Football coaches continue to rake it in as college finances suffer
Filed under: Money College, Family Money
With endowments in the toilet, state aid on the decline, and families scrounging for cash to cover tuition increases, it's nice to know that one group of college constituents aren't suffering: top flight, 7-figure football coaches.An extensive study conducted by USA Today found that at least 25 college football coaches are making more than $2 million this season -- up 100% from two years ago. The average pay for a head coach in the 120-school Football Bowl Subdivision is up 28% in two years and 46% in three years. The average coach in that elite conference earns $1.36 million.
A survey of bowl-division college presidents conducted by Knight Commission on Intercollegiate Athletics found that 85% of respondents considered the pay packages football and basketball coaches are taking to be "excessive."
Defenders of the sports programs say that the notion that coaches' salaries come out of money that could be used to fund goals more central to universities' core missions is misguided: elite basketball coaches create elite basketball teams that drive sponsorship opportunities, ticket sales, and revenue growth.
The problem with that argument, according to the USA Today's analysis, is that it's very rare that those revenue streams come close to recouping all of the expenses of building an elite team: Only 25 of the 120 programs in the NCAA's Bowl Subdivision made more than they spent during the 2007-08 school year/season, and that number might be artificially high because it doesn't include certain capital expenditures.
It's easy to say that the money being used to fund money-losing basketball teams should instead be spent on professors and, perhaps, avoiding tuition increases for students.
But Dr. Michael McPherson, the former President of Macalester College and the author of Crossing the Finish Line: Completing College at America's Public Universities, says that it isn't always up to the colleges. "There is pretty good evidence, I think, that legislators like successful teams and will cough up for sports money they won't give for stuff that is more central to education," he said.
"I'd be happy to live in a world where sports for entertainment in universities was de-emphasized and the money was sent elsewhere within the university, but I'd be careful about assuming the money that goes to sports capital projects would be there for educational capital projects instead," he added.
Reader Comments (Page 1 of 1)
11-12-2009 @ 4:03PM
Ryan said...
This article should be careful to mention all of the relevant facts. It is sloppy and incendiary journalism to only proffer those facts that serve to stir the ever more present populist rage against high earners. The University of Florida for instance pays Urban Meyer $4 million per year for the next 6 years. Except that it isn't the University at all that pays his salary, it is the University Athletic Association, a completely separate entity that also happens to fund all of the other University sports through the earnings of the football team while at the same time contrbuting over $17 million to the University in Meyer's tenure (2005). I would venture a guess that many other major Universities have similar arrangements.
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11-12-2009 @ 4:18PM
gc said...
And where did your info come from? It is a rare occasion when a Gator football player actually graduates, yet the U of F doles out millions in aid to players who could care less about the classroom.
11-12-2009 @ 4:29PM
Ryan said...
To GC,
1) try a little thing called Google for finding information that is readily available, it really is quite useful. Otherwise, here is a link from espn; http://sports.espn.go.com/ncf/news/story?id=4374311
2) I'm not sure what your point is about graduation rates, that is an argument for another day.
I was only pointing out that the information presented in this blog, like most poorly researched pieces, was incomplete and misleading. Regardless of graduation rates, the money that pays Urban Meyer's salary does not come from the University's coffers, quite the opposite actually. Oh, and he also donated $1 million of that money back to the school.
11-12-2009 @ 4:18PM
p said...
This blog post is extremely confusing. You seem to be mixing Basketball and Football coaches/programs.
Also, while I agree that the stat about only 25 out of 120 programs (120 being a number associated with FBS football programs - there are more than 300 division 1 basketball programs) making a profit is alarming. That number is referring to the entire Athletic Department losing money as a whole except at 25 schools, Not just the football team. Football and men's Basketball make money, other sports rarely do. So only 25 schools have big enough FB and MBB revenues to account for everything they spend elsewhere - but that doesn't mean the other 95 schools have "money losing basketball programs."
The NCAA study on athletic department profits is available here - http://tinyurl.com/ykmefhv - and it includes a conclusion that "the most significant new information may be the fact that expenses appear to be growing at a rate that is comparable to revenues, if not more slowly."
I'm not sure what relationship walletpop has with CNN, but this is the second time I've clicked on a link at CNN and been directed here, and twice I've been confused by the information posted. If you're going to associate with a news network, try doing some investigation or taking some time to write clearly. I'm sure the actual article authors at USAToday (who wrote a thoroughly researched piece) would appreciate it as well.
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11-12-2009 @ 4:56PM
Rob said...
this is hack journalism at it's best. First off elite schools do not pay coachs (football or basketball) out of the schools general fund. That money comes from the boosters who are more than willing to pay for a quality product to be put on the floor or field. And the statistics used to make the football program look like a black hole is even worse. Only 25 of 120 make money, that statistic is based on the athletic departments as a whole, not simply the football or basketball programs. Put quite simply without football or basketball revenue the swin team wouldn't have swimsuits, and the volleyball team would be without volleyballs. What this article should really say is, "thank god for good football coaches and their exhorbitant salaries otherwise all college sports would be finished."
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11-12-2009 @ 5:03PM
p said...
Here's an article published in the Wall Street Journal almost a year ago that directly refutes just about everything in this blog post and in the article it is based on. (although to be fair the USAToday article doesn't draw many of the false conclusions that Zac did when he posted this).
"Who Pays the College Coach"
http://online.wsj.com/article/SB122853304793584959.html
For instance, at my alma mater - "North Carolina's Roy Williams earns only $260,000 in salary. The rest of his $1.6 million annual compensation is made up of a combination of funds from the school's $350,000 radio and television deal, about $500,000 from Nike, and a five-year, $3.9 million "retention" bonus that's being paid to Mr. Williams by the Rams Club, a booster group."
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11-13-2009 @ 4:26AM
GS said...
Those who argue that these exorbitant coaching salaries don't come out of the general budget are really missing the point.
Sure, in order to justify paying these salaries, the U. of Florida has structured athletics as a stand alone entity, with its own separate budget. But regardless of how you cut it, when the university and its students are struggling to make ends meet, all this can't help but conjure up images of a family who doesn't have money to pay the light bill, but nevertheless manages to have a shiny new Corvette parked in the driveway.
It also seems to call into question the very purpose of a public university. There was a time when public universities had something to do with public service and creating equal opportunity for all, not serving as platforms from which to launch highly elitist sports enterprises.
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11-13-2009 @ 10:53AM
terrible analogy said...
It's more like a sibling who lost his job complaining that his brother got a raise at the same time.
Nike and ESPN and others will give some money to the general school fund in order to maintain a relationship with the athletic department, but only to a point. They are paying to broadcast and associate with the football and basketball team. FB and MBB are paying for the entire athletics budget, and indirectly (through boosters, foundations, etc.) for every athlete's scholarship. And as someone who played a non-glamour sport in college I can't thank them enough.
It's a silly argument to acknowledge that most of coaches' salaries don't come from the academic fund, but then argue that the coach should give up his pay from adidas/under armour/etc. to fund academics.
There is an easy, but completely unpalatable solution. Athletics money comes from donations, tickets and broadcasting/advertising. Academics already gets money from donations, and tickets (tuition), but don't exploit advertising as blatantly as athletics do. Louisville plays in papa john's stadium, but if they were willing to put a logo on every textbook, desk, computer, and professor's tweed jacket, they'd be pulling in a lot more money for academics. Football and Basketball get this. They plaster every inch of their stadium, practice facility, and gear with logos and charge heavily for the privilege.
There's also a bit of exaggeration on the part of poor, poor, colleges and reduced funding. USA Today wrote about how endowments were soaring and how lawmakers should use endowments instead of raising tuition
http://www.usatoday.com/news/education/2008-01-24-endowments_N.htm
There are over 70 schools with endowments of more than 1Billion dollars. And at least a third of those are public schools.
http://www.nacubo.org/documents/research/NES2008PublicTable-AllInstitutionsByFY08MarketValue.pdf
Sure, everyone took a hit in the down stock market, but come on. Michigan has an endowment of over 7 billion, raked in over 500 million more in donations and earnings between 2007-2008 (one year!), yet still charges almost $20K per year for in-state and $40K per year out-of-state undergraduate tuition. Really? And I should be mad that Rich Rodriguez makes too much?