Huge coaching contracts – unjustifiable or as usual?

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With the college football season coming to an end, schools are taking the usual steps to hire and fire coaches. But mind-boggling numbers have emerged from contracts for three major programs where football coaches are expected to earn higher salaries than some of their NFL counterparts.

At Michigan State University, sophomore head coach Mel Tucker signed a 10-year, $ 95 million contract extension. Likewise, Brian Kelly, who left Notre Dame University to become Louisiana State University’s head coach, signed a deal worth at least $ 9 million a year for 10 years. And while the Private University of Southern California has chosen not to disclose contract details for newly hired Lincoln Riley, the former University of Oklahoma coach is reportedly earning more than the annual salary of about 7.6. million dollars from his last job.

For some in higher education, these massive transactions are worrying.

Kim Wilcox, chancellor of the University of California at Riverside and former rector of the state of Michigan, called extension of Tucker’s $ 95 million contract an “embarrassment” when speaking to reporters and other high-level administrators at a December 1 roundtable on higher education.

“It sends a message to universities in general which is really unhappy and I think is pushing us back,” Wilcox said, adding that such big deals suggest universities are irresponsible.

But other observers view big wins as business as usual when it comes to varsity athletics.

“From a financial and economic standpoint, all that has happened is that the incomes go up and the coaches contribute to an activity that makes more money,” said Rodney Fort, professor of management at the sport at the University of Michigan. “The competitive process gives them some of that in terms of higher pay. This is how it’s always been, this is how it’s always going to be.

The evolution of large-scale coaching contracts

The increasing commercialization of college athletics over the years has led to an influx of money for major programs, especially those with top-tier men’s soccer and basketball teams.

Looking at the historical context, the earliest contracts for Grill Legends were more comparable to what humanities majors do today than what current football coaches earn. For example, Bobby Bowden signed his first contract at Florida State University in 1976 for $ 37,500. Nearly two decades later, Bowden signed the first million dollar college coaching contract, with incentives, in 1995. Not to be outdone, the multi-state rival University of Florida gave to Steve Spurrier nearly $ 2 million a year in 1997.

Since the first million dollar deal, coaching salaries – and varsity sports income – have continued to rise, driven by increasing commercialization and massive broadcast deals. Understanding these contracts requires looking beyond the playing field.

“I think there are some interesting market forces behind this,” said Richard Southall, director of the College Sport Research Institute at the University of South Carolina. “With the renegotiation of contracts at the conference level and with the impending expansion of college football qualifiers, athletic departments don’t want to be left behind, so to speak.”

While nothing official has been announced, many observers and fans expect the college football playoffs to grow from four teams to eight or 12 participants.

According to 2019 figures from the Knight Commission on Intercollegiate Athletics, $ 2.6 billion was paid to universities from a mix of NCAA and conference distributions, media rights revenue and football payouts. ‘post-season. By comparison, in 2005, the first year for which the Knight Commission has data, that same source of revenue was $ 641 million. These numbers apply to schools in the Football Bowl subdivision, which means that only colleges offering senior level Division I football programs are included in the income calculations for this data set.

“The college football playoffs and March Madness are the giant contributors in the media,” Fort said. “Regular season media contracts are not to be outdone. But the payoffs that come from college football playoffs are significant in absolute terms, and so is March Madness. “

Introduced in 2014, the four-team college football playoffs for the FBS have meant multi-million dollar payments for qualifying team conferences, which are then distributed to members.

“The college football qualifiers brought yet another injection of money. There was sort of a cascading series of events, which concentrated the power and the money in the big programs, ”said Michael Leeds, professor of economics at Temple University with research interests in the field. sport.

Although the vast majority of universities cannot afford to offer massive training contracts, Leeds speculates that there could be ripple effects on wages to prevent good coaches from getting poached, even among less visible programs outside of the big Power Five conferences: Atlantic Coast Conference, Big 12, Big Ten, Pac-12, and Southeast Conference.

“If you’re in a non-Power Five conference, if you want to keep your coach, or at least make sure he doesn’t jump out at the first opportunity, you’re going to have to increase your pay,” Leeds said.

Academics vs. Athletics

Large-scale varsity athletics requires one essential ingredient: unpaid work. Student-athletes add value to their programs – money that ends up going into the pockets of their coaches. And although students can now cash in on name, image, and likeness contracts, they are still prohibited from directly accepting payments for their performances as NCAA athletes.

“They help the team win, and when the team wins it generates more revenue, so each of those athletes has a value that they produce,” said Andrew Zimbalist, professor of economics at Smith College and president. elected from the Drake Group. “Because the NCAA doesn’t allow them to be paid directly in cash, the coaches end up getting the value created by the athletes. “

The Drake Group was formed in 1999 out of concerns about academic corruption in college sport.

“We were concerned about the commercialization of college sports and its negative impact on the educational environment and the educational experience of student-athletes,” Zimbalist said. “We defend the principle of academic integrity, restoring academic integrity in our sport.”

Zimbalist said students are only required to meet minimum eligibility standards and suggests that the NCAA use creative math to calculate athletes’ high graduation rates. He feels “there has been a gradual abandonment of serious education for student-athletes.” He adds that the focus on income from athletics ultimately hurts institutional missions.

“This thing has taken on a life of its own,” he said. “Unfortunately, many Division I universities, especially public schools, have moved into the production of college football rather than college education, and the football coach is the most important person on campus.”

Such spending, he said, is not justified on either economic or ethical grounds. But other observers say athletic departments are entertainment entities that span colleges across the board.

“A number of students go to big colleges and universities to play college sports as part of their college experience,” Southall said. “And when I talk about a college experience, that includes going to class and having access to an education, but it’s also a social experience.

Athletics also holds an important position as the so-called front porch of an institution, an outward-facing brand that can grab the attention of potential students. Such is the case at Michigan State, LSU and USC, Southall said, where the ink is barely dry on massive coaching deals.

“These institutions have positioned athletics as a major part of their institutional branding of the university,” Southall said. “It’s no surprise to me that salaries have gone up a bit, but the role that coaches play is a perfect match for how athletics has been used as a marketing and public relations tool for these universities.”

Congressional appetite for college athletics reform

The big contracts signed by college coaches did not go unnoticed in Congress.

“Professional-level payments for college coaches are only possible because colleges and the NCAA illegally collude to directly restrict the compensation of mostly black athletes so predominantly white coaches and industry executives can keep all of the profits for themselves, ”Democratic Senator Chris Murphy of Connecticut said in a Nov. 30 statement. “It is shameful.”

Likewise, Senator Richard Blumenthal, also a Democrat from Connecticut, said United States today that recent contracts such as Michigan State, LSU and USC are “outrageously astronomical”. He added that the reform of college sport was a topic that could possibly be brought up to Congress in 2022.

Experts suggest the substantial reform of college athletics in Congress is likely a long, short-term plan.

“I don’t see anything substantial happening in Washington,” Leeds said. “Maybe a little dress up, but nothing that won’t change the core business model” of high-profile college sports.

However, Leeds sees two possibilities that could change the way college coaches are paid. The first, he said, is whether athletes are able to demand and earn compensation for their game beyond the outside money they earn from name rights, l image and likeness, which would likely require a court battle. The second, he said, is expected to involve an unlikely collapse in television revenues that support these sports departments.

In the meantime, Leeds said it was hard to say where colleges would draw the line on coaching salaries: “Every time I’ve said it can’t go higher I’ve been proven wrong. “

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