Are Coaches Overpaid?
As a follow up to last week’s article, I thought it might be nice to take a look at coaches salaries in relation to their coaching ability. For this purpose I used Athlon’s coach rankings along with the head coach salary list published by USA Today. As we know being the head coach of a major college football program is accompanied with an intense pressure to produce so the thought of college coaches making exorbitant salaries should not come as a shock to anyone. While all of us gritch about these salaries when our teams lose a big game, the free market system dictates these amounts and these salaries are not set for one game, but for multiple games over multiple years. Actually given what CEO’s of major corporations make or for that matter members of the entertainment field, the pay for a coach at a major university is a drop in the bucket. The $4.5 million dollar Bob Stoops salary that increases to over $5 million with his incentive package is simply in line with supply and demand economics and the amount of revenue he brings into the university. At the same time, it is also a legitimate expectation for these mega-millionaires to produce wins on the field each year. As you will see from the information I have provided below, not all coaches live up to their lofty salaries. The reasons for this vary, but four of these reasons include: the longevity of the head coach at the university, the proclivity of long term contracts for college football coaches in today’s college football world, the wealth of the athletic department itself and finally, the loyalty factor.
In the case of the most overpaid, overrated coach in America, the reasons are a combination of first three factors. Mack Brown is ranked #28 among Division I schools by his peers, but ranks 2nd only to Nick Saban at Alabama in terms of pay. Mack’s $5.4 million dollar salary compares to Saban’s 5.5 million. The richest athletic department in America at $150 million per year gave Mack a long term contract following the Vince Young national championship year. Adding to the UT dilemma is the fact that the contract rolls over at the end of each year making the buyout amount substantial. Of course this is all good news for the Sooners fans as OU has owned Texas under Mack over the years. The only downside here is that the third variable, that of university wealth will eventually be in play at Texas. With plenty of T. Boone Pickens of their own, UT is likely to buy out Mack’s contract, regardless of the cost after another mediocre year. All the more reason for Sooner fans to root for Texas over the Cowboys.
Another notable example and one that I have never figured out is that of Kirk Ferenz at Iowa. Iowans are not known for throwing away their money, but this has been the case for 14 years. Remember when Ferenz was all the rage. Stoops and Ferenz were rumored to be finalists for the Iowa job some 14 years ago when Iowa hired the up-and-coming Ferenz. While Stoops has led OU to a national championship and a 80% winning percentage during his time at OU, Ferenz has barely kept his head above the .500 mark. This guy rakes in $3.8 million per year for an incredibly mediocre performance. Again the long term contract trap is likely to be blamed here as a former AD is likely to have locked Ferenz into a long term, rollover contract. What really hurts a team like Iowa is that in order to pull the plug on a head coach, a program must be willing to sacrifice a recruiting class which can be devastating to a football program like Iowa. I suspect this is the only thing keeping Ferenz alive in Iowa City.
On the opposite side of this ledger is Bret Bielema , the new hire at Arkansas. Bielema is ranked #25 on the Athlon list of outstanding coaches, not astronomical, but still a lot higher than his .9 million per year would suggest. The Federal government should hire the Arkansas AD to run its financial affairs. Grabbing Bielema away from Wisconsin for this price was a steal. Some said that Arkansas lacked style points in hiring Bielema, but in the long run I suspect that Arkansas and Bilema may have the last laugh. Arkansas needed a solid coach after the Petrino/John L. Smith train wreck and Bielema came to Fayetteville at a bargain basement price. The truth be known is that Bielema realized he would never be in charge at Wisconsin as long as fan favorite Barry Alvarez was prowling the sidelines. He also realized that Wisconsin would always be playing second fiddle to Big Ten bullies Ohio State and Michigan. With nothing to lose, he opted for Arkansas and a pay cut. With an SEC type schedule that allows Arkansas to play eight home games a year, winning seasons can be assured. Blue chip players are flocking to SEC schools so an infusion of talent can be expected. Not lost on Tulsa area Razorback fans which are plentiful is the fact that Fayetteville is only an hour from the Jenks/Union/Broken Arrow recruiting fields. Arkansas has some of the most rabid fans in America and an 8-4 season will turn Bielema into a folk hero at which time he can name his price.
Finally, while the first three variables are the most prominent regarding head coach salaries, there is one exception to the rule. Bill Snyder and the loyalty clause provide that exception. Ranked the 3rd best coach in America, Snyder’s salary is a mere $2.2 million dollars per year. Putting this into perspective 47 Division I coaches make more that the silver fox. The truth of the matter is that Bill Snyder is never leaving K-State and that for him the money is immaterial. Moving to K-State from Iowa over 30 years ago, Snyder credits Kansas State for giving him his first chance and he has repaid that fact with his undying loyalty. It is likely that Snyder was persuaded by the athletic department to take his latest pay bump that raised his salary to just over the $2 million a year. In a strange twist these moves tend to elevate the status of both the coach and the athletic department.
Finally, back to the original question; are college coaches paid too much? Ninety percent of the time, the answer to that question is no. The actual financial return to the university from a solid head coach is hundreds of times the cost of the coach’s salary. Football is big business, a business that not only pays the bills for football, but also the bills for the entire athletic department. The NCAA requires a minimum of 16 sports for a university to be classified Division I. In many cases universities double that number of sports. With the exception of an occasional basketball program, none of a school’s athletic programs come close to paying for themselves. Football picks up the tab for all these sports. Just as importantly, a high profile football program generates donor money that pays for facility improvements for all areas of the university.
Not to be lost in the shuffle is a university’s endowment fund that can run into the billions of dollars. The same goes for public and private research funds that can flow into a university’s coffers. Endowment and research fund accounts are greatly enhanced by a high profile football team. Finally for those universities not blessed with large endowment and research programs, year to year college enrollment can be positively impacted by winning football teams. Studies have been conducted that indicate that a winning football season can provide up to a 6% to 10% enrollment increase in the fall which will put additional funds into university coffers. Putting this percentage into perspective it can be expected that Oklahoma State six winning seasons in a row may have generated an additional $50 million dollars in revenue. In cash strapped state like Oklahoma that is a lot of extra cash.
It is obvious that winning football coaches can more than pay for themselves. All the more reason for the high mortality rate of head football coaches today.
Coach Ranking/Pay Comparison …
(amounts do not include incentive bonuses)
(Big 12 coaches in bold print)
Rank Salary Coach
1. ($5.5 million) Nick Saban, Alabama
2. ($4.3 million) Urban Meyer, Ohio State
3. ($2.2 million) Bill Snyder, Kansas State
4. ($2.4 million) Brian Kelly, Notre Dame
5. ($3.6 million) Steve Spurrier, South Carolina
6. ($2.0 million) Chris Petersen, Boise State
7. ($4.5 million) Bob Stoops, Oklahoma
8. ($ .5 million) Bobby Petrino, Western Kentucky
9. ($2.4 million) Frank Beamer, Virginia Tech
10. ($3.5 million) Gary Patterson, TCU
11. ($2.9 million) Mark Richt, Georgia
12. ($1.3 million) Pat Fitzgerald, Northwestern
13. ($2.2 million) Art Briles, Baylor
14. ($3.0 million) Brady Hoke, Michigan
15. ($3.3 million) Mike Gundy, Oklahoma State
16. ($2.4 million) Kevin Sumlin, Texas A&M
17. Private school James Franklin, Vanderbilt
18. ($2.3 million) Charlie Strong, Louisville
19. Private school Al Golden, Miami
20. Private school David Shaw, Stanford
21. ($1.3 million) Mike Riley, Oregon State
22. ($1.5 million) Rich Rodriguez, Arizona
23. ($2.6 million) Dan Mullen, Mississippi State
24. ($3.9 million) Les Miles, LSU
25. ($ .9 million) Bret Bielema, Arkansas
Other notable coaches…
28. ($5.4 million) Mack Brown, Texas
32. ($2.5 million) Paul Johnson, Georgia Tech
35. ($2.8 million) Bo Pelini, Nebraska
36. ($2.5 million) Will Muschamp, Florida
37. ($2.8 million) Jimbo Fisher, Florida State
38. ($1.6 million) Paul Rhoads, Iowa State
39. ($2.5 million) Larry Fedora, North Carolina
42. ($2.7 million) Gary Pinkel, Missouri
50. ($2.4 million) Dana Holgorsen, West Virginia
60. ($3.8 million) Kirk Ferentz, Iowa
66. ($2.1 million) Clff Kingsbury, Texas Tech
106. ($2.5 million) Charlie Weis, Kansas