How to Make a Ba-Zillion Dollars: Become a College Football Coach

I LOVE football! I love college football (too bad Michigan's looking sorry), pro football (go Colts! Too bad the Patriots are doing so well!), and I've even been known to watch arena football (Griffins!) on occasion when I need an off-season fix (BTW, arena football games are a blast to go to -- I'd recommend you do so if you ever get the chance.) So when I come upon a football-and-money-related article, I simply HAVE to write something about it.

Sports Business Radio (they have a great podcast, BTW, if you love the business side of sports) points to a USA Today article on the salaries of college football coaches. Let's start with the highest paid coaches:

Four coaches — Oklahoma's Bob Stoops, Alabama's Nick Saban, Florida's Urban Meyer and Iowa's Kirk Ferentz — already have cracked the $3 million mark, leading a spiral that shows no sign of slowing.

The piece also notes that LSU's Les Miles is likely soon to be in the $3 million club. Nice, huh?

But it's not only the big boys who are doing well:

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.

At least 50 coaches are making seven figures, seven more than a year ago. At least a dozen are pulling down $2 million or more, up from nine in 2006. Last season, Stoops was the only one making more than $3 million.

The piece doesn't say, but I know "benefits, perks and myriad bonuses" can add up to really big bucks as well -- so these guys are making a fortune!!! How can this be? The rationale:

It's an investment, school officials say, in the health of a sport that's the revenue-generating backbone of most major-college athletics programs. Successful teams pump up ticket sales and prices, television rights fees, marketing revenue, donations and even applications for admission to the universities.

At LSU, a football team that finished 11-2 and ranked No. 3 in 2006 accounted for 63% of the school's athletics revenue for the year. It also accounted for a lion's share of the spending — more than $16 million — but turned an almost $32 million profit that helped underwrite the school's non-moneymaking sports.

Yep, major college football is a huge money-maker. So what if you have to pay $3 million for a coach? If you make $32 million as a result, it's a good deal, right? Sure, LSU would have made some money even if their team didn't do well, but probably not nearly as much. As such, you could easily argue that Miles has earned his salary and that it's been a good investment for the college.

So what happens to all the football profits? They help to fund other sports that don't pay for themselves -- water polo, fencing, tennis, etc. Still, football and basketball don't make enough to cover the costs of all the other sports:

The NCAA's latest data shows that more than four of every five major-college sports programs need institutional subsidies, student fees and other supplements to balance their budgets.

And finally, a comparison between what the football coaches make and the median salaries of college presidents:

College presidents' pay typically pales in comparison. Median total compensation for 182 presidents and chancellors of public research universities and university systems was a little more than $397,000 annually.

Yeah, but then again there are more people who can do what a college president can. It's all about supply and demand.

Now, should I move on to how much money they'd all generate if the major colleges instituted a playoff system? ;-)

Comments

[briang]

And the biggest loser in all of this? The players who generate the revenue get a small pittance (tuition+room+board if they're lucky)

At least some of the money is going to the unpopular sports, like all of the women's teams.

[Tom Smithdeal]

Actually, college football coaches are only paid what the market will bear. NO school HAS to pay their head coach $3m. So why do they do it? Cuz it makes business sense. If Les Miles at LSU can bring in a nifty $48m for the school, then he and his staff should be in line, in my book, for at least 20% of that, no questions asked. Sound business decision.