Sports- July 2006
When Terry Holland coached basketball at the University of Virginia from 1974 to 1990, he ran a summer camp and started a television show to make a little money on the side. He also negotiated a team shoe contract — a small one, he says — to pay for things he thought his program needed. Even with the extras, Holland estimates his annual compensation at Virginia hovered around $170,000.
Times have changed. Athletic-department budgets are bigger, and so are coaches’ salaries. Holland sits on the other side of the negotiating table now as East Carolina University’s athletic director. Basketball and football coaches at major colleges often receive compensation packages valued in the high six figures or more.
In May, N.C. State hired Sidney Lowe to replace Herb Sendek as its basketball coach. Sendek made about $900,000 a year and led the Wolfpack to a school-best five consecutive appearances in the National Collegiate Athletic Association tournament. He left for Arizona State University because of a perceived lack of fan support — and for $400,000 more a year. Lowe, a former Wolfpack player with no college coaching experience and a dismal 79-228 record as a head coach in the National Basketball Association, accepted the job for total compensation of about $900,000, the same as Sendek.
Although published reports stated that two earlier candidates rejected offers of as much as $2 million, Athletic Director Lee Fowler says he had hoped to find a coach for about $800,000 to $1.2 million. Still, Fowler sees an end to the rapid escalation. “It will slow down. I’m not saying that the guy who wins a national championship will [see his pay] slow down, but all athletic departments are getting to the point where they are maximizing revenue and ticket prices.”
Even at $900,000 — more than double what Erskine Bowles makes as president of the UNC system and nearly three times the salary of N.C. State Chancellor James Oblinger — the school isn’t paying top dollar. At UNC Chapel Hill, Roy Williams has a pay package near $1.6 million. Duke’s Mike Krzyzewski makes about $1.5 million. Wake Forest’s Skip Prosser makes $1 million.
Coaches’ salaries are rising because of the huge revenue streams they generate for universities and the goodwill they engender with alumni and fans — potential donors to their schools. That’s where Sendek fell short, in part because the Wolfpack rarely beat Carolina or Duke. Lowe excites N.C. State followers because of his link to the Wolfpack’s most-recent glory days, when he was a starter on the 1983 NCAA championship team coached by Jim Valvano.
Count Fritz Polite as one who thinks coach pay has gotten out of hand. He is associate director of the Institute for Diversity & Ethics in Sport at the University of Central Florida’s DeVos Sport Business Management Program. “We’re developing and creating a culture where everything is being jacked up. It’s so competitive because big-time college sports is a lucrative business. It’s really about the money. Even though the player is the product, the coach is the driver, and that’s what drives the salaries.”
Nevertheless, Thom Park, a Tallahassee, Fla.-based agent for coaches and a former athletic director at Liberty University, says coaches aren’t always driven by pay. Lowe was “thrilled to go back to his alma mater,” he says. “Most coaches think like that. The money is taken care of by the process.”
In 1995, the process made former Florida football coach Steve Spurrier the first college coach to reach $1 million annually. He’s now paid $1.5 million at South Carolina. Texas football coach Mack Brown, previously at UNC Chapel Hill, gets about $2.6 million annually, roughly equivalent to Oklahoma coach Bob Stoops, his biggest rival.
Most of the compensation comes from perks such as country-club memberships, shoe contracts, television-show deals and annuities or other contracts funded by booster clubs. Holland defends the practice. “We all spend a lot of time and money marketing our coach as the best, so if we do not pay him as if we believe our own words, then we are wasting our marketing effort.”
In December 2004, Holland hired football coach Skip Holtz, who receives a $150,000 base salary but makes $240,000 more for his TV and radio shows. Holtz will receive a $25,000 bonus if his team goes to a bowl game. In March 2005, Holland hired basketball coach Ricky Stokes, who played for him at Virginia. Stokes also got a $150,000 base salary but only makes $40,000 for his TV and radio shows. The pay that Holtz and Stokes receive for the TV and radio shows increases by $25,000 each season. Both make other money from camps, speaking engagements and other sources.
But Holland, whose salary is $282,000, worries that a coach’s passion could change from keeping score to how much he is making. “And once a person has been bought in any profession, they are always for sale to a higher bidder,” Holland says. “It is not a solid foundation on which to build a long-term program.”
Carolina athletic director Dick Baddour used the lure of more money three years ago when he hired a basketball coach to replace Matt Doherty. However, Baddour argues that Williams’ hiring also resulted from the former Kansas coach’s desire to return to his alma mater. Williams’ package includes a $260,000 base salary and $347,300 from his TV show, as well as $3.9 million over five years from the Ram’s Club booster group. At Kansas, his base salary was $129,380. Doherty made a base salary of $150,000. “It’s just like what you would find in corporate America,” Baddour says. “The marketplace drives what the amounts are and what schools are willing to pay.”
Williams also benefits from a Nike shoe contract and the summer basketball camp that he runs on campus. Even Baddour admits that there’s status in having a highly paid coach. “What you want to do, even in the case of Roy, is pay him what the top-level coaches in the country are getting.”
But with the money comes pressure. Polite notes the multimillion-dollar payouts when a football team plays in a major bowl game or a basketball team advances in the NCAA tournament. “If this much money is being generated through economic impact and merchandise sales, the coach becomes very important. Who is going to drive this big moneymaking machine? If the coach doesn’t drive it correctly, then they’re going to be blamed, and a new driver will be found.” And that new driver likely will want more money than the last one.