot.

Ryan Harris said...

Man, insightful stuff. The biggest issue I see is that with such serious topics being politically argued and the more money involved, the less focus on football.

What were coaches salaries on some of the first College teams? And I bet they had alot more fun...

I guess we shall see.

Ollllddude said...

Spencer, while it is true fans have gone to UGA games during ups and downs - they kind of have to do something with those RVs they bought during the up times and they want to see all their 'family' at the reunions - the money is being driven more by television and contracts than fans that attend games. I don't know if the coaches generate the money exactly, but it is arguably a more financially lucrative deal to win a MNC than it used to be, and taking a risk on buying the best coach is a big step toward reaping that reward.

That said, with all this money it does seem like they could do a little more for the athletes. I know they get their education and there is no desire on my part to have paid college athletes in the normal sense of the word, but having it all go anywhere but the kids is starting to seem wrong to me as well.

Valley Dawg said...

In general I don't think its a good thing for politicians to be messing with college sports but if the salaries are ever going to plateau or drop, there is going to have to be some outside influence.

Here in California there has been/will be an approximately 60% increase in in-State tuition costs at State universities in 5 yrs time. This coupled with a forced reduction in class offerings and enrollment leads to an upset public. Fresno State coach Pat Hill make ~$700 a year, peanuts compared to the salaries we are familiar with in the SEC and at "larger" schools but for a school that can hardly sustain itself, that's a lot of money. The public sees that number and thinks "Why would we pay a football coach $700k when we are raising tuition, reducing class offerings and furloughing professors because there is not enough money to operate normally."

One thing that might go hand in hand with salary reductions is the talk about making it so a school can't hire a coach from another university while the targeted coach still has games left. The Brian Kelly saga with Notre Dame was crap if you ask me. He should not have been allowed to leave Cincinnati with one game left in the season. I can't blame him for leaving but the timing of the hire was pretty crappy. What until the end of the season to jump ship. These type of situations will only increase the focus on coaching and salary.

Hobnail_Boot said...

Spencer-

I have no idea how to quantify it, but winning does equal more TV exposure, increased revenue in merchandise sales, and increased applications to the university (which in theory, should raise the value of a degree from that school).

CarolinaDawg said...

The NCAA can't regulate the salaries because the coaches would file an anti-trust lawsuit and win.

That said, with all the problems this country is having with a bad economy, rising deficits, higher debt balances, etc., I think Congress has more pressing issues to deal with than how much a college coach makes.

ecdawg said...

College football is an entertainment product. As such it is content for the entertainment providers, television networks. Demand for the product is increasing, therefore, providers will endeavor the supply more of it. In order to maintain demand quality of the product must be maintained. High profile coaches have entertainment value and are the quality control managers of the product. Compensation will rise to the point that they no longer add value to the product.

For the college football fanatic (if you are reading this - you are a fanatic)it is the best of times. Enjoy it.

80DAWG said...

it is what it is..... As a public school teacher for 30 years I have never been able to negotiate a contract. Our jobs are based on what the state is willing to pay. We have never made a tremendous amount of money. I love my job and work my ass off 12 hours a day because I want our kids to reach their dreams. It just isn't as sexy to know that I have increased kids tests scores year after year. Winning big ball games is very appealing. I do agree that the continued rise in salary and the focus on money may lead to negative outcomes for college football. Our players will continue to ask the question, "why am I not able to benefit from this windfall"? Yes, we provide them a full scholarship, but that in no way equals the money the Universities are socking in to the place. Folks buy the number 7, 47, 24, etc. jersey from the book store because of the players. It is a complex issue, but the money these coaches are making is driven by what we the consumers are willing to pay for tix and etc. It is what it is....

Anonymous said...

this ends when an athletic department buys an expensive coach, gets overextended, falls short on revenue projections, and has to be bailed out with the institution's general funds.

oh, wait--that happens all the time already. . .

Dawgaholic said...

(1) 2008 - donations scores of over 10K to get season tickets.
(2) The 90s when no donation was required to get season tickets.
(3) Two of the most profitable years for the UGA athletic department were after SEC titles.
(4) 2009 - donations scores of well under $5000 to get tickets.

I'm not sure why coaches don't get paid more sometimes.

Sam, Dawg Fan said...

Valley Dawg, your comment about Kelley is interesting, but it makes little sense for him to be at UC from UC's perspective. For one thing, he is going to be torn between his duties as a coach and his responsibilities to serve as ND's coach. He will be distracted (see Mark Richt for an example).

If the whole collegiate recruiting calender were changed it might be possible, but with a month between the last game a bowl game (in many cases) it seems strange to have the Notre Dame coach coaching Cincinnati. Heck, in effect it could serve in ND's interest to have him stay and win and thus get more recruits interested.

I think if you have a lame duck coach (whether fired or moving on) then it is better to just let him go (retirements aside). It also gives the interim coach a chance to prove himself for the job.

I remember when Michigan was heading to the Final Four and Bo Schembechler let the basketball coach go because he did not want an Arizona State man coaching Michigan.

Valley Dawg, there is nothing wrong with reducing class offerings in colleges. Have you looked at a catalog lately? There is plenty of fluff in there to cut. Smaller enrollments are not a bad thing. Too many kids are at 4 yr colleges that cannot do the work or will leave when they realize they cannot do the work (or are not allowed to return because they show they cannot do the work).

Hobnail Boot: do you have stats that show an increase in applications and the revenue generated? It might be great if 50,000 students pay that application fee rather thatn 25,000 but you are only going to still accept 5000. That is revenue from 25,000 (how much does it cost to apply these days?). However, you cannot necessarily take in more students without an increase in infrastructure or teaching positions. Each student who attends classes has a cost associated with him/her.

I guess that if you want to rank high in some areas of the silly college rankings then getting more applicants and accepted fewer of them will make you look good.

Turning out more graduates however does not increase the value of the degree. UGA has not risen in academic rankings because of the football team's success. It has risen, in part, because of the HOPE scholarship keeping smart kids in state and spending on buildings and academic programs.

Sports add to the campus life and schools can be good academically and in sports (Michigan and Stanford, for instance).

Actually I think too many people go to college, but that is an argument for another time.

Anonymous said...

This was a great read Quinton.

Paul said...

Sam,
Just like you mention with the HOPE scholarship, the value of the degree goes up because the university can be more selective with a larger applicant pool. More selective = best and brightest are the only ones attending the university.

The increased value isn't really the marginal increase in $50 application fees. It's the better quality product [students] that it can produce.

Valley Dawg said...

Sam, Dawg Fan: I should clarify. I don't think Brian Kelly should have stayed at Cincy after having accepted the job at Notre Dame. He accepted a job at another school, even if he wanted to coach the final game I don't think Cincy should have let him. I would rather see changes in the system that would've made it so that Notre Dame couldn't have talked to and subsequently hired Kelly until Cincy's season was over.

In regards to dropping classes, etc., I wasn't saying that it is right or wrong, I was just pointing out that there is pressure from the majority of residents/students that don't care about college football and think that $700k is too much to pay someone to coach football in a public university. That pressure could lead to some forced changes in the system.

I agree that college sports makes university life better. It certainly did during my time at UGA. However, I am now in a region of the country where I think the majority of people don't think the same way in regards to their local university. As stated above, these are the people who will likely force a change in the system.

Chris said...

The stats are a little deceptive because there's no comparison to how much salaries for other high-end professionals have increased over the same period. I'd be willing to bet that, say, partners at top law firms or accounting firms or senior F500 executives have seen a similar increase over the same period.

 
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