College football coaches' salaries keep soaring
Consider the Joneses: Texas just raised head football coach Mack Brown's annual salary past $5 million. Alabama, thankful for this month's national championship, bumped Nick Saban up to $4.7 million. Florida's Urban Meyer and LSU's Les Miles pull down slightly less. So, when Pete Carroll ($4.4 million) left for the pros earlier this month, Southern California had to offer Lane Kiffin something well beyond the $2 million he had been getting at Tennessee if it wanted to keep up with the other No. 1s of recent years.
This is what a College Sports 101 primer, released by the watchdog Knight Commission in October, called an "arms race" at the elite level of college athletic programs. USA Today recently reported that, between 2006 and 2009, pay for major college football coaches increased 46 percent, to an average of $1.36 million.
And, while economist Jonathan Orszag said the manner in which "people define an arms race is often confusing," he confirmed that "athletic expenditures tend to increase along with that at other schools in the conference . . . a keeping up with the Joneses thing."
Orszag, who has done a number of studies on spending in college athletics for almost a decade, said in a telephone interview that "in previous reports we've done, in data from the 1990s, we found weak but inconclusive evidence of an arms race. If we look at the 2004 to 2007 period, we do find evidence in support of an arms race."
So, while some are hearing a clarion call for bean counters in college sports during these hard economic times, Orszag sees no bursting of the fabulous coaching salary bubble anytime soon.
"The question of how much a coach is compensated," Orszag said, "depends on a variety of factors, including the options the coach has. Pete Carroll, for example, going to the pros. Compensation at the most prominent football schools depends in part on the compensation in the pros." - where Carroll will get more than $33 million over five years by the Seattle Seahawks.
When the Knight Commission last year surveyed 95 of the 119 presidents of so-called BCS universities, two-thirds of them agreed that current athletic expenditures were "unsustainable." At last week's NCAA convention in Atlanta, Smith College economics professor Andrew Zimbalist called for a partial antitrust exemption from Congress to allow the NCAA to cap salaries of football (and basketball) coaches - as well as a reduction of Division I football scholarships. The University of Texas faculty council called for a discussion of Mack Brown's "unseemly and inappropriate" raise at a time of drastic educational cutbacks.
Yet USC aggressively pursued Kiffin, as Notre Dame threw big money at Brian Kelly to lure him from Cincinnati (while simultaneously buying out the fired Charlie Weis). And name coaches found themselves much in demand when new openings materialized at Texas Tech, Kansas, Cincinnati and Tennessee - all of which paid the previous head coach between $1.2 and $2.3 million.
"Capping coaching salaries is something the NCAA tried with assistant coaches years ago and lost in court in a very severe way," Orszag said. "One would have to show that increased spending on coaching salaries is somehow harming the overall academic experience of students at the school, and I haven't seen evidence of that."
Furthermore, while only 25 percent of BCS presidents called current athletic spending "sustainable" nationwide, when asked about their own economic models, a full 75 percent said their programs were fully sustainable.
That caused marketing consultant Rick Hesel, who conducted the Knight survey, to note that "presidents tend to see the grass is green on their own side of the fence."
That frees them to throw around the big bucks without noticing that "evidence shows the connection between increased spending on head coaches and increasing winning, or increased revenue to the school, is very weak," Orszag said. "But it shows that schools that have had great success love to promote that they've made the right decision, while those that made a mistake [in spending excessively for a coach] don't like highlighting that.
"So it becomes somewhat of conventional wisdom [to pay more for success]. But the concept that, if you just hire this coach and spend a lot of money on him, he will produce a winning team, that's a flawed concept."
The kind of economic studies done by Orzsag, he said, at least can "provide information to presidents to improve their decision making." Still, there is no getting around the fact that they exist in an intensely competitive world, and when the Jonses start putting on coaching muscle with fabulous salaries, the reaction typically is to up the ante: Add muscles on their own muscles.