Summary of "Why Are College Coaches Paid So Much?"
The Indicator from Planet Money
Episode Title: Why Are College Coaches Paid So Much?
Host: Darian Woods and Adrian Ma
Release Date: May 28, 2025
Introduction
In this episode of The Indicator from Planet Money, hosts Darian Woods and Adrian Ma delve into the lucrative salaries of college football coaches. With figures soaring into the millions, the episode explores whether these high paychecks make economic sense for universities and the broader implications on higher education.
High Salaries of College Coaches
Darian Woods opens the discussion by highlighting the stark contrast in salaries between football coaches and other university positions:
“Take the University of Alabama. Its football coach is getting paid close to $11 million. University of Georgia, its football coach was paid over $13 million last year. Meanwhile, the college's president was getting paid only about 1 million.” [00:35]
Adrian Ma further emphasizes the prominence of coaching salaries in higher education:
“In at least 39 states, the person with the highest salary on public payrolls is either a football coach or a basketball coach.” [06:35]
Economic Justifications
To understand the rationale behind these high salaries, the hosts speak with Greg Byrne, University of Alabama's Athletic Director, and Kalyn DeBoer, the university's football coach.
Greg Byrne explains the financial model:
“The football team turns a very healthy profit. So does basketball, but then they have a lot of other sports that don't make money.” [03:13]
Kalyn DeBoer adds that football serves as the "engine that pulls the train," generating necessary revenue for broader athletic programs and enhancing university engagement:
“It's a way to get people involved and engage with your university like few other things can.” [03:33]
Revenue Generation and Enrollment Boost
The episode highlights how successful football programs can significantly boost a university's profile and enrollment numbers. Recalling Nick Saban's impact at Alabama, Kalyn DeBoer notes:
“When Saban arrived, the student body was around 25,000, and we've gone to over 40,000 now.” [04:13]
Greg Byrne summarizes this effect by likening top coaches to a form of national advertisement for the university:
“It's almost like they're a coach, but they're also a form of advertisement.” [04:29]
Economic Criticism of High Salaries
Despite these justifications, the episode presents a contrasting viewpoint from Andrew Zimbalist, a sports economist at Smith College. Zimbalist challenges the economic viability of high coaching salaries:
“If you're paying some coach $7 million and there's not a $7 million spike in revenue, then it's not, it's not paying off for you.” [05:02]
He further critiques the sustainability of this model:
“Top leagues, athletic departments, are each losing an average of $20 million or more a year.” [05:29]
Zimbalist argues that the general trend does not support the economic benefits claimed by athletic departments:
“The notion that you should make these investments in the form of losses and 10 and 20 million dollars losses every year on your team doesn't hold up as a positive economic strategy.” [06:19]
Artificial Market Factors
Andrew Zimbalist identifies several factors that create an artificial market for college coaches, distancing it from typical commercial markets:
- Tax Benefits
- Public Ownership: University athletic programs do not have private shareholders demanding profits.
- Subsidies: Significant financial support from universities and state governments.
- Student Tuition: Sports are often indirectly funded through student fees.
- Unpaid Athletes: Historically, athletes were not compensated, allowing funds to be allocated to coaching salaries.
“College sports has a bunch of tax benefits... Till recently, college athletes didn't get paid, and so there was more funding available for the coaches salaries.” [07:37]
These factors prevent the natural market discipline that might otherwise regulate salaries:
“You don't have any of the normal discipline that happens in a typical commercial market when you move over to college sports.” [07:19]
Institutional Inertia and Cultural Significance
The episode discusses why, despite economic criticisms, high salaries persist. Zimbalist explains that college presidents often prioritize maintaining athletic traditions and alumni satisfaction over financial pragmatism:
“Athletics is part of the culture. It's something that all the alumni love and like... the few college presidents historically, who have stood up and said, this is unacceptable, this is shameful, what we're doing, they've gotten their wings clipped.” [07:37]
A historical perspective underscores the long-standing tension between academic administration and athletic departments:
“In the early 1900s, there was a president at UNC Chapel Hill who was, according to The New York Times practically run out of town after criticizing the athletic department.” [08:19]
A 2009 survey revealed that despite 85% of university presidents recognizing excessive salaries, they felt powerless to address them:
“85% felt that football and basketball coaches salaries were excessive, but they felt they couldn't control them.” [08:49]
Case Study: University of Alabama
Returning to Greg Byrne and Kalyn DeBoer, the episode examines whether Alabama's high-paying football coaches are an exception or representative of a broader trend.
Greg Byrne asserts that at Alabama, the football program is self-sustaining through multiple revenue streams:
“The revenue to pay for our coaches salaries come from revenue that we generate through ticket sales, through donations, through our conference revenue and television packages.” [09:15]
Kalyn DeBoer points out that each institution must evaluate what works for them, acknowledging that high salaries may not be feasible or beneficial for all universities:
“Each institution has to decide what works for them... it's a way to invest and market their program.” [09:53]
Conclusion
The episode concludes by highlighting that while elite programs like the University of Alabama may justify high coaching salaries through substantial revenue and institutional benefits, this model is not universally applicable. The artificial market conditions and cultural significance of sports in higher education perpetuate these high salaries, often without clear economic returns.
Notable Quotes
- Darian Woods: “Take the University of Alabama. Its football coach is getting paid close to $11 million.” [00:35]
- Greg Byrne: “It's almost like they're a coach, but they're also a form of advertisement.” [04:29]
- Andrew Zimbalist: “It's not paying off for you.” [05:02]
- Andrew Zimbalist: “College sports has a bunch of tax benefits... funding available for the coaches salaries.” [07:37]
- Kalyn DeBoer: “It's a way to get people involved and engage with your university like few other things can.” [03:33]
This episode of The Indicator provides a comprehensive analysis of the economic dynamics behind the high salaries of college football coaches, balancing institutional justifications with critical economic perspectives. It offers listeners a nuanced understanding of how sports influence higher education economics and the broader implications for universities across the United States.