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SBD/December 6, 2012/CollegesPrint All
Coaching salaries cannot continue to rise at their current rate, said NCAA President Mark Emmert during the opening of the ‘12 IMG Intercollegiate Athletics Forum in N.Y. But he added that there was little regulation that could be put in place, save for the drastic scenario of athletic departments running out of money. “It’s a free market, with huge pressure and a limited number of skilled people,” Emmert said. “It’s something that we all have to live with. I was asked the other day when will coaches' salaries be capped, and I said, 'When athletic departments run out of money,' and I wasn’t being facetious.” He added that the current system is not sustainable. “We don’t have a legal structure where we say, ‘Thou shalt not pay more than X for a coach or an assistant coach,’” he said. “At the close of every season, there’s a bidding war for coaches. So the system where someone suggesting they might hire your coach and now you have to pay them more, that’s not sustainable.” The issue of coaching salaries was prominent not only during a one-on-one interview with Emmert, but on subsequent panels throughout the day. Nebraska Chancellor Harvey Perlman talked about the complexity of the issue and how it affects an entire athletic department. “The whole effort over the last couple of years to control athletic costs, since you can’t control salaries, is to do things that aren’t good for students,” he said.
WHAT TO DO? There were few specifics of possible options to control costs, but Perlman brought up the option of studying a legal remedy. “We know the antitrust laws prohibit us from agreeing to cap coaches’ salaries,” he said, “so there’s really two options. One is to figure out a creative way to do it within the antitrust laws. Or, second, is to get the antitrust laws changed. I know there’s great reluctance, but there’s been conversations within the NCAA about going before Congress and doing something about this.” Emmert countered, “It’s been discussed for years, but the notion right now of going before Congress and trying to figure out a highly-complex, highly-political bill, or an antitrust model for intercollegiate athletics, would probably have more unintended consequences than any of us could imagine. If the NCAA is a ‘weird’ decision-making organization, then I’m not sure what the right adjective is for Congress. To turn over our fate to them at this moment would be risky.” Perlman stressed one area he would most like to see accomplished in the next year is “some control over coaches’ salaries.” But then he added he is “realistic” and knows it is unlikely to happen.
FROM ONE WHO WENT THROUGH IT: N.C. State AD Debbie Yow discussed the pressure of rising salaries in hiring coaches, as she just went through it over the last two weeks in hiring Dave Doeren from Northern Illinois as the school’s new football coach. “We pressed really hard, very fast,” she said. “I consider (the deal) a bargain at $1.8 million (annually). We did the buyout, but he paid some taxes. For those who may not have thought that, paying the taxes is a big deal, it's a point of discussion. I think it was 17% of the buyout.” She admitted to being relieved to get a deal for a football coach at less than $2M a year. “It was an extraordinary relief to get out for $1.8 and get the person we wanted,” Yow said. “Because I'm watching now from the sidelines, and as far as I can tell, the numbers are going up every single day, and the pool was shallow this year of qualified coaches, with way too many schools out looking. So it's a coaches market and the majority of schools don't have theirs filled." Michigan State AD Mark Hollis stressed it was not just the salaries of a head coach impacting the department’s finances, saying, “There's been a trickle down effect. Not only the position of hiring somebody, it's retaining coaches.”SAMPLING OF RECENT HIRES BY FBS SCHOOLS
Arkansas Bret Bielema6$3.2M Bobby Petrino*$3.6M Auburn Gus Malzahn5$2.3M Gene Chizik$3.6M N.C. State Dave Doeren5$1.8M Tom O'Brien$1.9M Kentucky Mark Stoops5$1.1M Joker Phillips$1.7M
NOTE: * = Petrino signed a seven-year extension in December '10, but was fired by Arkansas following an attempt to cover up an affair with a female football employee. Petrino was succeeded by now-former coach John L. Smith, who signed a 10-month contract for $850,000.
As numerous high-profile colleges have recently fired their football coaches this season, schools have been forced to pay out millions of dollars in contract obligations. Syndicated radio host Paul Finebaum said Auburn firing football coach Gene Chizik just two years removed from winning the National Championship from a distance “looks like a bad decision, but up close it was a necessary evil, particularly because of Nick Saban." Finebaum: "If you keep a coach and it doesn’t work, yes, you’ve saved $11 million ... but you have fallen farther behind. It sounds bad, but happens on Wall Street every day of the week.” ESPN’s Jeremy Schaap said those moves are “held accountable” by corporate BODs and shareholders, so are there “any consequences here for the presidents and ADs who make these bad hires and then the universities are in the hole for millions and millions of dollars?” ESPN’s Darren Rovell said, “I am surprised that the athletic directors are not more often held accountable. To tell you the truth, over the last seven to 10 years as this has become more of a professional business, as the big-time agents have come to represent these coaches, ADs have gotten killed in contract negotiation time. ... When you see what some of these agents get for these guys, it is unbelievable.” Northeastern Univ. AD Peter Roby said, “I thought we were in the business of higher education and so rather than worrying about what Alabama is doing, why isn’t Auburn and other schools worried about what’s in the best interests of the students and the institution with respect to educating young people? We have got schools leaving conferences, getting out of relationships, severing relationships, suing each other.” Finebaum replied, “The reality is we are talking about professional sports” (“Outside The Lines,” ESPN, 12/5).
The first day of ‘12 IMG Intercollegiate Athletics Forum concluded with a diverse group of execs that shape the intercollegiate sports landscape touching on a variety of topics. Taking part in the panel were BCS Exec Dir Bill Hancock, NCAA Exec VP/Championships & Alliances Mark Lewis, ESPN Senior VP/College Sports Programming Burke Magnus, IMG College President Ben Sutton and Notre Dame AD Jack Swarbrick. Swarbrick said he was “surprised by the timing, but not the result” of the exit of Maryland from the ACC. When asked if it made him rethink the decision for Notre Dame to join the conference, he said it did not. Sutton believes we have not seen the end of realignment. Magnus added that from ESPN’s perspective, “Instability is bad for business. ... Every move that has been made costs ESPN money.” In the wake of the defections of Rutgers to the Big Ten and Louisville to the ACC, Magnus said of the future of the Big East and its negotiations with ESPN, “It’s a different time than it was almost two years ago at this point. ... We’re having discussions and we don’t intend to cut off those conversations for any reason despite the recent activity. We still think there’s content that we could see value in. Not to mention the fact that our company and the Big East are nearly exactly the same age to the day -- we have a 30-plus year history together so before that ceases to exist from a relationship perspective, we’re going to take a good shot at keeping that going.”
FOUR THE RECORD: Sutton addressed the college football playoff format to begin in ’14. He said, “Four is the right number. ... It’s hard for me to imagine it going past four because the regular season in college football is the greatest 14 weeks in sports in the United States of America. Period.” Hancock, discussing the progress being made to iron out the details of the new format, said, “We do have a framework (on a revenue-sharing model). The next big step is the selection committee, who’s on it, how many (people), and what are their procedures. ... The first venue will probably follow that and it will be selected pretty quickly.” Hancock was asked whether college football can reclaim New Year’s Day. He said, “You bet we can. I don’t really know what’s to reclaim? New Year’s Day is college football and I hear that all the time.”
Swarbrick predicts changes in business models
Navigating the exploding realm of digital and social media remains one of the most daunting and exciting challenges for university administrators and their media partners. A panel at the ‘12 IMG Intercollegiate Athletics Forum discussed intellectual properties and the associated challenges. There is no shortage of content opportunities for college athletic departments, particularly for Olympic sports that do not get as much exposure on TV and proportionately benefit more from digital distribution. With digital subscriber and advertising interest continuing to grow, revenue opportunities also are robust. But sorting out the distribution and rights landscapes remain a thorny issue. For example, a behind-the-scenes video of a team traveling to its next game -- fairly simple content to produce -- has quickly proven popular with many schools. But should that material go straight to the university's athletic website? To YouTube? To conference-run cable channels? National media partners? All of the above? How is the related revenue divided? How are fans properly directed without getting confused or frustrated? Learfield Sports Chief Content Officer Joe Ferreira said, "Awareness is a big issue, now that there's so much content and so many avenues." UCLA Senior Associate AD/External Relations Mark Harlan added, "The biggest challenge we have is having all the resources to support all this content. We're now all hiring videographers and storytellers. We did the same before with writers, generating content, and now we're doing the same with video. And that comes with a cost."
-- Ferreira on whether college sports, which are traditionally strong at the regional and local levels, still have untapped potential as a national entity: "People are buying into college football at those local levels. We need to look at how we drive that to a national level.”
-- Google Head of Sport for North America Frank Golding has concerns with exploding TV rights fees. He said, "How do we grow the pie? We can't keep offering these kinds of rights fees without growing the pie."
-- NeuLion Exec VP Chris Wagner said that there is significant opportunity in college sports to develop more whip-around and scoring play-related content. Wagner: "People want to take the concept of 'RedZone' and apply it to college.”
At the ‘12 IMG Intercollegiate Athletics Forum, a panel discussion titled, "The New Breed of Athletic Administrators," looked at qualities that define new leaders in college sports today. RSR Partners Sports Practice Managing Dir Joe Bailey, who served as the interim Big East Commissioner prior to Mike Aresco filling the position, said universities are looking for effective leaders with certain qualities: passion, vision, being trustworthy and having an ego strong enough to hire the best people. Arizona State AD & VP/Athletics Steve Patterson made sweeping changes when he joined the school nine months ago after a stint as president of Pro Sports Consulting and 25 years with the Rockets, Texans, Trail Blazers and AHL Houston Aeros. He said, "I had to accelerate the pace, accelerate accountability.” At ASU, Patterson put in place individual business plans for each team, something that had never been done at the school. Patterson said, "A long-term business plan, a strategy, helps you get to where you want to get to.” As a recommendation for young people looking to get into college athletics, Rutgers AD Tim Pernetti suggested finding internships outside the realm. Pernetti said, “Experience in the private sector is crucial. We're talking about businesses that can be over $150 million. It's a massive business." Bowling Green AD Greg Christopher clarified that being an AD is not just about running a business. He said, "These jobs are large-scale human resources jobs. You have to be able to manage relationships and know how to handle a range of issues."
The flurry of conference realignment in college sports has created an "erosion of trust" among schools and conference commissioners, and an unhealthy environment in higher education, according to a panel of athletic directors at the ‘12 IMG Intercollegiate Athletics Forum. Missouri AD Mike Alden, whose school moved from the Big 12 to the SEC this year, used that phrase to describe the current climate of secret talks and backroom deals schools are making these days in the rush to put their institutions in better financial position. One example is Maryland, which recently jumped from the ACC to the Big Ten. Nobody knew it was coming and it was a messy process, said N.C. State AD Debbie Yow, who previously served as Maryland's AD. Yow said, "The presidents of the ACC trust each other and had an agreement that they would be contacted (by a school leaving the conference.) Obviously there wouldn't be any attempt to keep them from someone else but they would at least know. That's the trust factor and that didn't occur. I know (ACC Commissioner) John Swofford was trying diligently to get in touch with people and they didn't respond for two days. Not cool.” She added, "They're going to be missed, there's no question about that. But they're going to be on a plane going to Madison, Wisconsin, to play men's basketball in the middle of winter. Good luck. I hope the money is really good."
EASIER SAID THAN DONE: UConn AD Warde Manuel said that for schools considering a move, it is not easy to have those discussions in private, knowing the rumors that surface over those talks could hurt negotiations. UConn is one school that has been mentioned as a candidate to move from the Big East to another league, possibly the ACC. He said, “The complications are the discussions we have at the Big East, different conference meetings with presidents and commissioners. The Big East has done a lot of great things for us and we've done a lot of great things for the Big East, but the landscape has changed. So I wouldn't be doing my due diligence if I didn't continue to look at what else is going (on) around me as it relates to what's to the benefit of Connecticut." He added there are a lot of "side conversations, rumors, innuendo, what's happening out there, what's going to happen." Manuel: "You just have to get through all that and concentrate on being better."
-- Alden, on the school moving to the SEC: "When you transfer to a new neighborhood, you have to learn who your neighbors are. We know over the course of the next several decades it will be a tremendous move. We weren't relevant in Atlanta, Orlando, Tampa-St. Pete. Our footprint went from 45 million households in the Big 12 to 89 million overnight. To expose Missouri to a broader audience has been a driving factor in all of this."
-- Michigan State AD Mark Hollis, on Big Ten realignment: "Nebraska involved a dating process before we got married. With Rutgers and Maryland, we got married and now we're trying to figure out how to live under the same roof."
-- Yow, on realignment: "If the money were the same, nobody would be switching (conferences). It's all about the money."
-- Yow, on the feeling of isolation that Maryland felt being on the outskirts of the ACC: "One time coach (Gary) Williams said, ‘Up here in Alaska,' as a way to refer to the ACC. When (I) was at Maryland we used to call the ACC the All Carolina Conference. You always feel that way when your headquarters are in another state."
-- Manuel, on traditions lost by realignment: "There's a lot of concern among the fan base that the things that 'I grew up knowing and loving are changing in front of me and it's going to have a negative impact on me.'"
-- Yow, on traditions: "There will be some pain as anybody changes conferences. ... There's no appreciation for the history of that particular school. Maryland played Duke in men's basketball. Tens of thousands of alums are familiar with that tremendous rivalry, and it died.”
During the opening session of the ‘12 IMG Intercollegiate Athletics Forum yesterday, NCAA President Mark Emmert sat down for a wide-ranging interview on the current state of affairs of his admitted “weird” decision-making organization. The issue of realignment continues to be a hot topic with so much activity in the past few weeks. Emmert seemed concerned with the big picture. He said, “The unintended collateral damage is an erosion of the trust that used to exist between presidents of institutions and fellow ADs. When you run a conference, you have to have some level of trust. ... If you make a commitment to (stay), and you suspect that the person you just made a commitment to is now in the hallway trying to get out of a conference, that’s a tough relationship. This has cost people’s friendships and congenialities and I’m really concerned about that.” Emmert was later joined on the panel by Nebraska Chancellor Harvey Perlman and Wake Forest President & NCAA D-I BOD Chair Nathan Hatch. They voiced their opinions on recent additions to their respective conferences. Perlman said, “We brought in two great academic institutions and we spread the footprint of the Big Ten. Obviously we entered markets that are great for media revenue.” Perlman had a high level of skepticism that the $50M exit fee for Maryland is enforceable. Hatch was sorry to see Maryland exit for financial reasons but is excited about the additions of Notre Dame and Louisville. Hatch: “It’s too bad to disrupt these deep, historic ties, but I understand fully why (Maryland) did it.”
CONTROVERSY HERE TO STAY: Perlman, who also serves on the BCS Presidential Oversight Committee, provided some interesting insight into the upcoming BCS playoff system. While a revenue-sharing model has been agreed upon, no site has been decided on yet and he knows that there will still be opponents. Perlman said, “Controversy is not going to go away. There’s enormous pressure to extend to eight and 16 schools. I don’t think it’s particularly stable over the next 12 years.” Hatch stated that he still has considerable opposition to expanding the college football season. Emmert believes the new model will change a lot of dynamics of access for all schools over time.
BREAKING OFF FROM NCAA: Emmert also addressed the issue of BCS schools forming their own governing body. He said, “If BCS schools or any other schools decide they’d be better served by having their own association, then they can and should go do that. That means that the NCAA has failed in some fashion, and as a university president, I wouldn’t want to be a part of an organization that’s failing. ... You’d have to start your own enforcement arm, replicate all the championships and recreate all the arms of the NCAA, but just do it in a way that serves your own purposes better.” Hatch said that he is opposed to setting up a whole new system.
EMMERT QUICK HITS
-- On progress at the NCAA: “Is progress happening as fast as I think is prudent? Yeah, I do. These things do require a good, thoughtful conversation. We are a very weird organization. We have 1,100 members. We have twice as many votes as Congress.”
-- On the lessons learned from the Penn State scandal: “A better support structure around university presidents and ADs. Making sure there is no existential threat to a president to say no to a coach.”
-- On transparency of the NCAA: “The whole issue of transparency in big organizations generally is a social phenomenon now because of changes that are happening in society. Are we as transparent as some people would like? No, we’re not as transparent as I would like, but we’re much more so than we used to be and we’re working hard on that.”
-- On failure of the student-athlete stipend: “I knew it was highly controversial, I didn’t anticipate the reaction it provoked. ... We didn’t do good diligence on this proposal.”