Thursday, March 25, 2010

Salary Update



This posting was authored by Tony Weaver, Assistant Professor of Leisure and Sport Management at Elon University. Tony has agreed to occasionally provide research summaries. Prior to teaching at Elon, Dr. Weaver was an athletic administrator at Iona College, Siena College and the University of North Carolina at Greensboro.



With coaching changes happening at a rapid pace, it is time to give some financial updates from the previous post, the Salary Dilemma. A majority of schools below have decided to hire new coaches at a higher salary than their predecessor. Other schools are still in the process of hiring, yet have made it known that they will be putting more resources into the basketball program, including higher coaching salaries.

Two questions arise when examining these situations:

First, does coaching turnover really make a difference? Many have questioned whether some of these current schools can ever win due to other factors such as recruiting budgets, facilities, and the competition in their league. Using two examples from below, DePaul in the Big East and Fordham in the Atlantic 10, suggests the problems may run deeper than solely the coach. Since joining the Big East in 2005-2006, DePaul has an overall record of 60-155, and a conference record of 23-84. Fordham left the Patriot League in 1995 to join the Atlantic 10 and has also struggled. Since 1995, Fordham’s overall record is 132-266, and the A-10 record is 63-161. They have gone through three coaches since the 1995 season (Nick Macarchuk, Bob Hill, and Derek Whittenburg) and only have two winning seasons in the Atlantic 10 (2005-06, 2006-07).

Second, does a new coach deserve a higher salary than his predecessor? It appears to be a given. The quick answer is that market demand drives the salary higher, but more longitudinal research needs to examine if increasing the new coach’s salary actually helps build a better program.

Fulks (2009) indicates in the 2004-08 NCAA Revenues and Expenses of Division I intercollegiate athletics program report (free download) that one of the largest expenses at the Division I level is salaries and benefits. At the BCS level, salaries and benefits make up 33% of total expenses; at the FCS level, salaries and benefits make up 31% of total expenses; and in the Non-football level, salaries and benefits make up 32% of total expenses. Of course, this line item includes all athletic department salaries and benefits, and certainly athletic departments employ many people which would lead to a large line item. However, at a majority of the institutions the highest paid athletic department employees are coaches. Perhaps administrators could reconsider the amount of money and the length of contracts given to new coaches and spend more efficiently on other areas that could address underlying issues. One could argue that until other departmental areas are addressed, any coach would have a difficult time winning, regardless of their salary.


Mid-Season Firing, New Hire:

At UNC Wilmington, former head coach Benny Moss was fired during the year after a disappointing start to the year. His contract runs through 2012-2013 at $170,000 annually. However, according to Brian Mull with the Wilmington Star News, UNCW is ready to hire a coach with head coaching experience and will pay between $225,000-$250,000 annually.

The Board of Trustees at Fordham University voted to increase the men’s basketball budget in February and then yesterday hired Tom Pecora for $705,000 annually. This salary would place him the top tier of the Atlantic 10 Conference men’s basketball coaches.

DePaul fired Jerry Wainwright in January and now promises to increase the salary for the next coach and possibly address the issue of a new arena. Although the school has not named a new coach, it appears athletic director Jean Lenti Ponsetto is interested in top level coaches.

Keeping their coach (for now):

Penn State and Rutgers decided to keep their men’s basketball coaches for the upcoming season despite poor seasons. Ed DeChellis of Penn State currently makes approximately $650,000/year and is under contract until 2013-2014; however, the Penn State faithful seem to be running out of patience. Fred Hill survived another year at Rutgers, perhaps putting off the inevitable. Tom Luicci of the Star Ledger details Hill’s contract, highlighting the financial hit Rutgers would take if the school fired Hill.

Quick fire, quick hire:

With three years remaining on his contract and a $1.5 million buyout, Jeff Lebo was fired from Auburn University. Lebo was quickly hired by East Carolina University and Auburn hired former UTEP head coach, Tony Barbee.

Holy Toledo:

Gene Cross resigned at Toledo and walked away from the remaining $700,000 on his contract. Before he resigned, Cross was the highest paid employee in the athletic department.

Keep an eye on:

Similar to their conference foe DePaul, it appears administrators at St. John’s and Seton Hall are also willing to pay good money for their next coach.

Iowa fired Todd Lickliter after only three seasons, because Gary Barta, the Iowa athletic director, “felt he couldn't afford to bring him back for a fourth”

Oregon did not renew the contract of Ernie Kent and now is in the midst of a national search.

A New Contract:

What is the value of beating Kansas and going to the Sweet 16? Northern Iowa and Ben Jacobson have agreed to a new 10-year deal that will increase Jacobson's annual salary to $450,000 starting next season, with annual raises of $25,000.

1 comment:

Rodney Fort said...

Hi Tony.

There are two parts to pay, getting better at what you do and customers willing to pay more for what you do (even if you don't get any better!).

I suspect that most of the increases you observe in your post are of the latter variety. And there is one complication...

Coaches also make part of what would otherwise be paid to players. Again, as long as fans are also willing to pay more for what players do, then a side benefit goes to coaches.

Thanks for keeping us up to date on the musical chairs of coaching.