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Nick Saban: The First $10 Million Coach? (Now $7.5 Million Man)

EconMatters's picture




 

Free Market at work: Two Competing Offers on Table

 

The rumor has it that Nick Saban has two offers on his desk, and he is contemplating his future, sign the contract extension offered by Alabama in reply to the supposed offer on Saban`s desk to coach the Texas Longhorns as Mack Brown is being shown the door. Mack Brown will probably be reassigned to ambassador of the program status for public relations type activities – at a hefty salary of course.

 

Reports are all over the place on this story but supposedly Texas which is the highest grossing revenue producing sports program in the country, worth more than many NFL teams, has offered in the range of $10 million a year for Saban to jump ship to Austin, Texas. There is even talk of offering him a percentage of the Longhorn Sports Network, a deal with ESPN.

 

 

Texas Would Reap a Bargain at $10 Million for Saban

 

Saban has jumped ship before, and make no mistake his track record is best in class, and even at $10 million a year, he would be a net revenue generator for the University of Texas – just look what he has done for the Alabama Football program before he got there, and his tenure at the helm. Yes Saban is just that good at what he does. This is why Alabama is worried and has feverishly put together a lucrative contract extension for Saban.

 

Good for Collegiate Athletics?

 

The interesting fallout for all this from a business and market perspective is the following: Basically there were a lot of very good college football coaches in the 2 million dollar range, and Mack Brown and Nick Saban were way up there in the $5.5 Million stratosphere which has started bringing some other coaches paychecks up to near this $5 Million threshold as well. However, this is rarified air for collegiate athletic programs, who have to sell these large salaries to the University Administration, which can be quite a task given the internal politics of Universities – especially from the academic contingent.

 

Further Reading: Invest in the Gold Market 2014 


Academia Up in Arms

 

The real fallout will be if Saban all the sudden re-sets the pay scale bar with a $10 million a year salary, this cannot sit too well with the newly tenured PhD Professor who is making $50-60k a year starting out. Sure many professors earn above $100k, but usually after multiple seniority raises, and yes the cream of the crop at Universities can make in the millions with Books Deals, Speaking fees, and Rock Star salaries – but most of academia are not in this category. Not to mention the other issue of rising tuition costs for students the last two decades. 

 

Accordingly the resentment within the University System could be quite loud if football coaches start bringing home $10 Million a year at what are supposed to be academic first institutions – some will say things have gone too far with respect to collegiate athletics, and that this is becoming a professional level, marketplace salary and contrary to the supposed amateur athlete notions put forward by the NCAA.  

 

Players Finally Get Paid Officially?

 

This could open up some serious discussion about whether the players should get paid if collegiate sports are going to generate this kind of revenue, and necessitates that college coaches get paid more than NFL coaches. The highest paid NFL coaches make in the 8 million dollar range.

 

After all, the 4 and 5-star recruits are what helps these coaches and programs win at the highest rate (Alabama has routinely ran away with number one recruiting classes under Nick Saban), and reap the rewards of these huge paydays. Without the players, none of this is possible!

 

The Best Athletes are already Getting Paid - Under the Table

 

I am sure we will know by Monday what Nick Saban has decided to do, but whatever decision he makes – one thing seems clear collegiate athletics has taken the next final step into professional athletics, and market forces will eventually force the NCAA to adjust to paying players officially at the Division 1 level. 

 

Sure building state of the art facilities is nice for players, but market forces seem to be too big at this point to keep hidden under the table for very much longer with regards to improper benefits. Let`s call a spade a spade, collegiate sports is big-time business in this country, and these are professional athletes playing on Saturdays!

 

Article Update

 

At the time of publishing this article Nick Saban had yet to make his decision. Friday night news broke that Nick Saban has decided to stay at Alabama incentivized by his second contract extension in less than a year (his extension in March raised his salary to  $5.62 million) reports are that the new extension pays Saban more than $7 million. Some reports put the number at $7.5 million. Obviously the press release downplays the money angle saying how they want to continue to build on the tremendous success that they have enjoyed to this point both in the community and on the football field. It looks like Saban took less to stay at Alabama not wanting to start another rebuilding program at this stage in his career. All things considered it has been quite a nice year for Nick Saban with two salary raises in one calendar year without even winning the SEC. He can thank the University of Texas for this latest contract extension. It will be interesting to see what the Texas Longhorns next move is given the fact that Nick Saban has decided to stay put at Alabama.  

 

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Sun, 12/15/2013 - 01:06 | 4247718 sethstorm
sethstorm's picture

If you want to do something good for NCAA Football:

Put all the members of the SEC on a 25 year death penalty and revoke their wins from the BCS.  If they're really that good, they'll be more than happy to accept scrimmaging for a while.

Sat, 12/14/2013 - 15:22 | 4246766 deerhunter
deerhunter's picture

Deo Vindice,  It appears the Federal govt has ordered a cross to come down from a veterans memorial to maybe be dragged into the colesium for the festivities to begin.  Open war against Christians and all that is good going on in this land.  That whole salt and light thing spoken of in the Good Book not so much going on on either coast in our country at least.  No need to offer suggestions about the games and lions and Christians.  We may see it in our lifetimes here.  

Sat, 12/14/2013 - 15:20 | 4246764 Catullus
Catullus's picture

The bigger story in college football will be next year when they adopt this beyond moronic playoff system. Of course, the Disney franchise of sports networks and columnists kept telling us for 15 years how silly the BCS is. most people missed that ESPN is a broadcasting network. They wanted to consolidate the bowl system so that could concentrate the biggest bowl games on their networks. But they ended up creating a two tier bowl system. Now ESPN holds all the cards. They can low ball the bowl system going forward (maybe within reason of that Fox Sports 1 network). College football will have the end around pulled on them.

So the other instructive thing is that they took a private, decentralized exhibition bowl system. The national champion was recognized by different polls. Then they had the BCS, and the writers and newspaper run computer polls determined the rankings. They slowly began diluting the poll by giving more weight to the polls. Then they replaced the AP with the Harris poll, which is small group of football insiders (the other being the athletic departments voting themselves or conference cronies). Now they're going to have just a group of 13 (one of which is the beyond incompetent Condeleezea Rice) decide behind closed doors 4 teams. The controversy used to be "who's #2 vs #3?". Now it will be the 4 teams selected AND the rankings, meaning who has to play whom in the bowls. "Why does 1 have to play 4 when 3 is obviously worse?"

In the economic sense, this is actually what Kenneth Arrow wrote on the impossibility of a social welfare function. You're never going to get more than 2 people to agree with the rank ordering.

Sun, 12/15/2013 - 01:08 | 4247722 sethstorm
sethstorm's picture

As long as the SEC gets the short end of the stick, fine.  That'd be returning things to normal.

Sat, 12/14/2013 - 14:27 | 4246663 Old_Dog
Old_Dog's picture

When professors can get 100,000 people to pay to attend a 3 hour practical lab then they can complain about their salaries being too low.

Sun, 12/15/2013 - 03:12 | 4247846 frankTHE COIN
frankTHE COIN's picture

I agree.
The football depts of Alabama, Texas, Ohio St., and LSU all generate over $ 100 million dollars a year and net, on avg $ 65 million.

Sat, 12/14/2013 - 15:00 | 4246581 Gringo Viejo
Gringo Viejo's picture

As the great unwashed continue to beat, stab and shoot one another over the
intellectual premise of who can throw a ball further or bounce one better.....I gather weapons, ammo, water and food. I'm good with that.

Sat, 12/14/2013 - 13:31 | 4246551 Deo vindice
Deo vindice's picture

If ever there was a story that revealed the skewed values of a society, this is it.

The empire is spending too much time and money at the coliseums.

How long until they have to bring the lions and Christians into the arena to keep the crowds entertained?

Sat, 12/14/2013 - 13:13 | 4246509 Dull Care
Dull Care's picture

Nick Saban and the University of Alabama can go fuck themselves.

Sat, 12/14/2013 - 12:20 | 4246432 JamesBond
JamesBond's picture

War Eagle Bitchez

Sat, 12/14/2013 - 14:45 | 4246691 I am a Man I am...
I am a Man I am Forty's picture

Right!  War Eagle!!!  Was at the iron bow, best college game ever!!

Oh, and Johnny Manziel was only a 3 star recruit.  Goes to show ya nobody knows shit.

Sat, 12/14/2013 - 14:13 | 4246628 SafelyGraze
SafelyGraze's picture

I demand that at least 30% of that salary be diverted to me and my organization so that we can "secure" some oil'n'gas n stuff for BP.

hugs,
jackloo 

also, we need that money so we can qualify for a lower interest rate when we borrow

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