Wednesday, January 17, 2007

the Price of Competition | by Jay

"Coach Stoops at Oklahoma earns more in a year than the entire cost of our football program. Which raises the question of why the big dogs need to spend the kind of money they're spending when we can reach this level of success."

-- Boise State president Robert Kustra

There was an interesting article on the front page of the LA Times yesterday, talking about the escalating salaries among college coaches.

The Times article reminded me about a fascinating series in USA Today back in November that explored a number of these issues in depth (and included an insightful database of coaching compensation). Of course salary is only one part of the compensation package for a top coach. Kirk Ferentz of Iowa, for example, has a base salary of only $1.4 million, but is guaranteed another $1.4 million in supplemental compensation for media and other obligations. In addition, many coaching contracts have a number of substantial perks, incentives and disincentives built into them. (For example, many coaches have an "out" clause for highly-desired jobs; check out Les Miles' penalty for taking a job at Michigan). As a case study of how football success (and increased revenue) ripples through an entire institution, USA Today looked at Oklahoma and Bob Stoops, who until Nick Saban was lured to Alabama was the only college coach to surpass $3 million in annual base salary. The whole series of articles is well worth a read.

Notre Dame has always spread around the windfall generated by football, injecting it into other parts of the University that need it. Last year, the Fiesta Bowl proceeds (about $11.2 million after expenses) were split up among a variety of causes, including purchases for the library, student financial aid, and equipment for Jordan Hall. But it was only until Charlie's contract that the University would pay top dollar for coaching talent commensurate with the revenue the football program generates. An article in Forbes recently named ND the Most Valuable College Football Team:

The Fighting Irish football program is worth $97 million based on what the team contributes to the university’s athletic department for non-football sports ($23.5 million), the University’s academic use ($23.2 million), and the incremental sales to South Bend, Ind., and the surrounding county when the team plays games at Notre Dame Stadium.

Big advantage for the Fighting Irish: A $9 million annual broadcasting fee from NBC, owned by General Electric, by far the most for any team. It also helps Notre Dame that it plays as an independent team, not belonging to an NCAA conference--so it doesn't have to share its broadcasting and bowl revenue the way other schools do.
More on this in a bit.