Chapter Nine of Sports Economics begins with a story many may know (or not!). The highest paid public employee in most states is either a head coach in college football or college basketball. When we looked at revenue in Chapter Nine of the book, though, the amount paid seemed somewhat odd. For example, Pete Carroll was paid $7 million by the Seattle Seahawks of the NFL in 2015; a team that had $377 million in revenue. That same year Nick Saban was paid $7.1 million by the University of Alabama. But the football program at the University of Alabama only reported $97 million in revenue.
While many of us think about the men's NCAA basketball tournament we should remember a similar revenue-salary story can be told in basketball. USA Today recently reported the salaries of the head coaches in men's college basketball. According to this report, Mike Krzyzewski of Duke University, John Calipari of Kentucky, and Chris Holtmann of Ohio State are all paid more than $7 million per year. HoopsHype, though, says only three NBA head coaches -- Gregg Popovich, Doc Rivers, and Tom Thibodeau -- are paid this well. But just like college and professional football, if we look at the revenues of men's college basketball and the NBA it is hard to understand why coaches in both levels of competition would be paid similar wages.
Well, it isn't that hard to understand.
NBA teams pay their players 50% of their revenue. The NCAA, though, significantly restricts payments to college athletes. Therefore the money in generated in college basketball has to go someplace else. One "someplace else" is in the paychecks of the head coaches.
Let's imagine a world, though, where college coaches were paid like the NBA. According to Forbes.com, the average NBA team generated $245.6 million in revenue in 2016-17 while HoopsHype says the average head coach is paid $5.9 million per year. So the NBA pays on average 2.4% of its revenue to its head coach. What if men's college head coaches were paid in the same fashion?
Universities report the revenue of each athletic team to the U.S. Department of Education. The last year the data is reported is from 2016. If we assume those revenue numbers haven't changed too much (which may not be a great assumption!), then we can use these 2016 revenue numbers to calculate what each head coach in men's basketball would be paid if their pay was restricted to 2.4% of team revenue.
For example, Duke University reported $34.3 million in revenue for men's basketball in 2016. If Coach Krzyzewski was paid 2.4% of team revenue his pay would be $823,498; or more than $8 million less than he is actually paid today.
Once again, USA Today reports what college men's basketball coaches are actually being paid by their schools. And here is what the thirty highest paid college coaches would be paid if they were paid like NBA head coaches:
- Mike Krzyzewski (Duke University): $823,498
- John Calipari (Kentucky University): $669,490
- Chris Holtmann (Ohio State University): $436,908
- Bill Self (Kansas University): $437,297
- Tom Izzo (Michigan State University): $420,115
- Sean Miller (Arizona University): $561,032
- Bob Huggins (West Virginia University): $163,895
- Larry Krystkowiak (University of Utah): $209,582
- John Beilein (University of Michigan): $404,903
- Archie Miller (Indiana University): $587,989
- Shaka Smart (University of Texas): $420,578
- Lon Kruger (University of Oklahoma): $315,788
- Gregg Marshall (Wichita State): $177,784
- Tony Bennett (University of Virginia): $204,811
- Avery Johnson (University of Alabama): $359,189
- Scott Drew (Baylor University): $217,789
- Frank Martin (University of South Carolina): $286,055
- Brad Underwood (University of Illinois): $378,902
- Buzz Williams (Virginia Tech): $225,720
- Mark Turgeon (University of Maryland): $424,729
- Dana Altman (University of Oregon): $266,927
- Cuonzo Martin (University of Missouri): $240,974
- Steve Alford (UCLA): $321,201
- Jay Wright (Villanova): $266,223
- Mike Anderson (University of Arkansas): $391,011
- Michael White (University of Florida): $339,960
- Bruce Pearl (Auburn University): $237,022
- Will Wade (LSU): $194,770
- Matt Painter (Purdue University): $243,510
- Mike Brey (Notre Dame): $93,289
A few notes on this list. First, the average salary for this group is $3.5 million and this average pay works out to 27.1% of average reported revenues. If these coaches were paid like the NBA, though, the average pay of these coaches would only be $344,031. So if these coaches were paid like NBA coaches then on average each would see a pay cut of about $3 million (similar to what I said about Sean Miller at the University of Arizona earlier this month).
In addition, none of these head coaches would be paid as much as a million dollars per year. And Mike Brey's pay wouldn't be much different than a professor at Notre Dame. Brey's school only reported $3.9 million in revenue in 2016 from their men's basketball team and his currently salary is 61% of this total. But if NCAA paid like the NBA, Brey would receive less than $100,000 per year.
To the best of my knowledge, no college coach has come forward to advocate that the NCAA pay players and coaches as they are in the NBA. And given these numbers, there isn't much incentive for any coach to advocate such a change. But it is interesting to see what a less restricted market would look like. The picture painted suggests that many NCAA coaches are not going to want to live in a world where NCAA athletes are better compensated for their efforts and coaches… well, they get much, much less.