In 1969 University of Alabama football coach Paul “Bear” Bryant was offered the head-coaching job at the Miami Dolphins for a then unheard of sum of $1.7 million a year. After going back and forth, Bryant decided to stay at Alabama, and continued to coach there until he retired in 1982. His personal policy at Alabama was to take a salary of exactly one dollar less than the university’s president.
Times have changed. Last year, the current Alabama coach, Nick Saban, made $7.2 million, roughly 11 times the salary of Alabama’s president. Mr. Saban—who has won four national championships, one with LSU and three with Alabama—is the highest-paid coach in college football. He is also among the highest-paid public employees in the country, an exclusive club that also includes two other brand-name college football coaches, Ohio State’s Urban Meyer ($6.5 million), and new University of Michigan head coach Jim Harbaugh ($5 million).
Critics harp on the priorities of these schools. Messrs. Saban and Meyer make 50 times that of an average full-time professor at their respective schools; Mr. Harbaugh makes 32 times more than an average full-time professor at Michigan. The fact that college players don’t make any money for their efforts—aside from a small “cost of attendance” stipend for things like food and clothing—adds to the criticism. With the college season kicking off this week, it appears that this will remain the case for the foreseeable future: Earlier this month, the National Labor Relations Board blocked an effort by some Northwestern University football players to unionize.
The 63-year-old Mr. Saban, because of his top salary, and, perhaps, because of his polarizing nature, seems to bear the brunt of the wrath. Much is made of the fact that Alabama is a poor state with a median household income of $43,253, some $10,000 less than the national average. Public funding for higher education in the state was slashed by $556 million from 2008 to 2013, a 28% drop. Mr. Saban’s salary has risen 80% since he arrived at Alabama in 2007.
Technically, Mr. Saban is not paid primarily with taxpayer money. His base salary of just north of $200,000 a year is paid by the university. The rest, called a “talent fee,” comes from the Crimson Tide Foundation, a nonprofit organization that raises money through boosters and shoe and apparel contracts. The CTF’s designation as a nonprofit allows individual donors in Alabama to receive deductions on both their federal and state income taxes, so the state does, at least in theory, lose out on some potential taxpayer money. (Mr. Meyer’s base salary at Ohio State is $818,640 and Mr. Harbaugh’s at Michigan is $500,000. The remainder of their salaries are paid through media, shoe and apparel contracts.)
All of this would seem to make it clear that these coaches, like some CEOs, are overpaid. But there is another way to view the salaries of Mr. Saban and other brand-name college coaches: Through the eyes of the university. Former Alabama President Robert Witt (now the chancellor of the Alabama university system), once told CBS ’s “60 Minutes” that Mr. Saban was “the best financial investment this university has ever made.” He has a point.
Mr. Saban had an immediate financial impact on Alabama. In 2007 the school was closing a $50 million capital campaign for its athletic department. After Mr. Saban arrived, the campaign exceeded its goal by $52 million. Alabama’s athletic-department revenue the year before Coach Saban showed up was $68 million. By 2013-14 it had risen to $153 million, a gain of 125%. (The athletic department kicked $9 million of that to the university.) Mr. Saban’s football program accounted for $95 million of that figure, and posted a profit of $53 million.
Mr. Witt said Mr. Saban also played a big role in the success of a $500 million capital campaign for the university (not merely the athletic department) that took place around the time the football coach was hired. Mr. Witt also credited his coach with helping grow Alabama’s enrollment—which stands at more than 36,000, an increase of 14,000 students since 2007. The university managed the neat trick of actually becoming more selective during that time. The year before Mr. Saban arrived, Alabama accepted 77% of its applicants. It now admits a little more than 50%. Mr. Saban’s three national titles at Alabama have helped the university create a winning brand.
Ohio State has benefited in a similar way since luring Mr. Meyer, 51, out of a brief retirement in 2012. The university’s athletic-department revenue was up 14% to $69 million during the season last year, one in which Ohio State won the national title. In the aftermath of the title, the school’s merchandise sales totaled $17 million, some $3 million more than the previous year. More than half of that money goes to academics.
The 51-year-old Mr. Harbaugh has already had a positive impact on Michigan’s bottom line though he hasn’t coached a down. In July Nike signed an 11-year apparel deal with the school for a reported $169 million. Would Nike have signed that deal under Mr. Harbaugh’s predecessor, Brady Hoke? Not likely. In 2014 Michigan admitted to giving away football tickets. This summer it had to put a halt on 2015 season-ticket sales after some 90,000 had been sold, the most in three years.
Of course, some high-paid coaches aren’t hugely successful. Kirk Ferentz at the University of Iowa was paid more than $4 million in 2014, but his Hawkeyes have gone 34-30 in the past five seasons. The program, however, remained in the top 25 in attendance during those years and still brings in a great deal of revenue.
Are these coaches overpaid? The answer seems to be in the eye of the beholder. “I think Nick [Saban] is actually way underpaid,” says Angus Cooper II, an emeritus trustee at Alabama. The power brokers at Michigan can only hope to feel the same way about Mr. Harbaugh some day.
Mr. Burke is the author of “Saban: The Making of a Coach,” published this month by Simon & Schuster.
http://www.wsj.com/articles/college-...pay-1440975551
Times have changed. Last year, the current Alabama coach, Nick Saban, made $7.2 million, roughly 11 times the salary of Alabama’s president. Mr. Saban—who has won four national championships, one with LSU and three with Alabama—is the highest-paid coach in college football. He is also among the highest-paid public employees in the country, an exclusive club that also includes two other brand-name college football coaches, Ohio State’s Urban Meyer ($6.5 million), and new University of Michigan head coach Jim Harbaugh ($5 million).
Critics harp on the priorities of these schools. Messrs. Saban and Meyer make 50 times that of an average full-time professor at their respective schools; Mr. Harbaugh makes 32 times more than an average full-time professor at Michigan. The fact that college players don’t make any money for their efforts—aside from a small “cost of attendance” stipend for things like food and clothing—adds to the criticism. With the college season kicking off this week, it appears that this will remain the case for the foreseeable future: Earlier this month, the National Labor Relations Board blocked an effort by some Northwestern University football players to unionize.
The 63-year-old Mr. Saban, because of his top salary, and, perhaps, because of his polarizing nature, seems to bear the brunt of the wrath. Much is made of the fact that Alabama is a poor state with a median household income of $43,253, some $10,000 less than the national average. Public funding for higher education in the state was slashed by $556 million from 2008 to 2013, a 28% drop. Mr. Saban’s salary has risen 80% since he arrived at Alabama in 2007.
Technically, Mr. Saban is not paid primarily with taxpayer money. His base salary of just north of $200,000 a year is paid by the university. The rest, called a “talent fee,” comes from the Crimson Tide Foundation, a nonprofit organization that raises money through boosters and shoe and apparel contracts. The CTF’s designation as a nonprofit allows individual donors in Alabama to receive deductions on both their federal and state income taxes, so the state does, at least in theory, lose out on some potential taxpayer money. (Mr. Meyer’s base salary at Ohio State is $818,640 and Mr. Harbaugh’s at Michigan is $500,000. The remainder of their salaries are paid through media, shoe and apparel contracts.)
All of this would seem to make it clear that these coaches, like some CEOs, are overpaid. But there is another way to view the salaries of Mr. Saban and other brand-name college coaches: Through the eyes of the university. Former Alabama President Robert Witt (now the chancellor of the Alabama university system), once told CBS ’s “60 Minutes” that Mr. Saban was “the best financial investment this university has ever made.” He has a point.
Mr. Saban had an immediate financial impact on Alabama. In 2007 the school was closing a $50 million capital campaign for its athletic department. After Mr. Saban arrived, the campaign exceeded its goal by $52 million. Alabama’s athletic-department revenue the year before Coach Saban showed up was $68 million. By 2013-14 it had risen to $153 million, a gain of 125%. (The athletic department kicked $9 million of that to the university.) Mr. Saban’s football program accounted for $95 million of that figure, and posted a profit of $53 million.
Mr. Witt said Mr. Saban also played a big role in the success of a $500 million capital campaign for the university (not merely the athletic department) that took place around the time the football coach was hired. Mr. Witt also credited his coach with helping grow Alabama’s enrollment—which stands at more than 36,000, an increase of 14,000 students since 2007. The university managed the neat trick of actually becoming more selective during that time. The year before Mr. Saban arrived, Alabama accepted 77% of its applicants. It now admits a little more than 50%. Mr. Saban’s three national titles at Alabama have helped the university create a winning brand.
Ohio State has benefited in a similar way since luring Mr. Meyer, 51, out of a brief retirement in 2012. The university’s athletic-department revenue was up 14% to $69 million during the season last year, one in which Ohio State won the national title. In the aftermath of the title, the school’s merchandise sales totaled $17 million, some $3 million more than the previous year. More than half of that money goes to academics.
The 51-year-old Mr. Harbaugh has already had a positive impact on Michigan’s bottom line though he hasn’t coached a down. In July Nike signed an 11-year apparel deal with the school for a reported $169 million. Would Nike have signed that deal under Mr. Harbaugh’s predecessor, Brady Hoke? Not likely. In 2014 Michigan admitted to giving away football tickets. This summer it had to put a halt on 2015 season-ticket sales after some 90,000 had been sold, the most in three years.
Of course, some high-paid coaches aren’t hugely successful. Kirk Ferentz at the University of Iowa was paid more than $4 million in 2014, but his Hawkeyes have gone 34-30 in the past five seasons. The program, however, remained in the top 25 in attendance during those years and still brings in a great deal of revenue.
Are these coaches overpaid? The answer seems to be in the eye of the beholder. “I think Nick [Saban] is actually way underpaid,” says Angus Cooper II, an emeritus trustee at Alabama. The power brokers at Michigan can only hope to feel the same way about Mr. Harbaugh some day.
Mr. Burke is the author of “Saban: The Making of a Coach,” published this month by Simon & Schuster.
http://www.wsj.com/articles/college-...pay-1440975551
