College athletics are most definitely changing. For more than a century, the NCAA has maintained absolute control over the athletes’ labor market and restricted their pay to only a scholarship. But it appears that soon athletes will be paid a share of the revenue that college sports generate. This means that the expense report of each athletic department around the nation will soon include a new entry: Wages Expense—Athletes
So, where will the money come from to meet this expense?
It is important to emphasize right now that athletic departments do not currently have money to pay athletes a wage. Colleges and universities are non-profit organizations. This means, as the name obviously implies, there are no profits. Whatever money is brought into the organization is spent on the mission of the organization (or whatever the decision-makers decide is the mission). There is no entity like owners in professional sports to claim a profit, and therefore no profit technically exists.
So, when you hear someone say “college sports aren’t profitable,” you shouldn’t be surprised. Non-profits don’t have profits. Really, this shouldn’t be that hard to understand!
All of this means that right now there is no money to meet a new expense. Whatever money the schools have earned from college sports in the past has been spent. For wages to be paid to athletes, different spending choices will have to be made.
Many athletic directors have made it clear what different choices they would like to make. In a recent article by Chase Goodbread in USA Today, athletic directors indicated they would like to cut sports played by men and women that don’t currently generate the revenue we see in football and men’s college basketball. In other words, if football players or men’s basketball players need to be paid more, schools can find that money by cutting women’s sports or men’s Olympic sports that don’t involve bouncing a basketball.
Goodbread noted that athletic directors seemed less willing to focus on a more obvious solution:
Power Four athletic directors who’ve been outspoken about revenue sharing threatening the subsidy of non-revenue sports haven’t been so quick to discuss the money that could be saved by curbing the spiraling cost of coaches’ salaries…
Although athletic directors may not want to talk about it, it does seem rather obvious that if players are going to get paid more, it is the coaches who should be getting less.
Let’s talk about the pay of football coaches in the professional and college ranks. According to Front Office Sports, the average pay of the twenty highest paid NFL head coaches is $8.98 million. And the average pay of the twenty highest paid NCAA football head coaches (again, according to Front Office Sports) is $8.99 million.
This result should strike everyone as very odd. At least, it is odd if we think about how women are paid in sports. This summer Nefertiti Walker and I published a book on women’s sports called Slaying the Trolls. In this book we discuss the pay of Dawn Staley. In her career coaching women’s basketball, Staley has led the University of South Carolina to three national titles. She has also coached Team USA to both a world championship and an Olympic gold medal.
In 2022, South Carolina signed Staley to a new seven-year contract that will pay her on average $3.2 million per year. As we note in Slaying the Trolls, this amount matched what Frank Martin was paid by South Carolina to coach its men’s basketball team in 2020-21. Martin was fired in 2021 after ten years where he never came close to winning any titles anywhere. As Nef Walker and I note, Staley works very hard to be paid as well as a mediocre man!
Of course, we know why Staley’s pay doesn’t seem to reflect how much better she is at her job. The revenues in women’s college basketball simply don’t match the revenues in men’s college basketball. And since revenue dictates pay… well, there is nothing anyone can do.
Right?
Apparently in the world of football, this story is very, very wrong. Revenues for the NFL and college football are most definitely not the same. According to Forbes, the 32 teams in the NFL in 2023 averaged $581 million in revenue. The average revenue of the top 32 college football program, by contrast, as reported to the U.S. Department of Education, was only $100 million.
So, an average NFL team has more than five times the revenue of the average college football team. But the top head coaches get paid the same in both places. How is that possible? Why don’t the rules that people apply to women also apply to men coaching football?
The highest paid people employed by the NFL are the players. Dan Campbell might be an amazing coach for the Detroit Lions. But if Jared Goff (the team’s $53 million starting quarterback) were replaced by Nate Sudfeld (one of the team’s back-up quarterbacks), Campbell would not look like a great coach anymore. Consequently, the Lions are never going to make Campbell their highest paid employee.
It’s a different story in college football. Once again, the NCAA has historically restricted the labor market for players. It has been a different story, though, for the coaches. For a century people been okay with schools monopsonistically exploiting athletes. But coaches have always been treated like they were in a free labor market.
That free labor market, though, was impacted by the exploitation of the athletes. Because athletes weren’t getting cash, there was always a much bigger pile of cash for the coaches. And that meant there has been enough cash for colleges to pay their football coaches like they were NFL coaches. To be clear, the revenues in college never justified those huge paychecks for the coaches. So, the coaches didn’t really “earn” this money.
Yet that never mattered. As we note in Slaying the Trolls, when it comes to sports, men really love men. And in college sports, because the players couldn’t be paid cash, the football coaches have historically been shown a great deal of love by athletic directors (who tend to be men!).
But now it should be a different story. Now that players can be paid, a school like Clemson University should be making very different choices. In 2022 (the latest year we have data), Clemson reported football revenues of $74 million. The same school paid Dabo Swinney, its head football coach, $11.5 million. Going forward, Clemson shouldn’t be giving 16 percent of its revenue to one coach. This is because Clemson will soon discover that Swinney isn’t really that great of a coach if he doesn’t have the very best players. And like the NFL has learned, those “very best” players really are worth more to the school than the head coach.
One suspects that highly paid football coaches will object to this story. In fact, Mike Gundy recently asked his players to stop asking for more money now that fall practices have started. But despite Gundy’s objections, the players will keep asking for more money. And that money should eventually come from the coaches.
The revenues from college football simply don’t justify the salaries currently paid to the head football coaches. So, when it comes time to add that wage expense for players, athletic directors should start looking at the pay of their coaches. And if the coaches say they want to keep getting paid like they are NFL coaches, schools should tell them to actually go work for the NFL.