Coaches' pay drive increased athletic budgets

by Jane Stancil, News and Observer, December 7,2013.

When the Duke and Florida State football teams clash Saturday for the Atlantic Coast Conference championship, there will be money on the line for the schools – and for the coaches on the sidelines.

A sharp escalation in coach compensation is a driving factor in athletic spending, according to data released this week by the Knight Commission on Intercollegiate Athletics, an organization that advocates for reform in college athletics. An interactive database,spendingdatabase.knightcommission.org, shows that spending on athletics has dramatically outpaced spending on academics at many public universities in a six-year period from 2005 to 2011. (Private universities, which are generally not compelled to release detailed data, are not included in the database).

At a time when faculty and staff at North Carolina’s public universities have seen little or no raises during and since the recession, coaches have enjoyed lucrative paydays.

For example, spending on football coach salaries, calculated on a per player basis, more than doubled at N.C. State University and UNC-Chapel Hill from 2005 to 2011, according to the database.

In 2011, total salary spending for all coaches reached $12 million at UNC-CH, a 61 percent increase over 2005. At NCSU, spending on coaches reached $10 million, a jump of 71 percent during the same period. Those figures include salaries, benefits and bonuses paid by the university, and contractually guaranteed sums from third parties. UNC-CH has 28 sports teams; NCSU has 23.

Duke vs. Florida State

In the case of Saturday’s combatants, Florida State Coach Jimbo Fisher has a compensation package of $2.75 million, while David Cutcliffe of Duke makes $1.79 million, according to a coach salary database from USA Today. The highest-paid college football coach in the United States is Nick Saban of the University of Alabama, whose compensation totals $5.5 million, USA Today reported.

“The market has gone crazy,” said Diane Moose, NCSU senior associate athletic director and chief financial officer, “especially football and men’s basketball salaries.”

She can’t explain why, but if no one came to the games, the money wouldn’t flow to support the high pay. NCSU’s athletic department is an auxiliary operation, she said, which means taxpayer dollars don’t go to the athletic department.

There’s no way around offering contracts that lure good candidates to coaching jobs, she said.

“If we want to compete at the highest levels,” Moose said, “we need to make sure we put the staff in place that can get us there.”

Knowing the salary data, and other trends in athletic budgets, is key to achieving responsible spending in college sports, said Amy Perko, executive director of the Knight Commission.

“We are at a time when all of U.S. higher education is under unprecedented pressure to be more transparent to the public and more accountable for the results it achieves, so college sports cannot expect to be immune to the same standards,” she said.

Athletic arms race

The database unveiled this week is aimed at igniting a more informed discussion about the direction of the finances of college athletics, Perko said.

Some academic leaders have warned that the so-called arms race in college sports is simply not sustainable, especially when there is greater scrutiny by parents and political leaders on the rising costs of a college degree.

Earlier this year, an independent panel led by Hunter Rawlings, president of the Association of American Universities, recommended that conferences and the NCAA explore spending caps for specific sports and incentives based on athletic-to-academic expense ratios to discourage excessive sports spending. The Rawlings group was put together by UNC-CH after a series of athletic and academic scandals there.

So far, there’s been no movement by universities or conferences to implement those recommendations.

Instead, coach contracts are laden with financial incentives for winning bowls and postseason tournaments, as well as hitting goals on athletes’ academic progress. And universities are saddled with bigger buyout costs as they routinely fire coaches in the pursuit of winning records.

Last year, when NCSU Athletic Director Debbie Yow fired Tom O’Brien, the university owed the former coach $1.2 million during a four-year period.

His replacement, Dave Doeren, signed a five-year deal worth a minimum of $1.8 million annually. The 18-page contract also spelled out various incentive bonuses worth a maximum of $250,000 for the team’s academic achievements and a maximum of $750,000 for championship games or bowl wins.

Yow could not be reached for comment, but Moose, the senior associate athletic director, said it’s hard to know where the limit is on coach compensation, looking at the top competitors in the country.

“You just have to believe there’s got to be a stopping point somewhere,” Moose said. “You don’t know where that is or what’s going to drive that.”

Doeren, whose team went 3-9 this year with no conference wins, won’t be reaping any of the field performance bonuses this year. He has said he looks forward to a year of rebuilding and improvement.

Duke’s Cutcliffe, who was named national coach of the year, is sure to be eyeing his contract.

His colleague, men’s basketball Coach Mike Krzyzewski, earned about $9.7 million in total compensation in 2011, according to the university’s tax return. That included base pay, incentive bonuses, retirement and deferred compensation.