Why are college coaches paid so much?

Summary

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

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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.

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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]

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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]

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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]

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Artificial Market Factors

Andrew Zimbalist identifies several factors that create an artificial market for college coaches, distancing it from typical commercial markets:

1. Tax Benefits
2. Public Ownership: University athletic programs do not have private shareholders demanding profits.
3. Subsidies: Significant financial support from universities and state governments.
4. Student Tuition: Sports are often indirectly funded through student fees.
5. 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]

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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]

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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.

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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]

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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.

Transcript

[NPR Host]

NPR.

[Darian Woods]

Student loans are getting serious now. If you don't pay, the government will soon start to do things like bring in debt collectors and garnish wages. So it's worth looking at exactly what tuition and fees are paying for. You've got building maintenance, administration, professors, salaries.

[Adrian Ma]

Yeah. And what about the highest paid college employee? That's often the football coach.

[NPR Host]

Yeah.

[Darian Woods]

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. This is the indicator from Planet Money. I'm Darian Woods.

[Adrian Ma]

And I'm Adrian Ma. Today on the show, why are college football coaches paid so much? Does it really make economic sense? We crunch the numbers after the break.

[Liz Ann Saunders]

This message comes from NPR sponsor Charles Schwab with its original podcast on Investing. Each week, hosts Liz Ann Saunders, Schwab's chief investment strategist, and Cathy Jones, Schwab's chief fixed income strategist, along with their guests, analyze economic developments and bring context to conversations around stocks, fixed income, the economy and more. Download the latest episode and [e-mail] oninvesting or wherever you get your podcasts. This message comes from Apple Card. Picture this. Somewhere in the world, an Apple Card user is getting 3% daily cash back on the purchase of an iPhone 16 at Apple. That's not all. They also earned 2% back on the new shoes they bought using Apple Pay. Visit Apple Co CardCalculator and see how much daily cash back you can earn. Subject to credit approval. Apple Card issued by Goldman Sachs Bank USA, Salt Lake City branch terms and [e-mail]. this message comes from Square. You probably know Square from your favorite local spots, but you might not know that there's a lot more to Square than meets the eye. What started as a little white card reader is now being used to rapidly scale, build loyal followings, cover cash flow gaps and expand to new locations wherever your business is growing. Square meets you there. Go to square.com go NPR to learn more.

[Greg Byrne]

To learn about why a football coach might be valuable for a university, we spoke to Greg Byrne. Greg Byrne is the University of Alabama's athletic director. So he's the one that hires the coaches. And you know, we actually spoke to.

[Kalyn DeBoer]

Him mid game about our baseball game. We have the SEC tournament. We're up 2 to 1 on Missouri in the bottom of the sixth.

[Adrian Ma]

I love that he's so dedicated to his job. He wouldn't even tear Himself away from a game to, like, do an interview with you?

[Greg Byrne]

Yeah, you know, sometimes his eyes were drifting, but, you know, he's multitasking.

[Adrian Ma]

Last year, Greg hired football coach Kalyn DeBoer for that annual salary of almost $11 million that puts him in the top 10 highest paid coaches in the country. And so we asked Greg, what's up with that? And he said, look, 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.

[Kalyn DeBoer]

And so it's an economic model where football is the engine that pulls the train. It generates the revenues. For us to be able to have broad based programming across the board, not only offer great opportunities for your student athletes, but it's a way to get people involved and engage with your university like few other things can.

[Greg Byrne]

Along with turning a profit, Greg says the football team helps attract students.

[Kalyn DeBoer]

I grew up in Eugene, Oregon, a long ways away from Tuscaloosa, Alabama. I may have been the only student at my high school of 1200 kids that knew where Tuscaloosa, Alabama was because I was such a college sports nut.

[Adrian Ma]

And Greg points to Alabama's previous coach, Nick Saban. After a dry decade and a half, Saban brought the team to a national championship victory in 2009. And when Saban arrived, the student body.

[Kalyn DeBoer]

Was around 25,000, and we've gone to over 40,000 now.

[Greg Byrne]

So it's almost like they're a coach, but they're also a form of advertisement.

[Kalyn DeBoer]

They are. I mean, when you're the head football coach at the University of Alabama, the recognition goes throughout the country.

[Greg Byrne]

Greg is arguing that a top coach means a better football team, which means more ticket sales and also more buzz that can boost enrollment.

[Adrian Ma]

Okay, so case closed. It makes economic sense for colleges to pay top dollar for football and basketball coaches.

[Greg Byrne]

Not so fast, Adrian. Andrew Zimbalist is a sports economist at Smith College.

[Andrew Zimbalist]

Unquestionably, there are individual cases of it, Alabama or a few other cases, but the general phenomenon is, no, they don't benefit from these large salaries.

[Adrian Ma]

Andrew has run the numbers. He's looked at what happens when a new coach is brought in with a high salary.

[Andrew Zimbalist]

You know, if you're paying some coach $7 million and there's not a $7 million spike in revenue, then. Then it's not, it's not paying off for you.

[Greg Byrne]

In fact, Andrew finds that the top leagues, athletic departments, are each losing an average of $20 million or more a year. So the pricey coaches might not be paying off in terms of t. But what about increasing the school's brand?

[Andrew Zimbalist]

Basically, that evidence is not robust. Some people who look at it sometimes find a small benefit. Sometimes they find no benefit at all. Sometimes they find a negative relationship. That's not to say that it couldn't happen at a particular school. It can happen at a particular school. But does it happen as a regular process? It doesn't seem to. And therefore, 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.

[Adrian Ma]

So in general, if building up a top athletic department in a college does not make economic sense, why is it so widespread? I mean, in at least 39 states, the person with the highest salary on public payrolls is either a football coach or a basketball coach.

[Andrew Zimbalist]

The explanation is that it's an artificial market. It's not a normal business commercial market.

[Greg Byrne]

Andrew says we shouldn't think of the market for football coaches as free markets, like the market for, I don't know, sandwiches or living room furniture. And he has five reasons. First, college sports has a bunch of tax benefits. Secondly, these programs are publicly owned, meaning they don't have private shareholders demanding they turn a profit each year. Third, there are often large subsidies from the university and state governments. From fourth, the students often subsidized sports through their college tuition. And finally, until recently, college athletes didn't get paid, and so there was more funding available for the coaches salaries.

[Andrew Zimbalist]

So you don't have any of the normal discipline that happens in a typical commercial market when you move over to college sports. And for that reason, even though college coaches are being paid, it can be argued, a market salary, it's a very artificial and jiggered market.

[Adrian Ma]

Meanwhile, the college president has a lot on their plate.

[Andrew Zimbalist]

Raising money from donors, keeping the alumni happy, keeping the faculty happy, keeping the student body happy, dealing with the local town, dealing with buildings and grounds and deferred maintenance. And then there's this other thing called athletics. And athletics is part of the culture. It's something that all the alumni love and like. And rather than trying to reform college athletics and create a different set of incentives and pressures, college presidents decide simply to leave it alone. 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.

[Darian Woods]

This battle between presidents and athletic departments goes way back in American history. 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. Fast forward to today. A 2009 survey of university presidents with major football programs found that 85% felt that football and basketball coaches salaries were excessive, but they felt they couldn't control them.

[Adrian Ma]

And so let's go back to the University of Alabama, which pays nearly $11 million a year for one football coach. We did some math, and that's about $266 per college student at Alabama. And so we asked athletic director Greg Byrne whether that money was well spent.

[Greg Byrne]

Do you think the students, you know, might be wondering, what if I had a $266 discount on my tuition fees?

[Kalyn DeBoer]

Well, those are two different buckets that the revenue comes from to pay for those things. 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. So it's, I can understand the question, but it's just completely two different sets of buckets of revenue that those are being paid by.

[Adrian Ma]

In other words, Greg says students do not subsidize Alabama's football coach because the football program pays for itself. And maybe Alabama is a special case where it does pay off. But not every college can be a superstar school.

[Kalyn DeBoer]

You know, each institution has to decide what works for them. If you look at smaller colleges, let's say they've decided, many of them, that athletics is worth investing in and that it creates engagement for the university in many different facets. And they've decided that's a way to invest and market their program. But that's up to that individual institution.

[Greg Byrne]

Any other final thoughts you want to leave us with?

[Kalyn DeBoer]

Well, I hope we won the baseball game today.

[Greg Byrne]

What's the score now after the end of the interview?

[Kalyn DeBoer]

Still 2 to 1. So we're holding the line. That's right. We're in the top of the seventh now.

[Darian Woods]

And in case you're wondering, Alabama did end up winning the game. The baseball Coach earns about $900,000 a year. Peanuts.

[Adrian Ma]

What a steal. This episode was produced by Cooper Katz McKim and Corey Bridges. It was engineered by Sina Lofredo. It was fact checked by Sierra Juarez. Kick and Cannon edits the show and the indicators of production of NPR.

[NPR Host]

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[Judy Abrams]

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