College Coaching Salaries a Bubble?

[cymonw1980]

IS housing a bubble? Is the stock market a
Bubble? At times there appears to be a “pop”, but over history they have ALWAYS gone up. The bubble shrinks sometimes but does it ever really “pop”?

I don't think overall athletic budgets are a "bubble". I think coaching salaries might be...

1) Athletic Budgets have been climbing significantly over the past 15 years. Use ISU as an example... In 2005 ISU's Athletic Budget was $29M; in 2019 it is $95M (330% increase in 15 yrs). The key driver is media revenues which are up 450% in that same period. If media growth SLOWS (not saying it will pop, just slows) this will reduce the new revenues coming in...

2) Paying players FAIRLY would flip the script. Add a new expense to the athletic budget and start to fairly compensate players... you will see a huge shift in spend. College athletes are "paid" significantly less than professional athletes in terms of % of revenue. College players create significant value. Some get fairly compensated with the tuition payments they get, some are paid far too little. add competition to player compensation (pay them fairly) and you will see significant athletic dollars shift from coaches/facilities to athletes.

Not saying college athletics is a bubble. But coaching salaries? Maybe.

 

[Malty Flannel]

Pollard's thoughts on this on Murph and Andy were interesting. He suggested the NCAA try to get anti-trust status (something like that?) which would give the schools legal ability to hold coaches to fulfilling their full contracts, rather than having their agent shop around every year for a higher bidder.

 

[cymonw1980]

I don’t believe it’s a bubble. As long as coaches under contract can be poached from other schools without penalty besides the buyout.
College Sports needs a rule in place when hiring head coaches away from schools under contract. Like a 1 year post season ban if hiring a head coach under contract.
The NFL doesn’t have this problem because of rules in place. Teams usually aren’t willing to pay the draft compensation to take another team’s coach.

Fair point on lack of competition for coaches in the NFL...

But what if players have the same ability in college as college coaches do?

1) Players start to be paid by schools directly
2) Players can transfer at anytime (already allowed one free transfer)

Soon you will need to pay to hold onto your starting QB, etc. every off season, not just your coach.

Again, this is contingent on paying players. I believe it 1) should happen, 2) will happen (based on SCOTUS ruling). Once there is completion for the dollars, it's not just about paying a coach it's about paying the players.

That is when players will be paid "fairly". How much are they worth? 13% of athletic budgets? I think it will be significantly more and the bubble in facilities and coaching salaries will be where the money comes from.

 

[cymonw1980]

One of the things that is contributing the the wildness of this coaching cycle, and inflating coaching salaries is the adoption of the Early Signing Period.

The Early Signing Period was adopted in 2017, allowing high school student-athletes to sign their NLI in mid-December instead of waiting for the traditional Signing Day of the first Wednesday in February. This means that any school that opts fire their coach (or loses their coach) at the end of the season has about 2-3 week to hire a new guy. That head coach then has to rush to assemble a staff, and throw together a recruiting class in about 15 days.

This compressed window for negotiating is giving coaches more leverage to negotiate higher salaries, while also leading to a lot of attrition from the first signing class for a coach at new school. This article from Bud Elliot discusses this issue further.

I feel like its time to either abolish the early signing period, or move it even earlier in the year, like September.

I like the idea of moving it earlier (like Sep) actually. But letting the player walk away if the coach is fired/leaves. However, they cannot sign elsewhere until the 2nd signing window maybe in mid january...

 

[davegilbertson]

Room and board is included in the 13% of athletic budgets that go to students today... What I am saying is that needs to be increased, significantly for athletes driving the revenue. You can't pay a HC $10M per year and give a star RB, QB, etc. $50k - $100k in total value per year and say we're even.

Matt LaFluer makes $5M per year
Aaron Rodgers makes $25M+

Again, I am not saying it is all the same... you want to move the numbers a bit, that is fine. But you can't have star players making next to nothing (relatively speaking) and pay coaches the money they are making...

fair point. I think there's still some reality to college being a developmental league. better to compare G league with college than NBA or NFL IMO. Apprentices don't get paid the rate of a journeyman or master etc.

I'm actually curious what that end sup looking like. Not going to go digging though.

 

[madguy30]

Yes, it's a bubble. How much longer it continues is hard to predict. We might be on the front end of a bubble, but .

Attendance and viewership in general has been declining. The lazy take is that the bigger salaries suggest it's in this massive growth phase when it is not. As you share, the salaries are more to years of a media dollar boom, with facilities largely built out and nowhere else to go with the money.

I've said this probably too many times, but due to NIL and consolidation of big brands, I do think CFB is on it's way to a financial crash in the next 10-20 years. Product differentiation from the NFL keeps eroding, and that's going to hurt fandom over time.

I just see every macro, long-term force going against growth of CFB in popularity. it will take time for the finances to fully come to roost, particularly at the big schools, but ultimately it's going to happen I think.

Are more kids not playing football too due to safety concerns?

 

[AuH2O]

Are more kids not playing football too due to safety concerns?

Yes, that's most of it, but I think there's also other factors like interest in other sports/activities.

Around 10 years ago my brother in law coached a MS program in Des Moines. After about 5 years or so the number of players was like 1/4 of what it was before. I believe these were 6th or 7th grade kids. It's been a while, this was maybe between 2008 - 2013 or so. Maybe it's bounced back, but it really plummeted during that time he said.

I can say though that my son in Ames in 8th grade they had a big turn out this year, maybe 45 kids, when prior years I think they might have 30ish and some of DM suburb schools looked like they had 70-80 kids.

 

[madguy30]

Yes, that's most of it, but I think there's also other factors like interest in other sports/activities.

Around 10 years ago my brother in law coached a MS program in Des Moines. After about 5 years or so the number of players was like 1/4 of what it was before. I believe these were 6th or 7th grade kids. It's been a while, this was maybe between 2008 - 2013 or so. Maybe it's bounced back, but it really plummeted during that time he said.

I can say though that my son in Ames in 8th grade they had a big turn out this year, maybe 45 kids, when prior years I think they might have 30ish and some of DM suburb schools looked like they had 70-80 kids.

Yeah may have been a dip for a while but renewed interest after safety protocols changed.

I'd have to research a bit more and I'm sure it varies.

 

[cymonw1980]

I thought the NFL collective bargaining agreement stipulated that players get 48% of the revenue.

Looked it up... You are right! It is 48% of revenue... so, even more should go to the students. Right now they are only getting 10%-13% or so based on tuition, room & board, etc.

I calculated the 38% using the current salary cap of 182M/team and comparing to 2019 Rev of 15B. However, current salary cap (182M x32 teams) is 48% of the 2020 Revenue (12B). So, yes... NFL players get about 48% of the revenue, Coaches get about 1.3% of hte revenue.

In College, head football coaches get 4% - 5% of the revenue, all student athletes combined (not just football) get 10%-13% of the revenue.

 

[FriendlySpartan]

Personally I don’t think the salaries are a bubble and in fact I expect salaries to rise dramatically once the new media deals are coming out. Also the OSU/Mich game just drew over 15mil viewers who all had to watch that live commercials and all. That is extremely valuable for networks and their marketing depts.

 

[MNCYWX]

All I know is... all the schools crying during COVID saying this will bankrupt our athletics department were speaking out their rear ends.

Coaching salaries right now are going absolutely bonkers.

 

[JUKEBOX]

does the nfl still have a requirement that a player needs to be in college a certain amount of time?

why can't players just go to the nfl at an earlier age?

 

[FriendlySpartan]

does the nfl still have a requirement that a player needs to be in college a certain amount of time?

why can't players just go to the nfl at an earlier age?

Yep 3 years. Main reason is to protect the NFL. Don't want to be drafting kids out of HS without getting to see them play against top competition. It works in the NBA sometimes but would be tough to do in the NFL. Its part of the reason why NIL exists now

 

[ISUcyclones11]

Yep 3 years. Main reason is to protect the NFL. Don't want to be drafting kids out of HS without getting to see them play against top competition. It works in the NBA sometimes but would be tough to do in the NFL. Its part of the reason why NIL exists now

Not that it matters much but technically it's 3 years out of high school. It's why NBA prospects are playing in China/G League now

 

[JUKEBOX]

Yep 3 years. Main reason is to protect the NFL. Don't want to be drafting kids out of HS without getting to see them play against top competition. It works in the NBA sometimes but would be tough to do in the NFL. Its part of the reason why NIL exists now

lame

I wish there was a way for prospects to have an opportunity to be drafted into the pros like pretty much every other sport out of high school

probably would help even the playing field a little more too in college sports

 

[StPaulCyclone]

lame

I wish there was a way for prospects to have an opportunity to be drafted into the pros like pretty much every other sport out of high school

probably would help even the playing field a little more too in college sports

They are not physically developed enough, that’s always been the concern.

 

[cymonw1980]

Personally I don’t think the salaries are a bubble and in fact I expect salaries to rise dramatically once the new media deals are coming out. Also the OSU/Mich game just drew over 15mil viewers who all had to watch that live commercials and all. That is extremely valuable for networks and their marketing depts.

you may be right. To be clear, I don’t care how much coaches are paid as long as the revenue from athletics is shared with athletes.

As stated by the SCOTUS, it is hard to justify the current revenue distribution. The current compensation for athletes is unfair. Important to have competitive bidding for players.

this is not about NIL. This is the billions of dollars that athletic conferences currently bring in.

if compensation is shared with players I would expect revenue to shift away from facilities/coaches and toward athletes. That is what I think needs to happen. You want to pay a coach for your football program $10M? Great! But you better be paying you players 100M if that’s the case.

NFL players make 30x what the head coach makes. College players are worth at least 10x.

 

[JUKEBOX]

They are not physically developed enough, that’s always been the concern.

yeah wish they could get drafted and then the nfl team could put them on a strength program or affiliate in a developmental league

disappointed that the aaf died

I actually thought that league was put together pretty well