Price tag for SEC football coaches surges : govolsxtra.com

Ask around enough, and you'll learn that the sky began falling in 1982. That's when Jackie Sherrill left Pittsburgh for Texas A&M and what was then a staggering amount of money for a football coach.

The New York Times reported at the time that Sherrill, who later coached Mississippi State, would earn $1.7 million over the life of his seven-year contract - about $240,000 a year - and become the highest paid college football coach in America.

So if you want a scapegoat for the bull market in coaches' salaries, blame the man who supposedly castrated a bull during practice to fire up his team.

Or blame Bobby Bowden and Steve Spurrier, who became two of the first million-dollar-a-year coaches in the 1990s.

Or Nick Saban and his $32 million contract to coach Alabama.

As long as coaches have blown whistles, it seems, a winner is always in demand.

Combine the fervor for championship-level football in the SEC with deep pockets and growing revenue, and it's little surprise that football coaches are among some of the highest earners - state employee or otherwise - all over the South.

"It is an arms race of sorts," says Don Hinchey, vice president of communications with the Bonham Group, a Denver-based sports marketing firm. "I kind of liken it to a live auction. When you put money, passion and expertise together, that's the recipe for a big salary."

And they're only going to get bigger.

Economics on The Hill

At Tennessee, the situation is somewhat unique. Phillip Fulmer rose through the ranks in Knoxville, from position coach to coordinator to head coach to proven championship coach all in the same stadium.

Fulmer, the longest tenured coach in the SEC and set to enter his 17th season this fall, began his career in 1993 earning $300,000. Last year, he earned $2.05 million.

Over those 16 seasons, his salary has increased more than 500 percent. And it's going to increase even more, pending a new deal that could be announced as early as Monday.

But as Fulmer's salary has risen, so too has revenue.

According to UT athletic director Mike Hamilton, donations at UT have risen from about $4 million in 1992 to a record $34 million for fiscal 2006-07. The Associated Press reported that as of April, athletic donations were up about $5 million over the same time a year ago.

UT's budget has continued to climb as well.

According to figures presented at April's athletics board meeting, Tennessee generated $86.3 million in total revenue. Some $23 million of that comes directly from football tickets, the largest single revenue source for the athletic department. And football alone is responsible for 85 percent of UT's total revenue, Hamilton estimates. Fulmer's current salary represents just 2.3 percent of UT's budgeted athletic costs.

When Fulmer became head coach, UT's budget was about $28 million.

And athletic departments are getting more money than ever from the Southeastern Conference. In 1993, the SEC distributed a total of $34.34 million, about $2.82 million to each of its member schools.

In May, the SEC announced shared revenue of $127.2 million, which means $10.6 million per school. That sum would more than cover the combined salaries of every coaching staff in the league with plenty left over.

Of the $127.2 million, some 70 percent comes from football television rights, bowl payouts and the conference football championship game. And shared revenue will surely grow when the SEC signs a new blockbuster television deal later this year.

Universities have also taken advantage of new revenue streams, from such sources as corporate sponsorship, multi-media ventures or luxury-seating options, which all allow for bigger budgets.

"While we want to be competitive in the marketplace, we also have to make sure that we budget correctly and meet our expenses," Hamilton said. "Knowing full well that football's generating the lion's share of the revenue for the department, that's an interesting balance you have to cut from time to time."

Maintaining that balance this year has already proved challenging. UT increased season tickets by $19 and for the first time will charge students admission for football games this season to help generate a projected $7.8 million increase in next year's budget.

Still, Tennessee's athletic department is one of a handful nationwide that does not take money from the university. In fact, the athletic department is projected to give the university $2.82 million this fiscal year.

But the pending contract extension and raises for Fulmer and his staff (as well as raises for Tennessee's men's and women's basketball coaches) have an effect.

CEOs of Football

When Dan Parker sits down with a coach, he almost always poses the same question.

"In a search today we ask a football coach, 'What's it like to be CEO of football?' There's no question they are," says Parker, president of Parker Executive Search, an Atlanta group that recruits high-level corporate employees for major companies as well as assists universities in hiring coaches. "They're generating revenue. They're generating profit margins."

And because there isn't exactly a surplus of proven, championship-caliber coaches, schools will often pay a pretty penny (or a few hundred million of those pretty pennies) to hire one.

A quick look around the SEC, which boasts an unprecedented five coaches who have won national titles, reveals as much.

Those coaches - Alabama's Saban, LSU's Les Miles, South Carolina's Steve Spurrier, Florida's Urban Meyer and Fulmer - average about $2.96 million in annual salary, according to current figures. By contrast, the other six coaches average $2.24 million. That figure does not count Vanderbilt, which as a private school does not have to release coaches' salaries.

"The pool of proven coaches, proven successful, championship coaches, is so shallow that people are willing to go above and beyond what they would do before to hire a proven coach," said Parker. "Almost every search we get asks for a proven championship coach. It's the expectation for winning and desire to have a proven coach that can get them there."

Agent Jimmy Sexton, whose Memphis-based firm Athletic Resource Management represents Fulmer, Saban, Spurrier, Ole Miss' Houston Nutt and a slew of other high-profile coaches in both the NFL and college ranks, sees some of the CEO-type duties as a reason for increased salaries, but only to a point.

Winning, it turns out, is still the best elixir.

"I think that's a little bit overrated," he said. "I think it's important that he can drum up support and can put a good face on the program and those kinds of things. But he better be able to recruit and coach. Because if he can't do that, it doesn't matter how good he is at the other things."

Increasingly, though, coaches are relied on to help raise funds and deal with a growing and changing media landscape in addition to running their programs. Quite often, football coaches are the most visible people at a university, even an entire state.

And with revenues at an all-time high, the financial stakes have never been higher.

"There are a vast number of responsibilities that come with this world today," Hamilton said. "Fifteen years ago, coaches didn't have a BlackBerry and a cell phone with them. They weren't text messaging. Particularly in our league, you've got to manage the public relations machine, the media machine making sure that you're accessible to fans."

The Fan's Role

So where does the money come from?

At Tennessee, as with other SEC schools, the answer is largely from fans, alumni and donors.

Universities sign the checks, but fans ultimately pay those salaries through donations. Or tickets. Or that favorite shirt they wear to the game, which cost a company licensing rights to produce. Even if they're watching it from the couch, those eyes and ears help drive up the amount networks are willing to pay for the right to air those games.

And while some might grumble or grouse about prices increasing for a Saturday afternoon's worth of football, they're still turning up in droves.

"My sense is that Joe Fan is not particularly annoyed by coaches getting big salaries," Hinchey said. "They are annoyed if the coach getting the big salary doesn't get a sufficient number of Ws. But if that highly paid coach can win, they're pleased as punch."

And, pleased as punch or not, they continue to pay.

While that's been the case at Tennessee, Hamilton still wants the core fan to be able to remain a part of the program.

"There are a tremendous amount of dollars being spent on sports in society," he said. "I think one of the things we always have to concern ourselves with is that these are discretionary dollars and people are making choices. I worry about that every day.

"We live in a free market economy in the United States," he said. "Americans have said they're willing to pay for certain things. At this point, one of the things they've been paying for is the opportunity to be a part of successful athletic entities, both professional and intercollegiate. The competition to have the right guy, quote unquote, has been significant as departments try to draw revenue to meet fan expectations."

Should the price ever get too high, Hinchey says, the market will quickly correct itself.

"The fan can always vote with their dollars," Hinchey said. "And when they do vote with their dollars, that sends a message to the property in very short order that they need to adjust their policy."

So far, at least, fans are voting yes.

Unfair Advantage

Growing revenue provides a strong case against those Chicken Littles who see rising coaching salaries as the fifth horseman of the Apocalypse.

The flip side of the argument is that staggering amounts of money are devoted to athletics at universities where faculty members sometime go without raises and tuition always seems to rise.

But, in the strictest sense, market value defines coaching salaries.

"People always want to use the issue of, 'Well the professor in economics doesn't make what the football coach does,' " says Sexton. "Well, there's not as much demand for the professor in economics as there is for a football coach. A professor in economics is a gifted, valuable part of what goes on at an educational institution, so I don't mean that to sound derogatory. But it's supply and demand.

"It's what people are willing to pay to watch these games, to see these players. And it's a big business."

So the equation for rising salaries looks something like this: Passionate fan base plus championship expectations plus growing revenue equal big money for a proven coach.

Not every school has pockets as deep as Alabama or LSU, which are scheduled to spend nearly $8 million combined on their head coaches alone this season.

Could that lead to a situation that often occurs in pro sports where teams that spend less money have a more difficult time remaining competitive?

"There are haves and have nots," says Parker. "However, I don't think there's any SEC school that has not demonstrated the ability to hire a quality, high-profile coach to be the leader of their school. I can't name a single one."

'Tea Leaves'

So what does the future hold?

As long as fans continue to pay hundreds or thousands of dollars for season tickets and even more in donations for the rights to purchase those tickets, as long as corporations pay to be associated with winning programs and television networks keeping shelling out millions to televise games, the answer is bigger budgets and bigger salaries.

And as long as passionate fans, donors and universities demand success, elite coaches and those who show the promise of one day becoming elite coaches will continue to command higher salaries.

"I don't see it changing a whole lot, other than it will continue to increase at some level," Sexton said. "It's very hard to hire a football coach - very hard - away from another school. I think that's one of the reasons schools pay to keep them. I think as long as there's other suitors out there that are trying to hire your coach away from you, it's going to put you in a situation where you have to respond to the marketplace."

Hamilton sees salary increases in the future, too.

"If the question is, 10 years from now will salaries be greater than they are today? Absolutely. What's the percentage? I don't know," he said. "It's hard to get the tea leaves out and figure that one out."

While higher incentives and longer-term contracts are likely to become more commonplace as schools combat the growing price tag for coaches, guaranteed money doesn't figure to decrease.

Nor does it figure to go anywhere but up.

"So far, nobody's proven that they're willing to draw a line," Parker says. "I don't blame the coaches. I don't think we're near the top. I think we're going to see the contracts rise."

Drew Edwards covers University of Tennessee football. He may be reached at 865-342-6274.

Price tag for SEC football coaches surges

Dean of SEC coaches sees salary rise 583 percent since 1993