Why are coaching salaries rising?

mgoblog's Brian Cook has stridently criticized arguments in favor of various proposals for compensating college athletes. Cook's opposition is so attractive precisely because it's not grounded in appeals to tradition, or vague concepts like "amateurism." The Rutgers fan tends to be even more favorably inclined to burn the system down entirely compared to fans of what is, essentially, the IBM of college sports. At the same time, we recognize the tangible value of our seat at the table and are not exactly inclined to let the barbarians overrun the gates entirely. What Cook is saying has appeal beyond that central factor. There is a lot of merit to aspects of these proposals to pay players, but the consequences are not well anticipated, and an awfully high number of shaky assumptions are coming along for the ride.

The latest missive in this series comes back to a critical point that is often overlooked in these debates. There is a distinction between "revenue" and "non-revenue" sports for a reason. Football and men's basketball make money, while other sports largely do not. "Big-time" college sports are hammered for not having enough fealty to a university's academic mission, but transferring funds used for funding academics to an athletic department is a cardinal sin. As it should be, although athletic departments are not at all permitted to operate as businesses solely concerned with making a profit. This creates the very odd setup (with weird historical causes), where college football and basketball operate as the primary top-level minor leagues for the NBA and NFL, while at the same time remaining a part of non-profit educational institutions.

Brian mentioned in his post trying to secure any available data that would shed light on how coaching salaries in college sports have risen over time. There's a wealth of figures available from, say, USA Today, that can be plugged in to a spreadsheet, but as far as he can tell those projects only go back to about 2004 or so. Wondering if there were any similar efforts from the pre-digital age, I threw a few terms into my NewsBank account (naturally in want of electronic access to Lexis-Nexis.) Unfortunately, my searches were either too narrow (did find a few good accounts of Rutgers athletic spending from the nineties), or far too broad, resulting in a flood of tens of thousands of hits that I could not possibly comb through with my limited resources. A couple interesting things did come up however. It made not be possible to answer what exactly happened, but there are a few possible explanations out there as to why it did.

I had the vague recollection that the Orlando Sentinel published a story two years ago about the general rise of coaching salaries in college athletics, which I linked at the time. The Sentinel is the same paper that sees fit to employ Mike Bianchi mind you, so of course their site deletes "older" articles after an extremely brief time frame without even a cursory explanation coupled with a paywall link. (I often wonder how annoying it would be if I passed on my various online monetization ideas for media outlets, afraid that it's all common sense drivel that would be in place if not for budget woes and/or institutional sclerosis.) Unfortunately the piece ("COME ON DOWN - Coaches still lining up for rising pay", 7/30/09) only included the same salary data that is readily available today, but did include this one little bit of interest at the end from Stanford athletic director Bob Bowlsby.

"I don't know that there's an opportunity for legislative relief," he said. "I don't know that we can collaborate with some member institutions to control the marketplace. . . .

"I don't see a cap coming on it because we lost that battle once before with restricted earning coaches. I think it's restraint of trade and we'd probably lose again. I think the market has to somehow take care of it."

That's when a figurative light bulb went off, because one of the very first things that came up on NewsBank was this 1998 piece from the New York Times about an appeals judgment in favor of a class of part-time coaches.

A Federal jury in Kansas awarded more than $66 million yesterday to 1,900 assistant college coaches whose salaries were found to have been illegally restricted by the National Collegiate Athletic Association. The penalty, which included more than $22 million in back wages, penalties and legal fees that were tripled under Federal antitrust law, was by far the largest court assessment against the association, which regulates and administers major intercollegiate sports.

The verdict came after five years of often tortuous legal wrangling, in which the coaches contended that a blanket rule imposed by the N.C.A.A. in 1992 to restrict the salaries of certain assistant coaches to $12,000 for an academic year had stifled competition and deprived them of fair market wages.

The N.C.A.A., which said yesterday that it was considering appealing the award, had established the salary limit for certain assistant coaches at the 300 major athletic programs that make up Division I college sports as a way of containing costs.

I did not even have the faintest clue about this case; it was not remotely on my radar! How could a piece of jurisprudence of such utmost importance, with far-reverberating effects to this day fade from the public consciousness in the following decade? It hardly went unnoticed. Certainly a lot of the themes addressed therein should strike a few familiar chords for those following the ongoing player amateurism debates.

The N.C.A.A. likened the lower-tier assistant coaches to graduate student teaching assistants in history or math, who traditionally work long hours for low pay and valuable experience.

In effect, the jury agreed with the contention of the coaches that the millions of dollars generated by college sports made any comparison to teaching History 101 misplaced.

The coaches had sought $30 million, basing their claim on estimates of what they would have earned in a fully open market. The $12,000 cap, the coaches said, often amounted to less than a third of what others who did similar work at major universities were paid.

Murray Sperber, a professor of English and American studies at Indiana University and an expert on the N.C.A.A., said: ''Very few Americans believe that college basketball and football are really amateur sports anymore.

''Today the jury basically said, 'No, it's a professional organization and the market should rule.' ''

The antitrust case in question was Law v. National Collegiate Athletic Association, with the NCAA eventually unsuccessful in exhausting their appeals. The NCAA hardly seems to have much of a case with the opinion's background describing textbook collusion.

In January of 1989, the NCAA established a Cost Reduction Committee (the "Committee") to consider means and strategies for reducing the costs of intercollegiate athletics "without disturbing the competitive balance" among NCAA member institutions. The Committee included financial aid personnel, inter-collegiate athletic administrators, college presidents, university faculty members, and a university chancellor. In his initial letter to Committee members, the Chairman of the Committee thanked participants for joining "this gigantic attempt to save intercollegiate athletics from itself." It was felt that only a collaborative effort could reduce costs effectively while maintaining a level playing field because individual schools could not afford to make unilateral spending cuts in sports programs for fear that doing so would unduly hamstring that school's ability to compete against other institutions that spent more money on athletics. In January of 1990, the Chairman told NCAA members that the goal of the Committee was to "cut costs and save money." It became the consensus of the Committee that reducing the total number of coaching positions would reduce the cost of intercollegiate athletic programs.

The Committee proposed an array of recommendations to amend the NCAA's bylaws, including proposed Bylaw 11.6.4 that would limit Division I basketball coaching staffs to four members--one head coach, two assistant coaches, and one entry-level coach called a "restricted-earnings coach".The restricted-earnings coach category was created to replace the positions of part-time assistant, graduate assistant, and volunteer coach. The Committee believed that doing so would resolve the inequity that existed between those schools with graduate programs that could hire graduate assistant coaches and those who could not while reducing the overall amount spent on coaching salaries.

A second proposed rule, Bylaw 11.02.3, restricted compensation of restricted-earnings coaches in all Division I sports other than football to a total of $12,000 for the academic year and $4,000 for the summer months (the "REC Rule" for restricted-earnings coaches). The Committee determined that the $16,000 per year total figure approximated the cost of out-of-state tuition for graduate schools at public institutions and the average graduate school tuition at private institutions, and was thus roughly equivalent to the salaries previously paid to part-time graduate assistant coaches. The REC Rule did allow restricted-earnings coaches to receive additional compensation for performing duties for another department of the institution provided that (1) such compensation is commensurate with that received by others performing the same or similar assignments, (2) the ratio of compensation received for coaching duties and any other duties is directly proportional to the amount of time devoted to the two areas of assignment, and (3) the individual is qualified for and actually performs the duties outside the athletic department for which the individual is compensated. The REC Rule did not prevent member institutions from using savings gained by reducing the number and salary of basketball coaches to increase expenditures on other aspects of their athletic programs.

Dennis Dodd reported ten years ago that the two sides finally agreed on damages in 1999, with the payments starting to go out in 2001. Bowlsby could just be looking for a scapegoat, but what if his comments have a ring of truth to them? Were the NCAA and athletic departments so stung by their crushing defeat that they believed any further efforts at regulation were likely doomed to failure, especially when it came to stemming top-level compensation?

Keep in mind that is debate is hardly revelatory, having been around at the very the minimum for a decade. Nor is the above by any means the only possible explanation. For one example read Florida A.D. Jeremy Foley's comments about Steve Spurrier (from "LOYALTY PAYS FOR COLLEGE COACHES WHO STAY" from The State on 12/17/2000.)

The Million Dollar Club, which used to be the exclusive fraternity of Florida's Steve Spurrier and Florida State's Bobby Bowden, has been infiltrated by practically every clipboard-toting coach with a bowl win to his name.

Where did all this start? Mostly with Spurrier, who was annually pursued by teams in the NFL.

He went to Florida in 1990 for $335,000 a year. His most recent raise, signed this past week, bumps him to $2.1 million annually.

"It moved in that direction because the market we were competing against was the NFL," said Jeremy Foley, Florida's athletics director. "We could have taken the tact that we couldn't compete with the NFL and thank him on his way out. Or we could recognize his value to the university."

Another explanation ("BIG MONEY SWEETENS THE COACHING CHASE - WITH COLLEGE COACHES JOINING THE `$1 MILLION CLUB,' THE PRESSURE TO PERFORM IS BECOMING MORE INTENSE. ", Orlando Sentinel, 12/1/2000) blames the common culprits of increased turnover, expectations, and pressure. There's more money at stake, so athletic departments roll the dice dreaming of being the next Florida. A decade ago fourteen head coaches were known to be making seven figures, and now the exceptions are coaches making below that psychological barrier in one of the six BCS conferences. Surely that's not all attributable to inflation.

Sorting through these accounts should be where Brian's want of data truly would come into play. The common perception is that salaries exploded over the past decade, which indirectly supports Bowlsby's hypothesis. After Law, they dare not try anything of that sort again. Anecdote and intuition are no substitute for data however, so anyone with access to that information or even any sort of useful lead should by all means speak up. What is clear is that these sort of debates did not materialize out of the ether last week, and it would be little surprise if they went further back akin to college athletics recruiting, steroids, sabermetrics, and all sorts of other supposedly contemporary topics with far-older origins, like the way youth culture is always foreboding the end of civilization.

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