College Coach Roulette

06/02/2010 05:12 am ET | Updated May 25, 2011
  • Roger I. Abrams Richardson Professor of Law, Northeastern University; Author

It is that time of year again when some college basketball coaches cash in on their team's success by trading up to better jobs. Siena's coach Fran McCaffery was hired by Iowa, and Tony Barbee moved from UTEP to Auburn. Other coaches, of course, cash in their chips while being escorted off campus. The revolving door, while perhaps understandable in a world where immediate success on the court is essential for job security, can be devastating for those involved: Holy Cross fired Sean Kearney after one season, Iowa fired Todd Lickliter after three seasons making room for McCaffery. Penn and Dartmouth fired their coaches midseason. Wouldn't it be nicer not to refer to this latter group of coaches as having been "fired?" We could instead use the prevailing sports' euphemism -- "released" -- as in Coach Al Skinner was "released" by Boston College.

As the only employee directly responsible for producing college basketball, college coaches have reaped enormous wealth. Many of their basketball programs produce profits for their colleges and universities because they are not saddled with a hundred or so players like football. Their overhead is significantly lower, leaving economic "rents" to distribute. Because you can't give the money directly to the athletes, the coaches can cash in. NCAA rules limit players' "pay" to tuition, room, board and books.

The rise in coaches' salaries the past decade has been rather remarkable. In 2003, Sports Illustrated reported that the highest paid public employee in Iowa was the Iowa State basketball coach Larry Eustachy, who earned $1.1 million, four times the salary of the president of that institution. (In 2004, Eustachy moved up to $1.6 million a season at Mississippi State after photographs were published by the Des Moines Register showing him at a college party kissing and being kissed by young women.) Tubby Smith at Kentucky led the pack back then at $2.42 million. It all seems like chicken feed compared with today's salaries.

John Calipari, Smith's successor at Kentucky, now earns $4 million a year, with Billy Donovan at $3.5 million and Bill Self at Kansas, not too far behind, at $3 million. These men are extraordinarily good at their jobs, and, as I have often said regarding free agent athletes, they are worth what the market will pay them. With college basketball coaches, however, the market is skewed by the artificial rule that the players cannot be compensated for their role in producing the product.

What would happen if the players were able to share in the "profits?" We can compare the college and professional markets to get some idea - not in terms of take home pay, but rather by comparing coaches' salaries with their players. College athletes "earn" tuition, room, board, and books, which can be valued at $40-50,000 a year, maybe more for a high-priced private school like Stanford or Duke. If coaches at these schools earn a million dollars a year - actually Coach Johnny Dawkins at Stanford earns about that, but Coach K at Duke earns $3.6 million -- that is 20 times what their charges earn. The average NBA player salary is $5.4 million a year, and NBA coaches earn slightly more than $4 million a year. Although this is somewhat like comparing apples to oranges, you do get some idea how well the college coaches make out in their own system.

There is another inflating factor in setting the salaries of college coaches. The athletic director has a vested interest in paying the coach a substantial salary, because his salary level is normally adjusted by that comparator. Although colleges and universities claim to have attempted to keep costs down and tuition under control, all bets are off when it comes to pay for a winning coach.

As the college basketball season reaches its denouement in Indianapolis, we can say with confidence that the four coaches who brought their teams to Lucas Oil Stadium will be well compensated for their efforts. Many of the young men who will perform are also bankable. For the few fans who still have live NCAA brackets, this will be a glorious few days. Everyone seems happy with the way things are.