Some, not all, coaches share colleges’ burden amid coronavirus pandemic

Some, not all, coaches share colleges’ burden amid coronavirus pandemic

Budget & Tax, In The News,  | Quick Take
Jul 17, 2020  | 28 min read | Print Article

This article by Kyle Bonagura, Steve Fainaru, Mark Fainaru-Wada, Michael Fletcher, Maya Jones, Paula Lavigne, Tonya Malinowski, John Mastroberardino, Dan Murphy, Mark Schlabach, Tisha Thompson and Tracy Wholf. first appeared in ESPN on July 17, 2020

NEARLY HALF OF major college football and men’s basketball coaches have taken voluntary pay cuts in response to the financial crisis facing higher education because of the coronavirus pandemic, but most of the highest-paid coaches have not, an ESPN survey found.

Eight of the 10 top-paid football coaches and at least five of the 10 highest-paid men’s basketball coaches — all of whom earn more money than anyone else at their schools — have not taken cuts.

Most of the schools that employ those coaches have not announced universitywide salary or job cuts, but they are all facing deep financial distress, accepting millions of dollars in taxpayer relief and, in most cases, implementing a range of cost-saving measures inside and outside athletics.

The list of those whose pay is unchanged includes the two highest-paid coaches in their respective sports: Clemson football coach Dabo Swinney, who earned $9.3 million in the 2019-20 season, and Kentucky basketball coach John Calipari, who earned $8.2 million. Others include, in football, Alabama’s Nick Saban ($8.9 million) and Texas A&M’s Jimbo Fisher ($7.5 million) and, in basketball, Tennessee’s Rick Barnes ($4.7 million) and Texas Tech’s Chris Beard ($4.4 million).

Two of the highest-paid coaches — Calipari and Texas football coach Tom Herman ($6.75 million) — have not taken cuts even as their universities announced reduced pay for other employees, furloughs or layoffs. A Texas spokesman said the school is considering options as it finalizes its budget.

ESPN contacted all 65 Power 5 schools, plus 10 other colleges with top-tier basketball programs, to determine the extent to which coaches are sharing in unprecedented financial burdens related to the pandemic.

At 33 of the 75 schools, at least one coach agreed to renegotiate a contract to accept a pay cut amid the pandemic, according to the survey. They include Michigan football coach Jim Harbaugh, who last month agreed to a one-year, 10% cut of his $7.5 million salary; Kansas basketball coach Bill Self ($4 million, 10% cut for six months); and Oklahoma football coach Lincoln Riley ($6.4 million, 10% cut for one year).

At 26 of the schools, those coaches have yet to see their pay reduced. Many work at public universities and are the highest-paid public employees in their states. A UCLA spokesperson said basketball coach Mick Cronin ($5.5 million) and football coach Chip Kelly ($3.5 million) have both indicated they would take pay cuts, but the department is awaiting guidance from the University of California president’s office.

Sixteen schools, most of them private, declined to respond to ESPN’s questions.

The coaches work under contracts that typically would preclude salary cuts without their approval. At the schools where coaches haven’t taken cuts, it’s unclear whether they have been asked to do so by the university presidents, some of whom have themselves taken voluntary reductions.

Agent Jimmy Sexton represents a handful of coaches who have taken pay cuts, but at least a dozen who have not, including football coaches Saban, Fisher, Georgia’s Kirby Smart ($6.9 million), Auburn’s Gus Malzahn ($6.8 million) and Florida’s Dan Mullen ($6.1 million). Sexton declined to comment. None of the coaches who have not taken pay cuts responded to interview requests ESPN sent through their athletic departments.

One Sexton client, South Carolina’s Will Muschamp ($4.4 million), said giving up 10% of his pay for one year was “a very easy decision.” Muschamp said he and his wife had already decided he would offer up a pay cut when his athletic director, Ray Tanner, asked if he would consider it. The school is facing a $127 million shortfall and has announced a long list of cost-saving measures.

“Our state is going through a really difficult time; our university is going through a really difficult time,” Muschamp said. “I’ve been fortunate in my coaching career.”

Muschamp said he will not recoup the reduced salary with any type of back-end compensation, “and I’m fine with that. Best thing to do.” His 10 assistant coaches, who combined for more than $5.6 million in 2019 salary, aren’t taking pay cuts, but they are part of schoolwide furloughs.

Even before the pandemic, the issue of skyrocketing salaries for coaches whose success is measured by the performance of unpaid athletes had attracted scrutiny from player advocates, economists and Congress.

The coaches preside over programs that bring in millions of dollars and nationwide recognition for their universities. Still, none of the programs can exist outside the schools’ infrastructure, and only slightly more than half of the public Power 5 athletic departments can pay for themselves without support from student fees or the university’s general fund, now under unprecedented strain almost everywhere.

“Clearly, even if the schools don’t decide that they are going to reduce the coaches’ salaries, as they did to the teachers and to the students’ classes, the coaches can decide to do it themselves,” said Steve Ellis, the president of Taxpayers for Common Sense, a nonpartisan watchdog. “A lot of Americans are hurting right now because they can’t work because their job is closed. … And so it’s a really difficult time. And so that’s really where it comes back to these coaches. Are they in this with us?”

At the University of Arizona, football coach Kevin Sumlin ($2 million) and men’s basketball coach Sean Miller ($3.2 million) accepted 20% pay cuts this year — believed to be among the highest in the country.

“Everyone realized what they needed to do to help our department and university and really to do the right thing,” said Arizona athletic director Dave Heeke, who also took a 20% cut.

Among Power 5 schools, Arizona is one of the most reliant on direct institutional support from the university to fund athletics, with 9.1% of its athletic department budget derived from university support in 2017-18, according to an analysis of data from the Knight Commission on Intercollegiate Athletics. For salary data and rankings, ESPN relied on USA Today’s survey of college coaches’ salaries. Figures represent salaries earned in the coaches’ most recent season, although data for private schools might be older.

ALL BUT FOUR schools in the ESPN survey — Northwestern, Notre Dame, Stanford and Duke — received money from the Coronavirus Aid, Relief and Economic Security (CARES) Act, which passed in March. Schools are required to spend half of CARES money on students, but the rest is discretionary. Clemson accepted $13.6 million in CARES money, Alabama more than $20 million and Kentucky almost $18 million.

“It shows how out of whack the overall priorities are,” Ellis said. “The fact that the federal government, the taxpayers, recognize that these schools are in distress and that there needs to be assistance.”

Andy Schwarz, a sports economist and an advocate for paying college athletes, said coaches should participate in the financial burdens facing universities.

“You do need to ask for shared sacrifice in a situation like this,” Schwarz said. “At places where cuts are happening and the head coach isn’t taking a cut, how is that person a leader? Leaders share in the sacrifice of their team, both on their team, in the athletic department, and the university.”

Ken Redd, senior director of research and policy analysis for the National Association of College and University Business Officers, said the issue is largely symbolic because athletics represents a small portion of the overall university budget and the high salaries paid to coaches often come from outside sources. On top of that, he said, it’s tough to compare the value of salaries paid to instructors with coaches whose teams can bring in millions in revenue in normal times.

“Symbolically, it’s the same, but financially, it’s a very different conversation when you start digging into those coaches’ contracts,” Redd said. “Let’s face it. The dean of the science department is certainly an important person, but no matter how good he or she is, [the dean] is not going to bring in $100 million to the school.”

It’s not clear if athletic departments would have to pay their coaches if there’s no football this fall. The type of force majeure clauses that would give a school the ability to withhold payment from a coach are rare and unlikely to be ironclad, according to multiple industry sources who spoke to ESPN.

COLLEGES ARE BRACING for huge losses from declining enrollment due to the pandemic. At the same time, athletic departments are facing dramatic losses of their own, starting with the cancellation of the NCAA basketball tournament in March. A year ago, schools split a pool of $600 million; this year, they were told to expect barely a third of that. With larger uncertainty ahead — namely whether there will be football this fall — athletic directors are looking for ways to save money, including the elimination of some sports.

At Clemson, neither Swinney nor any of his assistant coaches (combined salaries of $7.4 million) have been asked to take pay cuts. The university reported losing $25 million during the spring semester and implemented a series of cost-cutting measures, including a hiring freeze and a pause on some capital projects. The school also projects an additional $16.5 million hit in the fall, according to the South Carolina Commission on Higher Education, although the school said there have been no job losses or salary cuts at this point.

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In April, Clemson’s athletic department, which routinely has revenue of upward of $100 million, said it expected to lose $1 million but had no need to implement any cuts. An athletic department spokesperson told ESPN earlier this week, “To date, Clemson University and the department of athletics have not implemented any mandatory or voluntary salary reductions, furloughs or layoffs due to the financial impacts of COVID-19.”

The situation is similar at Alabama, where the university has projected losses of $40 million to $50 million by the end of the summer. But the school told ESPN it hasn’t made any universitywide layoffs, furloughs or salary cuts. So far, Saban’s $8.9 million salary is intact, along with the $7.5 million allotted to his assistants. No one at the University of Alabama agreed to be interviewed for this story, including Saban, athletic director Greg Byrne, president Stuart R. Bell or presidents of the faculty senate and student government.

At Kentucky, Calipari’s $8.2 million salary also has not been cut. In April, the school president announced that he expected layoffs, furloughs and 10% budget cuts across campus to address a $70 million shortfall. During a board of trustees meeting in June, athletic director Mitch Barnhart laid out a 17% reduction to his department for the 2020-21 school year and described it as a “necessary sacrifice.” Barnhart suggested that rather than cut salaries, money could be saved in the coming year by, among other things, eliminating charter flights for some teams — a change that could lead to some athletes missing additional class time if they return to campus this fall.

Calipari and Barnhart declined interview requests. Spokesman Eric Lindsey pointed to philanthropic work and donations Calipari has made during the pandemic. Lindsey added that Calipari “only receives $400,000 of his salary from the athletic department,” with the majority coming from the school’s marketing partner, JMI. Lindsey also suggested that Calipari’s salary shouldn’t be considered in the context of the university’s budget woes because “the athletic department operates on an independent budget and does not take any funds from the university.”

SCHWARZ, THE SPORTS economist, challenged the argument that somehow athletic departments are separate entities.

“That ethos says to [the university administration], ‘You’re not giving us a dime; it’s our money,'” Schwarz said. “But it’s not; the name on the jersey is the name of the school. That’s intellectual property of the university.”

Salaries typically represent a significant piece of athletic department budgets. At Purdue, for example, the annual pay to football coach Jeff Brohm ($6.6 million) and men’s basketball coach Matt Painter ($3 million) represents roughly a quarter of all wages paid out to athletic department employees — the entity’s biggest expense. In June, Purdue announced it was reducing its projected athletic department budget by $10 million, based on an assumption that football would be played and the Boilermakers’ home stadium would be filled to 25% capacity.

Purdue athletic director Mike Bobinski told ESPN the projection was just a snapshot in time: “We have almost zero clarity still as to what the year is going to look like.” Bobinski said the department is “curtailing every ounce of discretionary spending we can.” Asked about salary cuts to his coaches, Bobinski said, “The only reason we haven’t enacted any of the fancy salary cuts that get a lot of attention is that I want to wait until I have the very best information, because I don’t want to go back multiple times to people on things like that.”

Pressed on whether he would ask his highest-paid employees to help shoulder the burden, Bobinski said, “Everything is being considered. I get it. I’ve read every other plan that other folks have enacted. We’re thinking about all the same kinds of things. That’s all I have to give you on that.”

Purdue was among the first universities nationwide to announce in early April that it would not give its faculty merit pay raises in the coming fiscal year. University president Mitch Daniels said at the time it would be “irresponsible” to approve a pool of money for raises that would increase the faculty pay by 3%. Professor Cheryl Cooky, who was as the time the chair of the faculty senate at Purdue, said some faculty members questioned why the athletic department wasn’t also cutting costs.

“Certainly, when the merit pay cut was announced, there were questions that came up as to whether or not the football coach and the men’s basketball coach were going to take cuts in pay,” Cooky said. “That was just sort of brushed aside and wasn’t really addressed. For me, I think that would have gone a long way at that time in the sense of we’re all in this together.”

Of the 65 coaches who have taken what amount to voluntary salary cuts, the highest paid is Harbaugh at Michigan. With the athletic department facing a $26 million deficit, Michigan athletic director Warde Manuel agreeing to a 5% salary cut, and the school estimating losses of at least $400 million, Harbaugh took a one-year, 10% cut to his $7.5 million salary.

Michigan announced that Harbaugh and men’s basketball coach Juwan Howard were among “many head coaches” at the school who would take 10% cuts. Additionally, full-time staff earning from $50,000 to $100,000 would take 5% cuts and staff earning from $100,001 to $150,000 would see their salaries reduced by 7.5%.

An hour northwest of Ann Arbor, at Michigan State, the university instituted layoffs, salary cuts and other cost-saving measures to counteract a $50 million to $60 million loss in the fiscal year that ended June 30. The school’s president, who took a 10% pay reduction, wrote in a letter to the university community, “There are more budget and employment decisions that will impact our community yet to be made.” This week, a university spokesman said men’s basketball coach Tom Izzo and football coach Mel Tucker would take 7% cuts starting Sept. 1. Their boss, athletic director Bill Beekman, is taking a 10% cut.

Of the 75 universities surveyed by ESPN, nine from the Big Ten and eight from the Pac-12 had coaches who had taken cuts — the most among conferences. In contrast, in the SEC, only three schools (Missouri, Ole Miss and South Carolina) had coaches who had taken cuts. One (Vanderbilt) refused to respond to questions — though the school announced last week it was cutting its entire athletics communication department — and the other 10 said their coaches hadn’t seen their salaries reduced.

ONE OF THOSE 10 schools was Texas A&M, where Fisher is the fourth highest-paid football coach in the country, earning $7.5 million a year. His assistants take in another combined $7.1 million. In May, Texas A&M asked employees to prepare for possible 7.5% budget reductions across the board. A month earlier, chancellor John Sharp told the Texas Tribune that the A&M system had issued nearly $48 million in refunds for housing and dining during the spring semester. He estimated additional losses at the time were already $33 million and said he expected higher education to be hammered in the state budget.

An athletic department spokesman told ESPN that with the school’s fiscal year ending Aug. 31, “Decisions regarding operational expenses are ongoing.”

Shane Hinckley, vice president for brand development at Texas A&M, said in a recent interview that the university actually expects to weather the pandemic better than most schools.

“I saw what Arizona did,” he said, referencing that school’s decision to make across-the-board furloughs and pay cuts, including to athletics. “Right now, Texas A&M is not going through that process. But there are divisions that are looking at eliminating open positions, not rehiring … and there may be some staff loss, based upon what each unit decides to do, but that’s definitely not the general consensus across the board.”

With COVID-19 cases rising in Texas, and bars, restaurants and shops having to close — meaning a further loss in state sales tax revenue — Hinckley said the situation could change. Either way, Hinckley said he wouldn’t speculate whether Fisher or men’s basketball coach Buzz Williams should take a pay cut, but Hinckley said that even if they did, it would have a minimal financial impact overall.

Texas A&M faculty senate secretary Alva O. Ferdinand, an assistant professor in the department of health policy and management, said she has been focused on how to prepare faculty for teaching in the fall and that she is “not a huge sports fan.”

“I am an immigrant. American football is sort of a thing that occurs that I don’t fully understand. I know that I was shocked to find out about the discrepancies in salary,” Ferdinand said. However, she said she understood that athletics and academics are funded separately.

“As somebody put it last year, football is sort of the front porch of the university, so I get that,” she said. “I don’t know that I can say in good conscience, ‘Well, yeah, they should take a pay cut.’ For now, none of the rest of us are, so I just don’t really feel strongly one way or another on that.”

On April 2, Iowa State athletic director Jamie Pollard held a teleconference with media to detail how every member of his department, including himself, would take a 10% hit. Most notably, that included football coach Matt Campbell ($3.6 million) and men’s basketball coach Steve Prohm ($2.4 million). Both coaches also would forgo any possible bonuses. With that, Iowa State became the first school in the country to announce its highest-paid coaches would forgo parts of their salary because of the pandemic. More than two dozen schools followed suit.

And Pollard warned that tougher times could be ahead depending on how bad the pandemic gets. Without fall sports, namely football, his department faces a $40 million shortfall over the next six months. The department’s largest line item is the $30 million it pays in salaries each year, representing 35% of its total budget.

“Is it a winter blizzard where we are all hunkering down for the weekend? [Is it] the farmer’s almanac saying we are in for a tough winter? [Is it] an ice age?” he told reporters.

“If we don’t play football this fall, it’s ice age time.”

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