College Football Is A Massive Business

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Hey Friends,

It has been a wild few days in the world of college football.

Michigan beat their rival Ohio State for the first time in a decade, securing themselves a top-two ranking, a spot in the Big Ten Championship game, and their head coach, Jim Harbaugh, a $500,000 bonus.

Side note: Harbaugh and his wife mentioned they would be donating any bonus money he earned this season to Michigan athletic department employees that saw their pay reduced 10% to 20% last year due to COVID-19.

That’s awesome, of course, but more importantly, the collegiate coaching carousel has quickly reminded us just how much of a business high-level college football really is.

For example, just hours after adamantly denying he would be the next head coach at LSU, Lincoln Riley jumped shipped to USC, agreeing to a massive $110 million deal with the Trojans that people initially believed might include insane incentives like a $6 million Los Angeles home, unlimited use of a private jet, and more.

I mean, I guess he didn’t *technically* lie.

But not to be outdone, just weeks after claiming he wouldn’t leave Notre Dame unless a “fairy godmother” came down with a $250 million check, Brian Kelly left the 6th-ranked Fighting Irish for an equally large $100 million-plus payday at LSU.

Also, he also reportedly broke up with the team via a text message.

Now, many people are criticizing Lincoln Riley & Brian Kelly for how they resigned from their head coaching positions—in the middle of the night, no notice to the team, and in Kelly’s case, over a text message—but I’m not sure that’s entirely fair.

These deals typically come together much quicker than most would expect, and the media often breaks the news publically just minutes after the coach signs a contract.

Sure, maybe there is a way to be more honest with your program & team about your intention to consider other opportunities, but do people really expect coaches to give up their negotiating power to cater to the emotions of individuals on their team for a deal that might not even end up happening?

It sounds harsh, but remember, we are talking about life-changing $100 million-plus deals here.

The NCAA recently approved a rule that allows all college athletes to transfer one time as an undergraduate without having to sit out a season — that’s really not all that different from what coaches like Lincoln Riley & Brian Kelly are doing.

There is nuance to this, of course. Some players are moving across the country, away from their families, and are under the assumption that they will be playing for a specific head coach. Still, everyone is fully aware by now that sports are a business.

But I do think the past week has opened many people’s eyes to just how big of a business elite college football really is.

For example, through base salary & incentives, Mel Tucker at Michigan State, Lincoln Riley at USC, and Brian Kelly at LSU will all earn $9.5 million per year or more.

That seems like a lot because it is.

Not only are those deals approaching Nick Saban’s ~$10 million annual salary, but $9.5 million in annual compensation is currently more than 26 out of the 32 NFL coaches.

Highest-Paid NFL Head Coaches (Source)

• Bill Belichick: $18 million

• Pete Carroll: $14 million

• Sean Payton: $14 million

• Andy Reid: $12 million

• Mike Tomlin: $11.5 million

• Kyle Shanahan: $9.5 million

Remember, NFL teams like the Patriots bring in 10x more revenue than schools like USC—$600 million in 2018 compared to $60 million—so these salaries represent a much larger piece of the overall pie, not including booster donations of course.

New rules enabling college student-athletes to profit off their name, image, and likeness have already passed. Were only a few months into that process, but preliminary data suggests the average D1 football player might be earning a few thousand dollars and the top 1% are earning between $500,000 to $1 million.

That’s a good thing, of course. But as these coaching salaries continue to get higher and higher, I believe more people will start to question why the athletes that put their bodies on the line each week aren’t receiving a piece of the pie in return.

We’ll see what happens. Elite-level college football has become just as big of a business as major professional sports leagues — I just hope it doesn’t take another 100 years to see meaningful change.

I hope everyone has a great day, and we’ll talk tomorrow.

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Enjoy!

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