College coaches hitting pay dirt
MONEY MADNESS: Basketball, football revenue sends salaries soaring on U.S. campuses
LEXINGTON, Ky.— In a city where investment bankers and coal magnates pay US$10,000 or more for University of Kentucky men’s basketball season tickets, being head coach of the Wildcats has long been a high-pressure job with rich financial rewards.
In 2006, former Kentucky coach Tubby Smith made $2.6 million (all figures are in U.S. dollars). In the decade that followed, as Kentucky athletics earnings climbed from $68 million to $132 million, pay for the leader of its flagship team skyrocketed. In 2016, John Calipari made $8.6 million, an amount Kentucky officials justify as fair market value for a coach whose team will generate tens of millions of dollars.
But as more money has surged into Kentucky athletics, records show Calipari isn’t the only coach cashing in while the athletes remain amateurs. From 2006 to 2016, pay for Kentucky’s track and field coach climbed from $108,000 to $429,000; men’s tennis coach pay jumped from $122,000 to $230,000; and gymnastics coach pay rose from $112,000 to $252,000. Every coach made more than the school’s average full professor’s salary.
In a phenomenon playing out across the country, salaries are soaring for coaches of lower-profile college sports largely subsidized by lucrative football and men’s basketball programs.
At the University of Kansas, men’s golf coach pay jumped from $84,000 to $201,000 over the past decade. At the University of Virginia, pay for the women’s volleyball coach rose from $94,000 to $221,000. And at West Virginia University, men’s soccer coach pay jumped from $66,000 to $188,000.
(All 2006 figures have been adjusted for inflation.)
Pay for these coaches still seems paltry when compared to the massive sums going to men’s basketball and football coaches. In 2016, Calipari made more in three weeks than Wildcats track and field coach Edrick Floreal made all year.
But a 298 per cent pay increase for the same job — Kentucky track and field coach — is startling when compared to what happened in the rest of the economy between 2006 and 2016, a time span that includes a deep recession. Median pay for the average American worker increased 0.7 per cent, and even workers in the 95th percentile — those making more than 95 per cent of the rest of America — saw pay rise just 13 per cent, said Elise Gould, senior economist with the Economic Policy Institute.
“You have to recognize that everything crashed in 2008,” said Gould, referring to the financial crisis that year.
In athletic departments at Kentucky and other schools — particularly in the five wealthiest collegiate conferences — it’s almost as if the recession didn’t happen.
To officials in these sports — known in U.S. college athletics circles as “non-revenue” or “Olympic” sports — the recent salary surge is finally creating decent pay for important jobs.
“I certainly don’t think anyone’s overpaid; I think the salary has risen for that position,” said Sam Seemes, chief executive of the U.S. Track and Field and Cross Country Coaches Association. “If these schools weren’t bringing in the revenue that they are, the coaches wouldn’t be making as much money ... In the United States, the companies that do the best pay more. It’s just fundamental.”
These “companies,” however, are non-profit athletic departments largely funded by two teams: men’s basketball and football. Because of the way television and media rights contracts are negotiated and paid, it’s difficult to determine precisely how much Kentucky athletics revenue in 2016 was attributable to basketball and football. A look at ticket sales, though, offers a glimpse Kentucky officials acknowledge is indicative of the entire department’s bottom line.
“In the United States, the companies that do the best pay more. It’s just fundamental.” — Sam Seemes
In 2016, Kentucky’s men’s basketball generated $19.5 million in ticket sales, and football generated $16.4 million. The other 20 varsity sports combined grossed about $1.3 million.
The debate over whether the men’s basketball and football players who fuel all this spending and earning should be able to make some money for themselves — either through paycheques or endorsements — remains the subject of litigation that threatens to overturn the economic structure of college sports.
“It’s a system that takes money that should be rightfully going to athletes, many of whom are minorities from underprivileged backgrounds, and re-allocates it to coaches and athletic directors, many of whom are middle-aged white men ... How can you call that just?” said Andy Schwarz, an economist who has consulted for several lawsuits against the NCAA and college conferences.
Kentucky Athletic Director Mitch Barnhart, whose salary rose from $480,000 to $695,000 in a decade, said the raises he has paid out reflect the market for good coaches in each of those sports. Kentucky athletics is one of the few self-sufficient departments in the country, and recently did something that may be unprecedented in American higher education: paid for a building that will not benefit athletics in any way. Kentucky athletics contributed $65 million for a new $112 million science building on campus.
“I get a bit disheartened when I find people who keep trying to find the bad in what we do,” Barnhart said. “I’m not a lawyer, I’m not an economist, I don’t know all of those pieces, but I know that what we do is good.”
In late February, the Wildcats baseball team was playing its 2017 home opener against Eastern Kentucky. In the dugout, Wildcats coach Nick Mingione — who is making $375,000 this year, up from the $235,000 the job paid in 2006 — clapped and shouted encouragement, as did the sparse crowd of about 150 in the stands. The Wildcats won 12-0.
This will be one of the last seasons for Cliff Hagan Stadium, Kentucky baseball’s home since 1969. There are no obvious signs of disrepair — the stadium has been renovated repeatedly, the last time in 2006 — but in the hyper-competitive world of Southeastern Conference baseball, a professional-quality stadium is needed to lure top recruits. Kentucky has started construction of a $49 million baseball stadium that will feature artificial turf, permanent seating for 2,500 and the ability to offer expanded seating for up to 7,000.
Kentucky’s baseball team, like many even in wealthier conferences, does not return a profit; the team generated $427,000 in 2016. But Barnhart wants to see the Wildcats contend for championships, and a new stadium is a must to keep up with those at Louisiana State ($36 million, opened in 2009), South Carolina ($35 million, opened in 2009), and Alabama ($42 million, completed in 2016).
“In the SEC, it’s been crazy. You’ve got these cathedrals that have been erected across the landscape,” said Cary Caro, an assistant professor of business at Xavier University in Louisiana.
Last year, Caro analyzed college baseball financials in the five wealthiest conferences. From 2007 to 2014, Caro found the average baseball team saw revenue grow from $800,000 to $1.5 million, but those gains were swallowed up by spending growth from $1.4 million to $2.6 million.
When Caro cast a wider net, and looked at spending in all varsity sports, he saw a similar trend. From 2009 until 2014, the percentage of money schools in the wealthiest conferences spent on each sport didn’t change much. There was just more basketball and football money to spread around.
As schools have invested more in baseball — seen as having potential to grow into a money-making sport — coaches recently have joined seven-figure pay ranks previously restricted to football and men’s and women’s basketball.
In 2016, longtime Texas coach Augie Garrido’s pay hit $1.1 million. Garrido stepped down in May, but the ripple effect of one coach crossing the seven-figure threshold prompted raises across the country. In June, Louisville made Dan McDonnell the highest-paid college baseball coach in the country, with a 10-year, $10.6 million contract. McConnell held that distinction for three months, until Florida signed Kevin O’Sullivan to a 10-year, $12.5 million contract in September.
As pay continues to rise — driven in part by federal law that mandates similar spending on men’s and women’s sports, and equal pay for men and women — an income gap is growing between Kentucky athletics and the university’s teachers.
In 2006, the average full professor at Kentucky made $111,000, as much or more than the coaches in five sports (women’s tennis, softball, women’s golf, track and field, and rifle). By 2016, every Kentucky coach made more than the average full professor’s $121,000 salary. The lowest paid Kentucky coach — Rifle coach Harry Mullins — made $133,000.
An hour before the tipoff of the Kentucky-Vanderbilt men’s basketball game on Feb. 28, more people filled the stands in Rupp Arena than likely will attend any Wildcats baseball game this season. By 8 p.m., fans filled in much of the lower bowl of the 23,500-seat arena, where Wildcats boosters annually donate $500 to $5,000 just to get the privilege of being able to buy season tickets.
In 2014, the Louisville Business Journal published a database of Wildcats season-ticket holders, obtained through an open records request. A real estate developer donated $60,000 for the right to buy 16 seats, records showed, while a coal magnate gave $40,000 for the right to get eight courtside seats. Investment bank J.P. Morgan Chase paid $36,000 to buy 25 seats throughout the arena.
At halftime, Mingione came out on the court for a contest and implored fans to come see his baseball team. During a stoppage in the second half, the Wildcats softball team — whose coach made $280,000 in 2016, up from $111,000 in 2006 — tossed T-shirts into stands.
Barnhart expressed frustration with economists and lawyers who argue college athletic departments like his enjoy steadily rising revenue and paychecks because they oversee an entertainment industry that has collectively controlled the cost of its entertainers.
“Nobody goes into business and says I want to be a top-100 business but I’m not going to spend what it takes to reach that level,” he said. “Why would you do that?”