Tide set new standard

[Tigermike 3,055]

Tide set new standard on Saban salary

Vandy economist: UA coach’s money doubles acceptable percentage of budget

By Josh Cooper

jcooper@decaturdaily.com · 340-2460

These days, landing a football coach has become similar to buying a car.

You look around, spot what you want and decide if you’re going to buy.

The only difference between Alabama’s hiring of Nick Saban recently and other schools’ hiring of coaches — the Crimson Tide stepped in and paid top dollar.

“They paid a premium price for a used car,” said John Vrooman, sports economist at Vanderbilt University. “It’s a used car because (Saban) wasn’t doing well in the NFL and he is a flight risk now. He does have a tendency to leave.”

According to Vrooman, most collegiate coaching salaries should be somewhere between four and five percent of the school’s football revenue.

This number comes from looking at the relationship between other schools’ coaching salaries and football revenue, along with a November 2006 statement by NCAA president Myles Brand to Congress saying that the salaries of million-dollar coaches average 3.1 percent of their schools’ football budgets.

With Saban’s hiring for $4 million a year, Alabama is paying him 9 percent of its football budget. According to the United States Department of Education, Alabama football generated $44,426,312 from July 1, 2005, to June 30, 2006.

“This (percentage) is twice of what the acceptable, reasonable salary is I think a school can get away with,” Vrooman said.

Auburn football generated $51,598,921 in revenue during that span. Head coach Tommy Tuberville makes a reported $2,231,000, which is 4.3 percent.

The University of Florida generated $48,194,552 in football revenue during that time period and pays its coach, Urban Meyer, $1,524,550. That’s 3.3 percent of its football budget.

Les Miles, who replaced Saban as LSU’s head coach, makes $1.45 million, about 3.7 percent of the Bengal Tigers’ football budget.

Tennessee head coach Phillip Fulmer’s salary is at 7.3 percent, but the Vols’ football revenue has dropped from around $46 million to $27,732,427.

Alabama is not the only school with a high percentage level. Oklahoma pays Bob Stoops $3.45 million, which is at 10 percent, and Notre Dame pay Charlie Weis a reported $3.3 million, which is 5.3 percent.

Alabama’s coaching search alone already has led to a direct correlation with increasing salaries. On top of Saban’s contract, the Tide’s courtships of South Carolina head coach Steve Spurrier and West Virginia coach Rich Rodriguez led to those two getting raises.

“I joked after the national championship that I’m sure (Florida athletics director) Jeremy Foley was the happiest and saddest athletics director in America,” said Vanderbilt vice chancellor for university affairs David Williams, who also oversees the school’s athletics department.

“I’m sure he’s a little concerned because he has a coach that is an national champion that is making less than a coach in the league.”

Mike Shula’s contract when he was fired at Alabama paid him about $1.7 million a year, which was 3.8 percent of the Tide’s football budget. The contract Alabama reportedly offered to Rodriguez, around $2 million a year, would have been 4.5 percent of the football budget.

Schools sometimes follow the model of hiring a coach from a lower-profile program, which Alabama appeared to be doing when it went after Rodriguez.

For example, the University of Louisville hired Tulsa’s Steve Kragthorpe following Bobby Petrino’s departure to the Falcons, and Michigan State hired Mark Dantonio from Cincinnati.

Boise State’s Chris Petersen, a possible hot property in coaching circles after his team beat Oklahoma in the Fiesta Bowl, makes $511,880 a year.

Even at the NFL level, several coaches who have achieved a high level of professional success are making less than their collegiate counterparts.

In last Sunday’s NFC Championship Game, Chicago Bears coach Lovie Smith, who reportedly is the NFL’s lowest paid coach at $1.35 million a year, was pitted against New Orleans’ Sean Payton, who makes $1.8 million.

Smith asked the Bears in the off-season about a contract extension, but the team postponed talks until after the current season finishes.

Combined, Smith and Payton make less than Stoops, Saban and Weiss do by themselves.

“There are a lot of good guys out there who have proven themselves,” Vrooman said. “I think Alabama has had too much mud thrown in their faces, and they wanted to make a big splash.

“But you’re risking an awful lot — he may not pan out, and you have a guaranteed contract sitting there. You literally have an NFL contract.”

The escalating coaches’ salaries also might endanger NCAA’s tax exempt status.

NCAA tax exempt

Under the Republican Congress, Ways and Means Committee chairman William Thomas, R-Calif., questioned the NCAA and how it could claim to be exempt from taxes if it is such a large money-making enterprise.

Thomas sent Brand a series of questions Oct. 2, 2006, to determine whether to explore the issue more thoroughly.

“There are clear distinctions between the collegiate and professional models of athletics,” Brand said as part of a 25-page response sent to Thomas on Nov. 13.

“Professional sports’ sole purposes are to entertain the public and make a profit for team owners. The purpose of the collegiate model is to enhance the educational development of student-athletes.”

Whether the Ways and Means Committee under the new Democratic-led Congress will look into the NCAA’s tax exempt status remains to be seen.

Representative Charles Rangel, D-New York, is committee chairman but has not indicated what his thoughts are on the NCAA.

If the status is stripped, it could cut down on money the NCAA passes to member schools.

What is clear is that the NCAA does not look favorably upon the escalating coaching salaries.

“The fundamental purpose of intercollegiate athletics is the education of student-athletes in both the classroom and on the field or court,” the NCAA said in a general statement.

“The NCAA also believes that coaching salaries are market-driven, similar to salaries in other enterprises. There is growing concern in the membership over excessive spending, which includes the rising salaries for coaches.”

One of the main arguments for doling out such large bucks on sports is increased visibility for the university.

In some cases it does work. Take Wake Forest University for example.

The 2005 basketball season was one of the better ones in school history.

With future New Orleans Hornets guard Chris Paul starring for them, the Demon Deacons finished the regular season ranked fifth in the final Associated Press poll and garnered a No. 2 seed in the NCAA tournament before falling to West Virginia in the second round.

In between 2004 and 2005, undergraduate applications spiked from 6,289 to 7,484 while enrollment fell from 2,945 to 2,882.

The acceptance rate dropped from 46.8 percent to 38.5 percent.

Also, in the mid-1990s when three-time NBA champion and San Antonio Spurs center played on the Demon Deacons basketball team, the school jumped in US News & World Report’s rankings from 31st amongst national universities in 1996 to 25th in 1997.

In 1997, Wake Forest finished ninth in the final AP poll.

While the school can’t attribute all of its admissions success to basketball, increases in publicity on a national scale can make a school better known.

“This is one of those things where success breeds success,” said Alfred L. Brophy, professor of law at The University of Alabama. “A better football team means more students, probably better students, more money for the school, meaning you can recruit more. If it’s a really successful program, it will mean more benefit to the university.”

SEC football coaches’ salaries

A look at SEC and Bowl Championship Series football coaches’ salaries and their schools’ football revenue. The revenue figures come from the United States Department of Education and cover July 1, 2005, to June 30, 2006. The salary figures are what have been released by schools. Vanderbilt and Wake Forest are not included because as private institutions, they are not required to make public their figures.

SEC coach Salary Football revenue Percentage

Nick Saban, Alabama $4,000,000------$44,426,312------ 9.0

Tommy Tuberville, Auburn 2,231,000 ------ 51,598,921 ------ 4.3

Phillip Fulmer, Tennessee 2,050,000 ------ 27,732,427 ------ 7.3

SteveSpurrier, South Carolina 1,750,000 ------ 33,051,529 ------ 5.2

Urban Meyer,Florida 1,525,550 ------ 48,194,552 ------ 3.1

Les Miles, LSU 1,450,000 ------ 39,528,895 ------ 3.7

Houston Nutt, Arkansas 1,049,644 ------ 28,466,785------ 3.7

Sylvester Croom, Miss.State 940,000------ 7,185,069 ------ 13.0

Ed Orgeron, Ole Miss 905,000 ------ 16,563,825 ------ 5.4

Rich Brooks, Kentucky 729,165 ------ 19,793,174------ 3.6

Bowl Championship Series coaches’ salaries

BCS game coach Salary Football revenue Percentage

Jim Tressel, Ohio State $2,013,700 ------ $60,773,537 ------ 3.3

Bobby Petrino, Louisville 1,743,000 ------ 16,331,615 ------ 9.3

Bob Stoops, Oklahoma 3,450,000 ------ 33,757,486 ------ 10.0

Chris Peterson, Boise State 511,880 ------ 8,542,522------ 6.0

Lloyd Carr, Michigan 1,454,619------ 50,365,537------ 2.9

Pete Carroll, S. California 2,782,320 ------ 27,777,249------ 10.0

Charlie Weis, Notre Dame 3,300,000 ------ 61,463,627 ------ 5.3

http://www.decaturdaily.com/decaturdaily/s...29/salary.shtml

[BamaGrad03 0]

Already been posted, and already been refuted. Those revenue numbers are way off...as they dont take into consideration the extra 12,000 seats that generated revenue last season.

[runswithscissors 33]

isn't the net profit on AU athletics extremely low? not the gross revenue, net profit

[bigsixfive 328]

isn't the net profit on AU athletics extremely low? not the gross revenue, net profit

No. That's just some of the slander they try to brainwash bama fans with.

Some other odd ball questions and statements I've been asked by bama fans when I told them were I went to school:

"Isn't Auburn private?"

"I thought yalls tuition was like $24K."

"Its that big? I didn't know there was 10 thousand people there."

But to get back to your question with another... Can any public college return a big profit? Public institutions are typically not-for-profit organizations, kind of like a church. They might have to tie up profit in other things, such as new facilities, to lower their "profit." Does anyone know the specifics on what I'm talking about?

[runswithscissors 33]

isn't the net profit on AU athletics extremely low? not the gross revenue, net profit

No. That's just some of the slander they try to brainwash bama fans with.

Some other odd ball questions and statements I've been asked by bama fans when I told them were I went to school:

"Isn't Auburn private?"

"I thought yalls tuition was like $24K."

"Its that big? I didn't know there was 10 thousand people there."

But to get back to your question with another... Can any public college return a big profit? Public institutions are typically not-for-profit organizations, kind of like a church. They might have to tie up profit in other things, such as new facilities, to lower their "profit." Does anyone know the specifics on what I'm talking about?

i'm not talking about the college as a whole, i'm just talking about athletics. athletics are certainly for-profit.

[saniflush 0]

i'm not talking about the college as a whole, i'm just talking about athletics. athletics are certainly for-profit.

I agree that they are FOR PROFIT but they are classified as non-profit entities when it comes to the IRS.

[CircleDrill 178]

i'm not talking about the college as a whole, i'm just talking about athletics. athletics are certainly for-profit.

Once upon a time, I knew the numbers on this issue. And once upon a time, the above statement was flat wrong. The vast majority of athletic departments lose money. I'm talking like 90%+ (once upon a time...at least).

I researched this topic as an undergraduate when I wrote a paper on Title 9 sports for my economics class (this was like 15 years ago). Things might be different in 2007, but I seriously doubt it. Even if an athletic department takes in profit through football, much of that profit goes to pay for soccer facilities, softball facilities, swimming facilities, baseball facilities, classroom facilities, and general student facilities and their associated programs and personnel which are big time losers in the budget.

Just food for thought. More than likely, schools are few and far between that actually turn a "profit" through athletics.

[runswithscissors 33]

i'm not talking about the college as a whole, i'm just talking about athletics. athletics are certainly for-profit.

Once upon a time, I knew the numbers on this issue. And once upon a time, the above statement was flat wrong. The vast majority of athletic departments lose money. I'm talking like 90%+ (once upon a time...at least).

I researched this topic as an undergraduate when I wrote a paper on Title 9 sports for my economics class (this was like 15 years ago). Things might be different in 2007, but I seriously doubt it. Even if an athletic department takes in profit through football, much of that profit goes to pay for soccer facilities, softball facilities, swimming facilities, baseball facilities, classroom facilities, and general student facilities and their associated programs and personnel which are big time losers in the budget.

Just food for thought. More than likely, schools are few and far between that actually turn a "profit" through athletics.

i can't find anything on the NCAA site and can't find anything on the US dept of education site, but i did find a story on yahoo sports which was written by the AP.

http://sports.yahoo.com/ncaaf/news?slug=ap...p&type=lgns

Alabama football brought in more than $44 million last year and paid the way for the rest of the athletic department with $27.7 million in profits.

Reports filed with the U.S. Department of Education show Alabama football generated $44.2 million during the last academic year, compared to $1.8 million for all sports other than football and basketball. Football's profit was more than double the $12.7 million cost of fielding teams in nine sports other than football and basketball.

so profit (44.2+1.8-12.7) before figuring in cost of fielding football and basketball is $33.3 million, and i have no idea what it cost to field football and basketball. i wonder if the cost of fielding a team figures in coaches salary, or if it is a net profit before administration?

[bigsixfive 328]

i'm not talking about the college as a whole, i'm just talking about athletics. athletics are certainly for-profit.

Oh, I thought they were classified with the university in order to obtain their tax exempt status. So now I'm wondering how athletics are tax exempt...

[CircleDrill 178]

i'm not talking about the college as a whole, i'm just talking about athletics. athletics are certainly for-profit.

Once upon a time, I knew the numbers on this issue. And once upon a time, the above statement was flat wrong. The vast majority of athletic departments lose money. I'm talking like 90%+ (once upon a time...at least).

I researched this topic as an undergraduate when I wrote a paper on Title 9 sports for my economics class (this was like 15 years ago). Things might be different in 2007, but I seriously doubt it. Even if an athletic department takes in profit through football, much of that profit goes to pay for soccer facilities, softball facilities, swimming facilities, baseball facilities, classroom facilities, and general student facilities and their associated programs and personnel which are big time losers in the budget.

Just food for thought. More than likely, schools are few and far between that actually turn a "profit" through athletics.

i can't find anything on the NCAA site and can't find anything on the US dept of education site, but i did find a story on yahoo sports which was written by the AP.

http://sports.yahoo.com/ncaaf/news?slug=ap...p&type=lgns

Alabama football brought in more than $44 million last year and paid the way for the rest of the athletic department with $27.7 million in profits.

Reports filed with the U.S. Department of Education show Alabama football generated $44.2 million during the last academic year, compared to $1.8 million for all sports other than football and basketball. Football's profit was more than double the $12.7 million cost of fielding teams in nine sports other than football and basketball.

so profit (44.2+1.8-12.7) before figuring in cost of fielding football and basketball is $33.3 million, and i have no idea what it cost to field football and basketball. i wonder if the cost of fielding a team figures in coaches salary, or if it is a net profit before administration?

I would think that in layman's terms the "profit" would be left over after "all the bills were paid."

But, like I said, most programs are not Alabama.

.....actually MOST programs are BETTER than Alabama, but that goes without saying....

[runswithscissors 33]

i'm not talking about the college as a whole, i'm just talking about athletics. athletics are certainly for-profit.

Once upon a time, I knew the numbers on this issue. And once upon a time, the above statement was flat wrong. The vast majority of athletic departments lose money. I'm talking like 90%+ (once upon a time...at least).

I researched this topic as an undergraduate when I wrote a paper on Title 9 sports for my economics class (this was like 15 years ago). Things might be different in 2007, but I seriously doubt it. Even if an athletic department takes in profit through football, much of that profit goes to pay for soccer facilities, softball facilities, swimming facilities, baseball facilities, classroom facilities, and general student facilities and their associated programs and personnel which are big time losers in the budget.

Just food for thought. More than likely, schools are few and far between that actually turn a "profit" through athletics.

i can't find anything on the NCAA site and can't find anything on the US dept of education site, but i did find a story on yahoo sports which was written by the AP.

http://sports.yahoo.com/ncaaf/news?slug=ap...p&type=lgns

Alabama football brought in more than $44 million last year and paid the way for the rest of the athletic department with $27.7 million in profits.

Reports filed with the U.S. Department of Education show Alabama football generated $44.2 million during the last academic year, compared to $1.8 million for all sports other than football and basketball. Football's profit was more than double the $12.7 million cost of fielding teams in nine sports other than football and basketball.

so profit (44.2+1.8-12.7) before figuring in cost of fielding football and basketball is $33.3 million, and i have no idea what it cost to field football and basketball. i wonder if the cost of fielding a team figures in coaches salary, or if it is a net profit before administration?

I would think that in layman's terms the "profit" would be left over after "all the bills were paid."

But, like I said, most programs are not Alabama.

.....actually MOST programs are BETTER than Alabama, but that goes without saying....

well, in the grocery business we have different terms of profit. gross profit, net profit, net profit before administration (when figuring profitability of total store), etc. but i would agree with you, i would assume in this case when they say profit they mean flat out profit

[abrnfanatc 6]

well, in the grocery business we have different terms of profit. gross profit, net profit, net profit before administration (when figuring profitability of total store), etc. but i would agree with you, i would assume in this case when they say profit they mean flat out profit

Off topic, but I guess you guys stand to make a little profit today, no?

[runswithscissors 33]

well, in the grocery business we have different terms of profit. gross profit, net profit, net profit before administration (when figuring profitability of total store), etc. but i would agree with you, i would assume in this case when they say profit they mean flat out profit

Off topic, but I guess you guys stand to make a little profit today, no?

you would be pretty surprised. grocery industry is pretty cutthroat thanks to wal-mart. grocery isn't nearly as profitable as you might think. i honestly don't understand how people can walk in and say "how come yall are more expensive than wal-mart?"

personally, our store runs about 35% net profit before administration, and about 27% after administration, which is in the top 10 in the company. that percentage is based on your total store sales volume and is figured at the end of each period.

[abrnfanatc 6]

well, in the grocery business we have different terms of profit. gross profit, net profit, net profit before administration (when figuring profitability of total store), etc. but i would agree with you, i would assume in this case when they say profit they mean flat out profit

Off topic, but I guess you guys stand to make a little profit today, no?

you would be pretty surprised. grocery industry is pretty cutthroat thanks to wal-mart. grocery isn't nearly as profitable as you might think. i honestly don't understand how people can walk in and say "how come yall are more expensive than wal-mart?"

personally, our store runs about 35% net profit before administration, and about 27% after administration, which is in the top 10 in the company. that percentage is based on your total store sales volume and is figured at the end of each period.

I meant today literally, not figuratively. Snow scares and all...

[WarTiger 3,923]

Well, could it be that with $4 million going to the head coach, that they are now paying the coach more than the players make?? Not likely, but just a thought...