I love college athletics, and I bet you do too. Again this year we had an endless array of bowl games. Several times I found myself happily watching two schools I hardly knew. None was more exciting than the RoseBowl, in which my beloved Buckeyes came from behind to win in an exciting fashion. I think we are drawn to college games partially because the players are young men and women who are receiving an education opportunity in exchange for the many hours they donate to practicing and building their skills. Most will not go on to play their sport at a professional level.
But college sports is a big business. The television contracts allow universities to make significant amounts of money. For example, 26 football programs make between $28 million and $92 million annually. The top earning programs come in with these millions annually.
The coaches who head up these programs are well paid. If you search the average salary of a college coach you find a modest $48,000 average. That includes coaches from all sports from divisions 1, 2, and 3 level programs. Among division 1 football coaches, the average is $2 million. Within the top conferences, the pay is even higher. The Southeast conference average is $4.3 million. The Big Twelve average is $3.4 million and $3.1 million in the Big Ten.
As of this writing, there are 27 college football coaching changes. If you have one of these top jobs, you better win. Although many coaches’ compensation can be seven or eight figures, the University pays only to about the mid six figures. The additional funds come from the University’s rights, deals and sponsorships. If a college decides to pay out a contract, it typically includes only the base amounts.
The playing field is about to become more complicated. For years, the National College Athletic Association has kept restrictions on college sports to prevent pay-for-play. The players are certainly aware of the huge profits being made, particularly by football and basketball. They see that they are the only ones not being paid. The president of the NCAA makes over four million dollars and billions are made from the NCAA basketball contract. So, NCAA athletes want to be paid. The scholarship no longer is enough. The Supreme Court agreed unanimously, and so as of July 1, 2021, the NCAA is allowing players to be rewarded for the use of their names, images and likenesses. It works like this: Athletes of all three divisions are allowed to monetize endorsements, social media, autograph signings and other financial opportunities. They are allowed to use an agent or representative to broker these kinds of deals.
The most credible estimates forecast that athletes will make a few thousand dollars under the current interim policy. Athletes must report their deals to their colleges who are tasked with making certain that they comply with state laws. I believe that as the door opens wider, the amounts will skyrocket. Every athletic director across the country will develop what they believe is their competitive edge. It also seems likely to me that the big programs flush with cash will have a distinct advantage. As the pay goes up, I look for fewer small school upsets and more ethics issues.
I know, I sound like a curmudgeon. I do favor players being able to profit financially, but we may be opening a can of worms…or rattlesnakes. So, here’s my hypothetical question: If you were an athletic director who was about to hire a coach, what instructions would you build into the employment agreement? Would you tell your coach, “I want you to win the conference title,” or would you tell them to focus on teaching young athletes how to live a virtuous life? I think the answer is both. Winning is important and so is doing the right things. For what coaches are paid, we should expect no less.
Jim Rohrer of Evergreen is a business consultant and author of the books “Improve Your Bottom Line … Develop MVPs Today” and “Never Lose Your Job … Become a More Valuable Player.” Jim’s belief is that common sense is becoming less common. More about Jim at www.theloyaltypartners.com.