It was widely reported recently that Alabama will pay Nick Saban $7 million per year to coach its student-athletes. Now, this probably is not true. Alabama will likely pay Saban more than $7 million annually. Sure, Saban's new contract runs through 2020, schools are in the habit of tearing up contracts and bumping up salaries every time the coach has a great season, and Saban is in the great-season business. It should not surprise anybody if Alabama gives Saban another raise next year.
Some will argue that Saban is worth $7 million per year. This is probably not true, either. He is almost certainly worth more than $7 million.
It's hard to quantify these things, but when you factor in Alabama's revenue, fund-raising, general alumni happiness, and how Crimson Tide victories improve the mental health of the populace, which must lower the state unemployment rate ... well, again, it's hard to quantify. But if Saban demanded $10 million per season, would Alabama's administrators really stand on principle and let him walk away? I doubt it. And if they did, fans would be furious at those administrators. They would be putting their jobs at risk.
Still, $7 million is an enormous number, and not just in the abstract, it's-all-Monopoly-money way that we view the salaries of celebrities. It is enormous compared to what other coaches make. As Alabama.com and The Big Lead pointed out this week, Saban is one of the highest-paid coaches in all of sports, college or pro. He may only trail Sean Payton ($8 million per season).
According to Forbes, Bill Belichick makes $7.5 million a year, though Belichick keeps his contract status as secretive as he can, because this amuses him. Fellow NFL coaches Andy Reid and Jeff Fisher supposedly make $7 million per season. L.A. Clippers owner Donald Sterling supposedly pays coach Doc Rivers $7 million per season to coach his team, but Rivers has to do more than coach. He also has to talk to Donald Sterling. It's hard to put a price on that.
Some more context: Yankees manager Joe Girardi just hit free agency. The Chicago Cubs wanted him. The Yankees wanted to keep him. This was big market vs. bigger market, and Girardi stayed with the Yankees. The Yankees -- the Yankees, the biggest cash machine in American sports -- will pay Girardi $4 million a year.
The Brooklyn Nets will pay somewhere between $180 million and $190 million for their team, almost half of it in luxury taxes. It's a lousy team, but the Nets didn't know that last summer. The Nets are paying coach Jason Kidd $2.5 million per year -- barely a third of what Saban will make. Yes, Kidd is a lousy coach, but again, the Nets didn't know that last summer.
It's hard to compare coaches in different sports. But we are nearing the point when top-level college coaching is a more lucrative gig than coaching the pros. That is astounding, in a sense -- pro teams play more games, they get higher TV ratings, and they don't have to support academic advisors or pay for volleyball scholarships.
In another sense, though, this is perfectly reasonable. Pro teams have so many tools they can use to improve. They can sign free agents, acquire draft choices or pour money into scouting. Some pro teams see coaches more as an extension of the front office, charged with implementing the philosophy (and following the advanced stats) preferred by the general manager.
College athletic departments, as currently constructed, don't have as many tools. They can build new facilities to attract recruits, but that is way more expensive than hiring a coach like Saban (who would demand new facilities anyway). They can pay recruits under the table, but there is some risk involved, and some are reluctant to do it because it is against the rules. Besides, the mechanics of under-the-table payments are complicated. You can't really write a check from a university account, make it out to a defensive end, and hope nobody finds out.
In terms of return on investment, paying for a proven coach is usually the best use of athletic-department money.
And since colleges are so terrified of losing their coaches, contract terms tend to favor the coach. The Yankees are unlikely to give Girardi a raise or let him leave for another team until his contract expires. College coaches often break deals, as long as somebody pays their buyouts, and the mere threat of leaving often results in a raise.
The ramifications of this will be felt in the next few years. They are bigger than you might think. Consider what is happening in Austin, Texas this week.
Texas is looking for a coach to replace Mack Brown, who was no longer worth the more than $5 million per year that Texas was paying him. The hot rumors are Jim Harbaugh and Chip Kelly, two pro coaches who are having good years, are on extremely safe ground, and have no logical reason to leave.
I don't know if Kelly or Harbaugh would go to Texas. I suspect neither would, because the challenge of pro coaching is more appealing to both of them. But don't be surprised if Texas lures another pro coach, or outbids professional teams for coveted free-agent coaches. The fact is, a coach is worth more to Texas than to a pro team, and Texas has more money to spend than most pro teams, because Texas doesn't have to pay players anywhere near what they are worth. It's nice having cheap labor.