Nick Saban Is Worth More Than $11.7 Million Annually

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Hey Friends,

Nick Saban is officially the highest-paid coach in college football, again. Saban regained his spot as the highest-paid coach (passing Georiga head coach and former Alabama assistant Kirby Smart) earlier this week when the University of Alabama Board of Trustees compensation committee approved his contract extension and raise.

The new eight-year deal is worth nearly $94 million and will extend Saban’s tenure at the University of Alabama through 2030. He will make $10.7 million this season, with annual increases that will eventually pay him $12.7 million in 2029.

The average annual value of the contract is $11.7 million, and if he finishes out the deal through 2030, Saban will be 79 years old and have made more than $200 million from the University of Alabam, including salary and bonuses.

Highest-Paid College Football Coaches Annually

1. Nick Saban: $11.7 million (Alabama)

2. Kirby Smart: $11.25 million (Georgia)

3. Lincoln Riley: ~$10 million (USC)

4. Brian Kelly: $9.5 million (LSU)

5. Mel Tucker: $9.5 million (Michigan State)

But here is the most interesting part: Despite being set to earn more than $32,000 every single day for most of the next decade, I would still argue that Nick Saban is underpaid. I know, I know, but let me explain.

Some of you have probably heard about the “Flutie Effect,” right? Doug Flutie was a Boston College quarterback who successfully threw a Hail Mary to beat Miami in a nationally televised game in 1984.

The country was captivated, and that athletic success led to a 30% jump in applications at Boston College over the subsequent years. But we have also seen other examples too — applications jumped 13% at Auburn after Cam Newton led them to a National Championship in 2011, and even Florida Gulf Coast saw a 27% increase in applications after advancing to the sweet 16 as a No. 15 seed in 2013.

So, in simple terms, the general idea is that athletic success can lead to an increase in applications, enrollment, and, therefore, tuition money at a university.

And Alabama is no different. Nick Saban has built the most dominant program in college football since arriving in Tuscaloosa in 2007. They have won 6 of the past 13 national championships, played in 8 of the last 13 title games, and recorded double-digit wins every season since 2007.

That means they are constantly on national television being watched by millions of people, which, in turn, has had a trickle-down effect on other parts of the school.

For example, when Nick Saban arrived at Alabama in 2007, the school had a total enrollment of about 25,000 students. That number has increased to nearly 40,000 today, representing a 60% jump in enrollment and significantly outpacing the 10% increase that the average U.S. public college has seen over the same period.

But the *type* of student matters much more than just an increase in enrollment.

Not only has Alabama increased its annual enrollment by about 60% since Nick Saban arrived in 2007, but the composition of the student body has also drastically changed.

For example, in 2007, the majority of Alabama’s freshmen class was composed of students paying in-state tuition. But today, only about 40% of new students are from Alabama, with over 56% coming from elsewhere in the United States and the remaining 4% being international students.

That distinction is important for several reasons, but mostly financially.

Out-of-state students pay about 3x more in annual tuition than in-state students — $30,000 vs. $10,000 — and given Alabama’s out-of-state enrollment has increased from ~12,000 students in 2011 to more than 22,000 students today, that means Alabama is earning at least $200 million more in annual tuition (10,000 students x $20,000 annual price difference = $200 million).

Of course, Alabama will cover a portion of that through scholarships and other financial aid, but even if you take 50% of it away, that’s still $100 million. And don’t forget that students pay tuition annually, meaning that Alabama now reaps this ~$200 million benefit every year, regardless of its athletic performance.

This isn’t an exact science, and Nick Saban isn’t solely responsible for the increase in Alabama’s enrollment — the school started prioritizing out-of-state applicants several years ago.

But my broader point still stands. Nick Saban has turned Alabama into one of the most successful college football programs in history, which has led to an invaluable amount of advertising for the university each Fall. So while $11.7 million seems like a lot of money, you could argue Nick Saban is worth much more.

I hope everyone has a great weekend. We’ll talk on Monday.

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