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Big buyouts for college coaches are the norm. If athletes start getting revenue, that could change

by Sophia Chen
4 comments
College Athletics

The prevailing trend in college sports is the substantial compensation given to coaches, but this could undergo a transformation if athletes begin to receive a share of the revenue generated.

According to sports economist Andrew Zimbalist, the world of college athletics is distinct from typical business models, as it is driven by stakeholders and focuses on victories rather than profits. This unique approach is exemplified by Texas A&M’s decision to pay Jimbo Fischer more than $75 million not to coach its football team, a scenario mirrored by coaches at other top programs who also have substantial severance packages built into their contracts.

Zimbalist and other experts suggest that these lucrative coaching contracts and golden parachutes will persist until the business model evolves to allocate a more significant portion of the revenue to the athletes themselves. The idea is that if, in the future, athletes are recognized as employees, it could lead to a reduction in the generous benefits and severance payments coaches currently enjoy. However, until that transformation occurs, athletic programs may continue to incur substantial losses.

Recently, Jimbo Fisher was fired just over two years into his fully guaranteed 10-year, $95 million contract. Texas A&M plans to use donor funds for an initial payment of over $75 million owed to Fisher, with the rest to be covered by athletic department revenue through an installment plan.

Currently, there are six active coaches with buyout clauses exceeding $50 million if they are terminated without cause. Leading the pack are Georgia’s Kirby Smart ($92.5 million), LSU’s Brian Kelly ($70 million), and Penn State’s James Franklin ($64.5 million).

The length of a coach’s contract directly impacts the buyout amount, often extending up to 10 years, contributing to the eye-catching figures.

While such buyout clauses provide security for coaches, they also make it challenging for institutions to make decisions about leadership transitions. The emotional attachment to long-term coaching staff is understandable, but it can place universities in precarious situations.

The potential for change in this landscape lies in ongoing court cases and administrative decisions. If athletes prevail in legal proceedings and are classified as employees rather than “student-athletes,” it could deflate the buyout balloon.

Two key cases, House vs. the NCAA and Johnson vs. the NCAA, seek back pay for thousands of athletes dating back to 2016 and push for employee status with associated pay and benefits. A ruling in favor of these athletes would likely shift the dynamics of contract negotiations.

Richard Southall, director of the College Sport Research Institute at the University of South Carolina, emphasizes that as long as athletes are largely unpaid and schools can generate revenue from media rights, tickets, and sponsorships, coaches and their agents will have a significant advantage in contract talks. This stands in contrast to the NFL, where owners prioritize player compensation.

Zimbalist and Southall contend that university leaders often defer to athletic directors in matters related to the athletic department, leading to financial decisions that may not prioritize fiscal prudence. University presidents may find it challenging to challenge the status quo, ultimately allowing coaches and their agents to dictate terms.

In summary, the landscape of college sports, particularly coaching contracts and buyouts, may undergo transformation if athletes gain employee status and a share of the revenue. However, until such changes occur, the prevailing system of substantial coaching compensation and job security is likely to persist.

Frequently Asked Questions (FAQs) about College Athletics

What is the main focus of this text?

This text primarily discusses the impact of athlete compensation on college sports coaching contracts and the potential for change in the future.

Why are college coaches receiving such large contracts and severance packages?

College coaches receive substantial contracts and severance packages due to the unique business model of college athletics, where the emphasis is on victories rather than profits. This approach has led to substantial investments in coaching staff.

What recent example is provided to illustrate the issue?

The text mentions Jimbo Fisher’s situation, where he was paid over $75 million not to coach Texas A&M’s football team, despite being just two years into his 10-year, $95 million contract.

How do the lengths of coaching contracts affect buyout amounts?

The length of coaching contracts directly impacts buyout amounts, with some coaches having contracts extending up to 10 years, which contributes to the high buyout figures mentioned in the text.

What could potentially bring about a change in the current coaching contract landscape?

A potential shift in the landscape could occur if athletes are classified as employees rather than “student-athletes,” as argued in ongoing court cases. This change could impact coaching contract negotiations.

How does the NFL differ from college sports in terms of coaching contracts?

The NFL prioritizes player compensation, while in college sports, coaches and their agents often hold the advantage in contract negotiations, according to experts cited in the text.

What challenges do university presidents face in addressing coaching contracts?

University presidents often defer to athletic directors in matters related to athletic departments, potentially leading to financial decisions that may not prioritize fiscal prudence, as mentioned in the text.

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4 comments

johnsmith123 November 18, 2023 - 1:56 pm

wow, them college coaches makin’ bank, athletes not so much tho, need changes, y’know?

Reply
SportsFan99 November 18, 2023 - 11:58 pm

big contracts, huge buyouts, crazy stuff, but what ’bout them players? unfair!

Reply
EconGeek22 November 19, 2023 - 4:35 am

this article say college sports diff than NFL, coaches rulin’, athletes sufferin’, time 4 change?

Reply
TypoQueen November 19, 2023 - 6:19 am

lotsa big words, no smilies, serious biz talk, gotta keep it formal, ya feel me?

Reply

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