Rising academic salaries for coaches

by on May 12, 2013 at 12:15 pm in Education, Sports | Permalink

Even during the recession, salaries for athletic coaches at colleges and universities continued to increase.  For instance in the SEC, between 2006 and 2011, “football coaching salaries increased 128.9 percent, from $3,147,149 to $6,928,989.”  This is an extreme example but it reflects a more general pattern:

That big-time coaches earn more than professors may not be a surprise, but a new study documents the striking extent and longevity of the gap: Coaches’ salaries increase year after year at much higher rates — even as many colleges say they are engaged in belt-tightening across they board — and that pattern is driven by the institutions with the largest athletic programs.

…Athletics is tied much more closely to the commercial marketplace than all other parts of a university, Hirko said, which is why salaries and other expenses continue to rise at rates seemingly independent of the rest of the institution.

The full story is here.  Here is a must-view map on the highest-paid public employee in each state; what have Montana, Alaska, and Delaware done wrong?  (No wonder those states have so few people!)  And New Hampshire is beyond the pale.

1 JP May 12, 2013 at 12:28 pm

Ha! Even before opening the map I new New Hampshire would be Dick Umile.

2 mw May 12, 2013 at 12:39 pm

More evidence that elementary school teachers are getting way too good of a deal. We’ve gotta cut them down to size.

3 mw May 12, 2013 at 12:42 pm

Of course if this were going to get the same “fair” MR treatment as the total snow job we got about CEO salaries, we would ask how much money the sports teams bring in for the universities and, as a result, how much less public money they need overall. And then attribute it all to the coach, like we do for the CEOs.

4 Trajan May 12, 2013 at 1:30 pm

+1000

5 Urstoff May 12, 2013 at 2:24 pm

The money the big sports bring in is used to subsidize sports that don’t make money. I’m not sure how much of it (if any) ever goes to non-athletic uses.

6 Kevin May 12, 2013 at 8:42 pm

The reality is that very few big time basketball or football programs actually run in the black. Most of them lose money. Those that do, as Urstoff mentions, end up subsidizing athletic programs that lose money. Here’s a quote from a study by Getz and Siegfried: “In 2007-08, for example, only 25 of the 119 Football Bowl Subdivision universities in the NCAA ran an athletic department surplus. Individually, a majority of football programs failed to cover their operating costs from 2004 to 2006 (Fulks, 2008). If capital costs and an allocation for general university overhead (e.g. administrative time, security costs, etc.) were included, the financial results would look even worse. ”

I believe the numbers are similar for basketball — outside of big-time Division 1 BB schools, they ALL lose money. And in the most recent NCAA study, NO other sport outside basketball and football in major institutions generated surpluses. The “fair” treatment would be to ask, why at a time when tuition is increasing astronomically should students and parents and taxpayers subsidize semi-professional teams with university names?

7 Andrew' May 13, 2013 at 5:13 am

The oddity is 1. that universities are considered public employers and 2. that these “public” universities run professional sports teams that don’t pay the talent.

The rest is just emoting.

8 Brian Donohue May 14, 2013 at 10:35 am

Good point. The whole perverse system stinks to high heaven…

http://www.theatlantic.com/magazine/archive/2011/10/the-shame-of-college-sports/308643/?single_page=true

As far as the coaches, I reckon they earn their keep as well as the typical professor.

9 Dana May 13, 2013 at 2:09 pm

It is generally understood that athletic programs do not bring in revenues that benefit the academic side of universities in any meaningful way for reasons that Urstoff and Kevin raise. However, successful athletic programs (football and basketball) are useful as an alumni fundraising device. Exactly how much money universities raise this way and how much is attributable to the sports teams specifically is very difficult to quantify and is likely limited primarily to those teams that are consistently very successful.

10 mw May 13, 2013 at 9:06 pm

Yes, unlike the CEO of Lehman who, we can be certain, earned his keep because it was given by the free market.

11 A Librarian May 12, 2013 at 12:49 pm

Are there any studies that really prove the financial success of universities with highly paid coaches? I’m curious because I work for a small, rural community college. Our athletic department is completely volunteer-run and we compete against various other volunteer teams in the community. It’s a very fun model and our staff and faculty are paid relatively well (as staff, I make slightly above the national average for my position.) Our money goes straight to education, staff, and facilities and tech.

It’s great to see our staff and faculty paid well and to know that we focus on academics, but how does it pay off in the long run? We do not receive any huge endowments, we do not have a very active alumni association. It’s kind of a moot point to just compare one salary to another. I would much rather see a study that looks at long-term comparisons of well-known universities that pump money into academics versus universities that don’t. How active are their alumni? How much recognition do they get for athletic successes? What kind of endowments do they receive? After ten, fifteen, twenty years, do highly-funded athletic programs pay off for the university? Do highly-funded athletic programs act as magnets for better professors (and presumably better scholarship?)

Thanks for getting my curiosity up – I’ll have to see what is out there on the topic!

12 Nick May 12, 2013 at 12:51 pm

That map has since been updated to reflect that in CT, it’s the women’s basketball coach. Current version: http://img.gawkerassets.com/img/18n60kp6w6189png/k-bigpic.png

13 Tom May 12, 2013 at 12:52 pm

Sport triumphs over Science.

14 Vernunft May 12, 2013 at 2:20 pm

Zero-sum fallacy triumphs over innumerate person.

15 Tom May 12, 2013 at 2:28 pm

Sport is zero-sum. Science is a positive sum game because it produces economic growth.

16 JWatts May 13, 2013 at 10:00 am

Economics 101 Fail. Sports, just like any other economic activity, is not a zero-sum game.

17 Jim May 12, 2013 at 1:34 pm

If they mapped which college employee generates the most revenue in each state, it would be coaches is all 50.

This is just the rational result of having public colleges running giant sports businesses.

If we didn’t have college sports generating revenue, who thinks professor salaries go up as a result?

18 john personna May 12, 2013 at 1:40 pm

I thought the data was that only at the top schools do athletics enjoy positive cash flow: “all but 14 of the 106 schools in the NCAA’s top athletic division (FBS, formerly IA) lost money in 2009. ” link

19 Anon May 12, 2013 at 2:37 pm

That’s overall athletics departments. Mens basketball/football (and to a lesser extent hockey/baseball) are mostly all revenue-positive for schools/ADs from what I’ve read.

20 Kevin May 12, 2013 at 8:55 pm

Read the actual studies. About half of Division 1 BB/Football programs, looked at individually, run in the black. Only a small minority of large school athletic programs overall run in the black. The way I read the NCAA’s own report, all individual athletic programs outside BB/FB (includes hockey) run deficits. Most Div. 1 schools, and virtually all smaller universities, run athletic departments in the red. And the difference between the small number of profitable schools and the large number of money losers is growing rapidly. This is data from 3 years ago. Coaches salaries continue to mushroom, so these numbers are only getting worse.

21 Jan May 12, 2013 at 4:20 pm

I agree with John that all of the money from revenue-positive college sports just goes back into the athletic department. At schools that do make some money, that profit allows them to subsidize non-revenue sports and build fancy athletic complexes. I’m not saying those are without value to the students and university overall, but it isn’t related to education.

Also, who can you really attribute the sports revenue to? I’d say it has way more to do with the unpaid athletes than the coaches. If you looked at how much money a big school sport, say University of Texas football, brought in 1995 compared to their football revenue now, I bet you would find that the coaches’ salaries have increased at a much faster clip. They should pay the student athletes. Make them go to school, pass all their classes, yes, but pay them.

22 mike May 12, 2013 at 5:05 pm

The coaches are paid so much because they bring in the athletes. If you can’t pay the athletes, you compete for them in other ways. Paying the athletes would eliminate this problem, obviously, but that takes us one step closer to admitting that there’s zero educational purpose to any of this.

23 Kevin May 13, 2013 at 1:01 am

So professional coaches aren’t paid much? Doesn’t seem to be the case.

Having followed college sports for years, it appears that a great coach has a far bigger impact on the success of the team at the college level than at the professional level. The main driver of the coaching pay seems to be satisfying alumni, not generating revenue (which college sports definitely do not) or attracting players. Alumni want to win championships if possible, or at least beat key rivals. Having good or respectable teams is part of the picture. Only a handful of elite coaches are reasonably able to win championships, and they command a premium. Good coaches that can beat their rivals also make out like bandits. The rest of the coaches benefit from this inflated market. I don’t see how paying players would do anything to change this, but it would certainly guarantee that the tiny number of profitable ADs would go to zero.

24 TB May 13, 2013 at 1:46 am

I wonder if college coaches are mainly acting as a sort of Schelling point for good players. There is no player payroll to spread out the distribution of good players like there is in professional leagues, so good players mostly want to play on good teams with other good players. You could even imagine a simple model in which coaches provide no intrinsic sports value at all, but some few coaches will randomly become known as “the guy other good players try to play for” and they will henceforth always field great teams. This would explain why college coaches often do poorly when they are hired by professional teams, and does anybody really think Joe won’t-use-a-headset Paterno was a great football mastermind into his 80s? Note that Universities would still be rational to pay huge salaries to these coaches.

25 Karen Lingzi May 18, 2013 at 4:48 am

You claim that “the coaches are paid so much because they bring in the athletes.”

But this isn’t a rebuttal to Jan’s foundational point that sports revenue “has way more to do with the unpaid athletes than the coaches.”

The actual work involved in making a football or basketball team attractive to fans, to boosters, and to donors is the work of the unpaid athlete-students doing the day-to-day work of practicing and playing the game on the field.

26 KLO May 12, 2013 at 1:35 pm

College sports is basically a zero sum game that has a small number of very lucrative programs and a much larger group of money-losing programs trying to get there. Colleges pay coaches a fortune not because the average coach is worth a fortune, but because a great coach under the right conditions can elevate a program into the lucrative tier. And if you are not paying your coach a lot, he must not be very good. Thus develops an aspirational approach to paying coaches that is justified by the mere possibility that a program could become lucrative.

27 Kevin May 13, 2013 at 1:03 am

Nailed it.

28 Andrew' May 13, 2013 at 5:16 am

Kind of like academia itself.

29 Neal May 12, 2013 at 1:43 pm

Rising “academic” salaries for coaches

There, fixed the title.

30 prior_approval May 12, 2013 at 2:17 pm

Anybody interested in GMU salaries is welcome to use this link – http://www.collegiatetimes.com/databases/salaries/george-mason-university-2011

Though it is hard to know how long such information will remain available as a link here, even when only generically linked. Though it is notable that the site posts this –

‘Disclaimer: The Collegiate Times displays salaries from public universities in accordance with their states’ Freedom of Information Act. We will not remove a name for any reason unless there is a factual error. All data is requested from each school in its entirety, so any error likely reflects a bookkeeping problem by the school.’

In other words, this is public information which, at a minimum, every citizen of the Commonwealth of Virginia is fully entitled to have.

31 thehova83 May 12, 2013 at 4:19 pm

Apparently they didn’t pay James Larranaga enough. He’s now at Miami.

That being said, congrats to GMU on admittance into the A10.

32 DM May 12, 2013 at 2:24 pm

In Arizona, the University of Arizona basketball team generates about $20M in revenue per year, given or take $1M. The basketball coach, Sean Miller, makes about $2.3M in salary (he has other variable comp and gets comped by Nike as well). The program was built by Lute Olson, but his last years were tough, and a lesser successor would likely have had a significant impact on revenue. Good players come to Arizona more so for Miller than past tradition, so while the institution has an impact, it’s not as significant for Arizona as it is for a UCLA or North Carolina. Point being, at Arizona given it’s lack of local talent and long-term tradition, the coach is very important to overall success. All in all, Miller’s a bargain and was offered much more by NC State and Maryland.

Not all programs are as successful, or as reliant on their head coach, as Arizona Basketball.

33 thehova83 May 12, 2013 at 4:23 pm

As a Xavier University alum, I can say that Miller is well worth the money.

You are 100% correct. Especially in college basketball, the coach, by himself, almost outweighs conference affiliation, past tradition, facilities, etc. I’m pretty sure that Calipari could win a championship at George Mason.

34 Anon UD Grad May 12, 2013 at 2:45 pm

Delaware only has two public schools, UD and Delaware State. Neither are D1 schools so their coaches don’t pull that kind of sway, and UD had to pay current University President Harker a boat load of money to stop being the dean of Wharton

35 buddyglass May 12, 2013 at 6:25 pm

Are college coaches even public employees? I know that at my alma mater the athletic department’s budget is entirely separate from the university’s. The coach is employed by the athletic department, not the university.

36 Mike H May 12, 2013 at 9:09 pm

America’s obsession with sports especially football is a serious burden on the global competitiveness of American economy. None of those mega football stadiums and million dollar paying NFL players will ever earn a single dollar from foreign consumers, because no on in the world except Americans would pay money to watch American football. That is the harsh reality.

I am surprised that few if any people have come up with a study of the effects of football spending on the US college tuition. Higher education in UK and Australia cost a fraction of what it takes in America simply because their schools actually get to spend the most of their money on hiring professors and tutors and expanding classrooms. More and more international students are studying there instead of here because they don’t want to pay 35,000 on tuition when 25,000 of that money goes to a sport they either don’t care or never heard of.

37 buddyglass May 12, 2013 at 10:13 pm

Unless my alma mater was an anomaly, which I suspect is not the case, tuition money doesn’t fund athletics. The athletics dept. at my school had an entirely separate budget. The two main ways that it may have negatively impacted serious students: 1. wealthy almuni often chose to give money to the athletic dept. instead of to the school itself, and 2. scholarship athletes, some of whom wouldn’t have been admitted otherwise, took spots that might have gone to other students.

“no one in the world except Americans would pay money to watch American football.”

Not really true:

http://en.wikipedia.org/wiki/NFL_International_Series#Game_history

I’ll cede that “no one in the world except Americans would pay money to watch American football at the rate Americans are willing to pay money to watch American football“.

38 rpl May 13, 2013 at 12:57 pm

I don’t know about your alma mater specifically, but most athletic programs receive transfers from the university’s general budget. The budgets may be separate to some extent, but that does not prevent transfers between them.

Here is some data and commentary on sports revenues at universities:
http://conversableeconomist.blogspot.com/2013/05/college-sports-expenses-rise-with.html?spref=fb

Notice that even amongst the schools in the top quartile by athletics revenues, where the median generated revenue actually exceeds the median operating expense, there is still a substantial allocated revenue. That’s the transfer from the university’s general fund. That means that when athletics programs proudly announce that they are “donating” $X million to the university’s academic mission, much (in many cases all) of that money is just returning what the university gave to them in the first place.

The more you look into the data, the harder it is to escape the conclusion that college athletics is almost always a money-losing enterprise. It may well be that a high-profile athletics program brings the university intangible benefits that make it worth the cost. If so, then the universities should be making some attempt to quantify those benefits, instead of falling back on the obviously false claim that the athletics programs are money-makers.

39 buddyglass May 13, 2013 at 2:50 pm

Checked out the NCAA report but unfortunately it didn’t have data for individual schools. I may poke around their website to see if I can find a publication that does. If any athletic dept. is a likely candidate for not taking money from the University, my alma mater’s is probably one of them. (Texas-Austin).

When evaluating the cost to the university of “allocated revenue”, how do we figure in the money that flows back to the university from the athletic dept. in the form of athletic scholarships? One could (quite credibly) argue that many of the athletes wouldn’t have been admitted if they weren’t athletes, but (at least at Texas) most of them are state residents, so the university is still fulfilling its mission in educating student athletes. (This assumes student athletes actually get an education; that could be debated.) Instead of a financial drain, the athletics dept.’s main negative influence might be in exerting downward pressure on the university’s “academic metrics”. Test scores, graduation rate, etc. Certainly athletes in the “big money” sports don’t measure up to the student body as a whole. I wonder, though, how differently the set of student athletes as a whole differs from the wider student body when the non-“big money” athletes are included in the comparison. The difference may not be that great.

40 Floccina May 12, 2013 at 9:53 pm

The question is, why should subsidized state universities attempt to attract students. It is like charities using marketing to try to draw recipients from other charities.

41 GiT May 12, 2013 at 11:02 pm

Well, I guess it’s a question of which students they should attract. They make a profit off of Out of State students. When it comes to attracting their own students, a public university which didn’t, well, publicize itself to the residents of the state it’s supposed to serve would be a little silly. THat other charities exist which provide similar services to your is not a reason to abolish your own charity and make sure no one else knows about it, or to spend your money advertising other charities so that you can spend your resources on officer compensation.

42 Roy May 13, 2013 at 6:05 am

I am affiliated with a public university with an amazingly terrible football program, its rival school is almost as bad at being a University as ours is at football but it draws students from a wider area than ours, even though it is ranked much lower by every academic measure.

While like most of my colleagues, I resent the football program, I am confident that if they were any good, our school would benefit greatly, even if the athletic department continued to lose money. Alumni support is a precious thing.

43 middle aged vet May 12, 2013 at 11:39 pm

college sport can be seen as positive sum when measuring the benefits to
those young people who, through no fault of their own, lack intellectual, leadership, and creative skills.
Such people, if they happen to nevertheless have the ability to follow a coach’s instructions, do much better on several metrics at a time in life when the cost-benefit downside of failing to excel at anything at all is often very, very painful (crime, jail, depression, drugs, loneliness, inability to start a family). A good coach, and a good commonsense college community, will try to make sure they keep their (keeping it real, mostly artificial) athletic successes in perspective. The criticism at many campuses that such perspective is lost is, in my opinion (never went to a school with a big sports program), extremely valid. To the extent that coaches are not paid in line with perspective, but paid in line with “winning”, something is wrong.

44 whatsthat May 13, 2013 at 12:07 am

Well, maybe now Max knows what to do

45 Shane M May 13, 2013 at 1:13 am

I can’t find a link, but I’ve heard it argued that success in sports increases university awareness, enrollments, and is in demand by many of those who make large donations. Many coaches salaries are actually paid for by fundraisers in the athletic department – especially when attracting a new coach.

46 Axa May 13, 2013 at 3:55 am

#1: Hey, this time is OK to compare with the rest of the world. There are no college sports in Europe and the university system works. Maybe sports are just vanity.

#2: About the huge athletic facilities, I’m astonished that everybody ignores the total cost of ownership of new facilites. It’s like buying a new car. Your father may buy it, but if you want to enjoy it you have to pay regularly gas, oil, insurance, spare parts. The same for the huge athletics facilities: electricity, water, maintenance, dedicated people from maintenance to marketing, etc.

I wonder how long it takes for the operating & maintenance expenses to overcome the upfront payment. Anyway, the fixed costs to keep running the pool and the gym are paid by present tuition. Sorry for students.

Cynically, university management instead of controlling these expenses, just tells students that they are stupid if they don’t use the facilities because they’re paying them through tuition.

47 James May 13, 2013 at 5:49 am

I do agree that one of the problems with doing a cost benefit analysis of college sports is that university accounting tends to be crazy. One of the big factors that is missing is the cost of capital. Some sports programs run an operating profit, but with the cost of stadiums, it is not clear that a profit maximizing firm would enter the market.

48 Axa May 13, 2013 at 7:21 am

Exactly, is sports the best use for the capital? Quoting the “black numbers” is a really poor defense if not compared to other investment alternatives. Also, if college sports are really a money making machine, I wait for the day that a college dean says: “We’re cutting 5% of tuition to all students due to the extra income generated by the football team”. I’ll wait in a lounge seat.

Ps. I remember a link in MR about CalTech boasting they never win in college basquetball, but alumni have got a relatively high amount of Nobel prizes in chemistry, physics and medicine.

49 Andrew' May 13, 2013 at 5:18 am

Theory #1: universities do this because they are stupid
Any other theories?

50 James May 13, 2013 at 5:52 am

I wouldn’t quite say stupid, although having worked in universities I cannot reject that hypothesis. I think part of it is the short time horizon of university administrators. Most of them seem to be looking for their next job every 3-5 years, and in this time horizon you tend to want flashy things even if the long run cost benefit scenario is dismal.

51 Axa May 13, 2013 at 7:35 am

Coaches get a great salary. What about the players? College players pay the 2 million check for the coach and all they get is free food and accommodation. Education is optional since there’s a lot of tolerance for under average academic profeciency of athletes. Another topic is life-long injuries with no compensation. ONG’s complain about sweatshops in the undeveloped world, I guess they’re not seeing the elephant in the room.

http://sports.espn.go.com/ncf/columns/story?columnist=gilmore_rod&id=2733624

Average graduation rate for football players with full scholarship: 55%. Yeah, free education.

52 Ricardo II May 13, 2013 at 10:57 am

Good to see this. On a per capita basis, coaches undoubtedly improve social welfare more than any other public employee.

53 sourcreamus May 13, 2013 at 3:58 pm

The Flutie affect is that success in sports leads to higher rates of applying to that college, and an increase in the quality of applications. Thus the university can be more selective in choosing students leading to higher prestige so they can increase tuition.
Alumni who were on succesful sports teams also give more to the university than those who were not athletes or whose teams were not succesful.
Schools that have post season success also see rises in donations from alumni that were not athletes.

54 Shane M May 14, 2013 at 4:49 pm

This is a few days late, but I just saw this story about Nick Saban and figures about academic side of things during his tenure at Alabama.
http://sports.yahoo.com/news/magic-nick-saban-everyone-wants-alabama-155022258.html
– undergrad enrollment up 33%
– faculty up 400 to over 1700
– increase of out of state tuition – 52% of freshman class now out of state (bringing higher $/student than in-state).
– 600 million in donations for facilities/scholarships (not sure how significant that increase is)
– more applicants has seemed to raised quality of applicants and national merit scholars – raising profile of University in the process.

Overall, I think it’s an interesting glimpse into what big-time football success can mean for University as a whole.

55 Dave Dorson May 18, 2013 at 4:56 am

@Shane M: in reply to the Yahoo sports story (which reads more like an advertorial or even a press release), one notable claim that they’re making is that the University of Alabama increased the out-of-state proportion of the incoming freshman class from roughly 1/3rd out-of-state in 2007 to nearly one-half out-of-state in 2012.

The upside they boast is that out-of-state students pay much more in tuition, which then goes towards top-line revenue for the University. The premise is that Nick Saban and his successful coaching of the Alabama football program is what is causing the increase in out-of-state enrollment.

Leaving aside the football-as-an-attraction issue, any Alabamian who pays taxes to fund their flagship state university has got to be wondering why their flagship state university isn’t educating Alabamians, but rather taking their tax dollars and using it to educate students from other states.

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