More and more college coaches are making CEO moneyPosted: Monday June 02, 2003 12:58 PM
By Mike Fish, SI.com
When Iowa State basketball coach Larry Eustachy made headlines last month, it wasn’t just his after-hours partying with female students that raised eyebrows. More than one sports fan -- and not only those in Iowa -- were stunned to learn that Eustachy was the highest-paid public employee in the state, his $1.1 million yearly package about four times what the university president earns.
These days, the best-compensated person on any Division I campus is all but guaranteed to be either the football coach or men's basketball coach. Though college coaches are fond of referring to themselves as "educators," their compensation is not exactly on par with that of the educators who are in charge, say, of the medical or business school. College coaching salaries are more in line with those of entertainers -- or pro coaches.
So all it takes is a glance at Tubby Smith’s new contract at Kentucky to understand why the Wildcats basketball coach hastily shot down rumors linking him to the Philadelphia 76ers' job opening. There’s no buyout or financial penalty in Smith's contract, so he could walk away from the Kentucky bench tomorrow. But Smith would be leaving perhaps the sweetest deal in college basketball -- an eight-year, $20 million pact. Smith's contract with Kentucky may be the gold standard, but a review of other recent coaching contracts indicates that, in this sputtering economy, the coaching business is pretty healthy.
How healthy is the coaching business? At least nine of the 15 basketball coaches hired by major colleges this spring will make more money than their predecessors, and in most cases it's a significant bump. Illinois and Western Kentucky are paying their new guys less, while it’s a salary wash at Arkansas Little-Rock and Cleveland State.
Driven to find the next Tubby Smith, big-time basketball programs -- especially those backed by Division I-A football money -- are more willing than ever to pay. Consider this:
Of course, all this comes with heightened pressure to make noise on the conference and national scene, to play deep into the NCAA tourney. As Bennett puts it, “Not only are coaches paid more, but they are also more likely to lose their jobs."
And most coaches no longer answer only to an athletic director or influential boosters. College presidents are playing more significant roles in the recruitment of high-profile coaches. Why? Like it or not, a school's identity is ofen shaped by its athletic program, and a bad coaching hire, a scandal or an underachieving program can limit the number of talented applicants a school receives.
“At both major public and private institutions, the board is probably going to expect the university president to be involved, too," said Robert Hemenway, chancellor at the University of Kansas. “No one wants to have a situation where the president is saying, ‘Well, I don’t know anything about this’ if there is a scandal. We’re past the age of saying, ‘I’ll trust the athletic director to take care of that.'"
So Hemenway was in the middle of things as Kansas sought a replacement for Roy Williams this spring. And with KU also seeking a new athletic director, the chancellor has decided against the search-firm route will be conducting the search himself, assisted by interim AD Drue Jennings.
Thanks to buyout clauses, hiring a coach can be pricier than it appears. Kansas didn’t hesitate to pay the $500,000 Self owed Illinois for breaking a contract that had only recently been extended. But Illinois hiked the penalty to $1 million for Self's replacement, Bruce Weber. And KU -- which didn’t have a buyout clause for Williams -- plans to write a $1 million penalty into Self’s deal.
But if a school thinks it has found "Coach Right," seven-figure buyouts are simply part of the cost of doing business.
Still, a buyout payment can be a nice consolation, especially if the clause is creatively written. Take a mid-major program like Western Kentucky, with a I-AA football program in which head coach David Elson earns less ($96,000) than the basketball coach. Officials recognized they had a hot property in Dennis Felton -- much like predecessors Gene Keady, Clem Haskins and Ralph Willard -- so they wrote in a $200,000 penalty if Felton left, which Georgia has agreed to pay in monthly installments over the next three years.
So Western Kentucky now is guaranteed two home basketball games with Georgia at freshly renovated E. A. Diddle Arena, which Selig suggests could produce upwards of $200,000 to $300,000 a game.
“We couldn’t get prominent programs from BCS-type leagues willing to come to Western Kentucky and play on our home floor," Selig said. “We figured he’s going to more than likely get a pretty good job and that’ll get us an attractive opponent."
Georgia officials weren’t scared off by the buyout arrangement. Yet with Felton in the Bulldog fold, they’re doubling his buyout penalty to $400,000.
The Tubby Deal
The Kentucky Wildcats and Louisville Cardinals are equally creative in crafting deals for their head coach. One advantage of setting up a separate athletic association outside the university is that it’s not bound by a state law stipulating that contracts can't be longer than four years. Tubby Smith's new deal with the association runs through 2011, and automatically extends to 2013 if Kentucky earns a trip to the Final Four in any of those seasons. No financial buyout is written to protect against Smith leaving for another job. But few places could afford him, and he has millions of incentives to stay, anyway.
Along with his $200,000 base salary -- less than the $260,000 North Carolina will be paying Williams in a contract that's still unsigned -- Smith receives guaranteed annual TV/radio, shoe and apparel income ranging from $1.55 million this season to $2.175 million in 2010-11. He also has a retention bonus of $1.5 million if he stays at Kentucky through April 2007. An additional $2.5 million is due if Smith is still on the bench in 2011.
The deal is loaded with additional incentives, including 20 prime, lower-level basketball tickets and eight tickets to Wildcat football games. Smith is also due $50,000 if his team’s GPA is 3.0 or better. There are four weeks of paid vacation.
And everything is guaranteed in the event Smith is disabled and unable to coach or dies, a clause that athletic officials say is almost unheard of in college sports.
Last year, presumably because of his stature as the Wildcats boss, Smith also pocketed more than $150,000 in outside income, including $15,000 from Michael Jordan’s basketball camp and a $5,000 speaking fee paid by the U.S. Navy and Department of Defense.
“It would be pretty difficult to spirit a coach away from all that," acknowledged Kansas interim AD Drue Jennings.
At lower-level Division I programs, the base salary is about all the head coach can expect to see, other than maybe a courtesy car, a minimal shoe contract and use of campus facilities for his summer camp. Not so for the coaching heavyweights.
Top coaches earn the bulk of their money from TV and shoe/apparel deals, most of which are negotiated and distributed through the university to the coach. A few coaches, such as Williams and his predecessor at North Carolina, Matt Doherty, do their deals outside the university. Doherty's $500,000 Nike deal dwarfed his $150,000 coaching salary.
For coaches like Smith at Kentucky and Self at Kansas, their base salary accounts for only one-tenth of their total compensation package. It probably ranges from one-third to one-fifth with coaches in the major conferences.
Because of his Wisconsin roots, Dick Bennett made sure to agree on travel freebies before packing for the Washington State job. He upgrades to first-class business. His wife, Ann, gets to travel to regular-season road games, joined by their children and grandchildren in the postseason. The family gets 10 domestic airline tickets a year.
“Yeah, I’m a Wisconsin guy, and I think the people who engineered my contract were well aware how hard it was for me to leave that state," said Bennett.
So what is most important in a coaching contract? One is a rollover clause that kicks in after every season, so that the contract is always at its full length. Bennett ventures that coaches are living on the edge if they aren’t working on a five-year deal.
“When I say five, I mean you are always operating with a five-year contract," he said. “It’s easier [for a college] to end a relationship if it is less than that. On top of that, it affects recruiting because the kids are pretty savvy."
Oddly, the rollover clause that Bennett told us about doesn't exist in his contract. He laughs about not paying attention to contract details. But after coaching 36 years in Wisconsin, the 60-year-old Bennett is already drawing a pension from that state.
“Anything here," he said, "was gravy."
Mike Fish is a senior writer for SI.com.
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