Thursday, December 13, 2007

Coach Contracts Need To Be Scaled Back

Show me the money! That's what Nick Saban said God knows how many times. And we have Les Miles, who didn't even need to change addresses to cash in on the insane world of college athletics.

It's hard to blame Miles, Saban or the assorted others who have cashed in on the big business that is college athletics (OK, I lied, ripping Saban is completely understandable). These coaches are just taking what the market will pay them. Well, I have a pipe dream I'd like to throw out in this forum. THE MARKET NEEDS AN ADJUSTMENT!

This week Tubby Smith, the hopeful savior of Minnesota basketball, finally inked his deal with the University which will earn him $1.75 million annually for seven years, not including incentives. That deal makes Tubby Smith the highest paid University employee. Tubby's contract, in the grander scheme of college sports, isn't outlandish, though it puts him in the highest echelon of Big Ten coaches.

Now back to college football, take a look at this USA Today piece that notes: This year, for the first time, the average earnings of the 120 major-college football coaches hit $1 million, a USA TODAY analysis finds. That's not counting the benefits, perks and myriad bonuses in their contracts.

Meanwhile, college professors earn on average $113,000 (Link, See table 4). A nice take too, certainly, but the gap between athletics and education at our universities is ever widening.

Most of us don't think twice anymore when coaches rake in the big bucks. Some economics guru tells us about supply and demand. We hear jargon like "market forces" and "competitive marketplace." So, we look the other way. But should we? In some instances, as this article from CFO.com points out, some of the spending is past on to students.

But as programs vie to outspend one another, many go deep into the red, forcing schools to raise student fees and seek new sources of support. (Texas is a rarity: its program is self-sufficient and usually runs in the black.) Indeed, although many schools have increased revenue by adding premium seating and charging for seat licenses and ticket guarantees, they haven't improved their financial positions much, if at all. Unlike in the corporate world, most universities don't bother to track the returns on their sports investments beyond the win column. Despite the myth of massively profitable college-sports franchises built on the backs of unpaid players, only a handful of athletic programs manage to break even without university or student-fee subsidies.
As sports fans, we like winning. Minnesota fans are overjoyed with Tubby Smith. Michigan fans wouldn't have blinked if their athletic department had made Les Miles a record-breaking offer. We can't begrudge these coaches, but we can tell our University presidents that enough is enough. At some point we should let college athletics be about the amaetur athlete again. And if that means coaches only make five times what university professors make, well, I would bet there would still be a long line of highly qualified people wanting to coach college athletics.

So, let's get rid of this "market forces" B.S. and put some blame squarely on the shoulders of our university leaders.

6 comments:

ScarletGopher said...

An interesting piece, PJS...

My gut reaction is agreement, but my hesitation lies in my wonder about how this issue is going to be addressed. Its difficult comparing the NCAA to pro sports, but the NHL certainly hit a brick wall with players' salaries in the early 2000's. Baseball salaries are skyrocketing. At what point will the market break?

There are lines of people that stretch as far as the eye can see that know more about economics that I do, but it seems that no NCAA athletic department is going to try and "start" this trend. I think they call that collusion. Avoiding collusion and going at it alone would be akin to stepping in front of a locomotive.

I guess I see your "why" ... but struggle when the "how" is so intimidating.

Dave said...

As an employee of the U, I can firmly say that the operational expenses of the athletic department are evaluated MUCH further then just the "W" column. Trust me on this.

That being said, the pay is ridiculously high, no one can disagree there.

PJS said...

I do believe that Dave. And the Big Ten schools should be credited for including on coaching contracts lucrative incentives for academic performance. Tubby's contract, it should be noted, includes numerous incentives in that area.

Scarlet, I'm not pretending to have a 'how,' other then to say that students need to voice a little displeasure once in awhile when their student fees grow. These same students will march and rally for sweatshops in Asia but are failing to step up for outrageous inconsistencies in their own backyard.

lonebadger said...

Yeah, good luck with that. Let me know how it works out.

ScarletGopher said...

PJS-

As a U of M student, I can say that the students rallying against sweatshops in Asia are not usually the ones that give a rat's behind about what's going on north of University Avenue.

I'm not sure that its as easy as you've portrayed it to connect coach contracts to student fees and rising tuition, which is one reason that students may not be complaining too much. The $25 per semester boost for the stadium is an exception to that idea, and we've seen lots of resistance to that on campus and in the Minnesota Daily.

thelandryhat.com said...

Hold on one dang second. If any of you were college coaches making $5 mil a year, I'd love to see you making these comments and making these posts. The only good point PJS--the Big 10s top blogger--makes is it is hard to blame the coaches.
What you fail to recognize in this post is a lot of these NCAA DIV 1 schools would be zip without the sports programs that bring in millions of dollars a year for various events and programs. You think Ohio State without the Buckeyes would bring in these students? You think the GYm team will?

The market is what we thought it was and I crown those coaches!