Integrated College and NFL Coaching Market May Change All of College Athletics
As the college football season and the NFL regular season wind down, the annual coaching carousel is spinning again. Christmas is the season of rumors, inside sources and statements by agents -- leaving fans across the country waiting to see who will be coaching their team.
Fans should note far more rumors prove to be false than true so each should be taken with a giant grain of salt.
A re-emerging trend is spinning the carousel faster while driving up a major cost of big-time college football. Given high-profile failures like Steve Spurrier in Washington, there was an era when many NFL owners and GMs viewed hiring a college coach as risky. That dynamic has changed with Pete Carroll at Seattle and Chip Kelly at Philadelphia having success coming from USC and Oregon respectively.
The instability at the top of the coaching marketplace (the NFL) has once again filtered down to the college game. NFL and NCAA football coaches risk becoming the equivalent of NASCAR drivers. If Lowe's is paying to sponsor Jimmie Johnson's team he will wear their logo, drive their car and lead their team.
The same could go for NCAA coaches. They'll wear the logo of the team issuing their paycheck. The schools are a big part of the problem too, showing little interest in loyalty to the coaches or honoring the contracts.
With Mack Brown resigning at Texas after 16 seasons there are just seven major-college coaches (under 6%) that have spent a decade or more at their school — among them Frank Beamer at Virginia Tech (27 seasons) Bob Stoops at Oklahoma (15 seasons) and Kirk Ferentz at Iowa (15 seasons).
The average length of coaches' stays at their current schools right now is 3.5 years — not even enough time to see their first recruiting class graduate.
Why the short stays? More money leads to coaches switching jobs, but also fuels fan impatience. Fans see high salaries along with high ticket prices and they want all that money to lead to winning.
But there is an inherent danger to college athletics.
Facing a potential threat from the University of Texas, Alabama gave Nick Saban an annual salary reported to be in excess of $7 million. Less than two decades ago University of Tennessee Head Coach Phil Fulmer struck what was then believed to be the first publicly-disclosed deal worth over $1 million a year. (For those scoring at home that seven fold increase far outpaces the inflation rate of 57.3%)
Today a major college coach making $1 million is near the bottom of the pay scale.
But given the huge television contracts there should be no problem paying these salaries. You may ask, what is the harm if the market will bear this cost of doing business?
There are three (and maybe more) looming problems.
First, the vast majority of athletic departments (that is athletic departments not football programs) are not self-sustaining. Increased spending on coaches' salaries cuts football profit margins. That leaves less money for other sports. At a school like Alabama with just 17 sports there is plenty of money, but other schools fund over two dozen sports with football and basketball profits. Shortfalls are often covered from the university's academic budgets.
With universities facing lower state appropriations the pressure to reduce athletic department subsidies from a school's academic budget is immense. To keep up schools often cut non-revenue sports.
The second problem may still be a few years away but it is a much larger potential threat. As the money grows, the staggering numbers attract more attention. The public perceives student-athletes trying to get by on a scholarship as "free labor." Coaches making huge salaries can switch jobs or play one job off on another while the student-athlete has no ability to manipulate the market.
Student-athletes also see billion dollar television contracts. The concept of student-athletes' rights is building. If a move is made to pay players or just to subsidize student-athletes' scholarships the athletic department costs will climb immediately.
The third potential long-range problem is the one huge key to the college athletic department business model; their non-profit status. That allows them to accept tax-deductible donations that donors leverage for access to tickets and programs.
With the dollar figures growing so large for television contracts and coaches' salaries, eventually someone in government will re-examine the non-profit status of big money college athletics. If season ticket donations lose all tax benefits the real cost of buying tickets goes way up. Without tax exempt status, athletic departments' cost of doing business will rise dramatically. For many departments that is a doomsday scenario.
The integration of the NFL and college coaching salary market has created instability in the college coaching market. But even more importantly, the exponential salary growth poses a public relations threat, possibly altering the long-term landscape of college sports.
Universities that neither honor nor enforce the contracts are every bit as much to blame as the coaches who work the market to their benefit. Only time will tell but potentially damaging consequences may be just over the horizon.