Other People's Money
It’s good to be a coach
USA Today published its latest summary of college football coaches’ compensation on Tuesday, which is why I’m feeling extremely poor this week. There are just so many commas and zeroes on that page.
As usual, the 2023 report includes two key sections: (1) the “Total Pay” column, which identifies how much the coaches are paid while they are doing a good job, and (2) the “School Buyout” column, which shows what they will be paid after they do a bad job and get fired.
The names at the top of the annual salary list are mostly those you’d expect: Saban, Swinney, Smart, Day, Tucker (oops), Kelly, Jimbo, Stoops, Heupel, Kiffin. Those guys all make at least $9 million a year; a total of 36 coaches now make at least $5 million a year.
The buyout figures are eye-watering. Eighteen coaches would receive payments of at least $30 million if they’re fired without cause, and six of them would be paid over $60 million. Georgia is paying Kirby Smart $10 million to coach in 2023 but would pay him $92 million if they cut him loose.1
I’m not a financial advisor or anything, but if someone offers you a job coaching a college football team I recommend that you take it.
New NIL guidelines
On Wednesday — the day after USA Today’s report was released — the NCAA announced that it would take immediate action to curtail the runaway compensation of football coaches.
Just kidding! They didn’t do that. No, instead the NCAA proposed new guidelines regulating the earning power of student-athletes.
Seriously, the NCAA announced its plan to string red tape around the players’ ability to earn “name, image and likeness” income the day after the coaches’ gigantic, unfettered earnings were made public. I’m sure there are some nice people in the NCAA’s public relations department and on their NIL rulemaking committee, but they clearly don’t talk to each other.
The NCAA’s proposed NIL “protections” are mostly a bunch of nosy requirements the IRS would be proud of. They want the players to report how much money they’re making, who is paying them and what kind of services they will be providing. The NCAA even has some ideas about what NIL contracts should look like.
Here we go again
If you’re suspicious about the NCAA’s motives and methods here, you’ve been paying attention. Just two years ago, the NCAA argued in front of the Supreme Court (in NCAA v. Alston) that it’s important that college athletes remain unpaid, because amateurism is an integral part of the sport.
In other words: College athletes are amateurs, and amateurs play for free, therefore college athletes should not be paid because then they wouldn’t be amateurs, now would they?
The NCAA lost this argument in a 9-0 shutout:
"Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate….The NCAA is not above the law."
And yet now the NCAA, just two years after being laughed out of the Supreme Court in the Alston case, has emerged from the woodwork to announce that once again, it is here to help.
It’s OK to not be OK
Despite the NCAA’s latest silliness, it’s OK to admit that this new NIL world makes you a little uneasy, even if you’re generally supportive of the players getting paid. Student-athletes used to be ruled ineligible for accepting sandwiches, but now they are allowed to sign multimillion endorsement deals. Players are cashing checks, switching schools and generally having a good time, and something about it doesn’t feel quite right.
But it’s important to recognize that your feelings have been shaped by the NCAA’s decades of dopey (and illegal) rules and enforcement actions that spun out of the amateurism fairy tale. Without even realizing it, we all just kind of bought into the NCAA’s logic. The kids get scholarships, room and board, isn’t that enough?
The point is that in America, as the Supreme Court noted, it’s the workers who decide what’s “enough.” If somebody wants to pay you to perform a service, it’s generally nobody else’s business.
Back in the days when we watched our teams play only a couple times a year on our Zenith console TVs, maybe a college scholarship was “enough.” But those days are gone forever. College football is a billion dollar business; free calculus instruction is no longer reasonable player compensation.
There’s plenty for everyone
There is more than enough college football money to go around. Everything is expanding — the stadiums, the postseason playoff, the coaches’ wallets.
We shouldn’t begrudge the coaches for making their money. The buyout figures are a little hard to understand, but many of the names on that USA Today list are arguably underpaid considering the money and attention they bring to their schools. Nick Saban’s Football Progrum brought $130 million to the University of Alabama in 2022. He earned that $11 million salary.
But let’s not shrug our shoulders in response to the coaches’ skyrocketing compensation yet wring our hands over the student-athletes making theirs. When third parties want to throw dollars at the players who put on the show for us on Saturdays, we should embrace it, not view it as a nuisance that needs to be studied and controlled.
Change may be necessary (but don’t tell the NCAA)
As with any major change that involves big money, the NIL era will likely have some unintended consequences. The universities and state legislatures may be helpful in developing common sense rules around NIL; if they come up with ideas for protecting the sport without penalizing student-athletes, let’s try them out. Lawyers and recruits will keep them in check.
But the last thing we need is for the NCAA to get involved in this problem-solving exercise.
The NCAA fundamentally believes that problems with college sports can be solved by just putting more burdens on the players. Remember, this is an organization that punishes coaches for recruiting violations by taking away scholarships. Coach, as your penalty for doing a very bad thing, we have decided that five high school athletes will not be able to attend college for free. I hope you’ve learned a valuable lesson.
The NIL train left the station in June of 2021, and the NCAA missed it. It’s time for the NCAA to stay on the sideline while the grownups figure things out.
Structuring economic incentives does not appear to be Georgia’s strong suit.