Your Tax Dollars Are Paying These College Coaches Millions

When The Wall Street Journal reported earlier this month that the average CEO of a publicly traded American company earns $10 million a year, did that number make you mad?

Madder than when you heard that the average member of Congress is taking home $174,000 a year, and drawing a $64,000 pension once out of office?

Well, here are a few numbers that might make you a bit less mad than the first story, and a bit more angry than the second:

  • On his first day of work, new University of Wisconsin basketball head coach Gary Andersen will begin receiving paychecks adding up to $1.8 million a year.
  • Michigan State University head coach Tom Izzo is pulling down $3.7 million.
  • And University of Kansas coach Bill Self and University of Louisville's Rick Pitino -- both get just under $5 million.

The most surprising fact of all: Because all of these schools are public universities, all of these head coaches are actually public employees. Therefore your tax dollars are going to pay their salaries.

The Gang of 40
This is hardly uncommon, either.

In a posting on last month, author Reuben Fischer-Baum laid out the numbers and showed how most of America's 50 states pay their state schools' head coaches more generously than literally any other employee on the taxpayer payroll.

In 13 of the 50 states (including Michigan, Kansas, Kentucky, California, Florida, and North Carolina, among others), basketball head coaches pull down more total compensation than any other state employee. In 27 more states, it's the head coaches for football programs that claim the top-earner prize. In New Hampshire, the biggest paycheck goes to a hockey coach.

That all adds up to 80 percent of the states in the union paying their top coach more than their school superintendent, more than their police commissioner, more than the chief of surgery at their flagship hospital system -- and more than their governor.

Fair's fair... but is this fair?
Now admittedly, there are caveats to all of this.

For one thing, the skills attendant on rising to the position of head coach do deserve some compensation. It's a free market, after all, and coaches should be able to charge whatever the customer will pay for their services.

And yet, inherent in that statement is the understanding that the customer knows what he's paying. Take my home state of Indiana, for example. According to public records, our highest-paid executive branch employee out here is new governor Mike Pence, who earns a relatively modest income of $111,687, well below the average paycheck for governors in the U.S.

But imagine my surprise when, upon further research, I discovered that in Indiana the highest-paid state employee, period, is Indiana University basketball coach Tom Crean.

Crean's name doesn't even show up in a search of "salary information for employees and elected officials of the State of Indiana" on the state government's website. And yet the man is expected to rake in total compensation of $3.16 million this year -- and that's a 25 percent pay raise over what he earned last year.

What price success?
Is three-point-something-something million dollars too much to pay for a coach who's racked up a 56-and-16 record over the past two years, and led his team in back-to-back Sweet 16 appearances? I don't know. What I do know is that in choosing to pay Crean $3.16 million, IU in effect decided -- on behalf of Indiana taxpayers -- that $3.16 million is better spent buying itself a winning basketball coach than on, for example...

  • Providing full-ride tuition-and-fee scholarships to 315 worthy college students.
  • Reducing the tuition and fees of every student at IU-Bloomington by $75.
  • Sending every taxpayer in the state a $0.48 income tax refund.

It takes a village to raise a... coach's salary this much
Defenders of high salaries for successful state school coaches will argue that coach compensation doesn't really come from taxpayers, of course.

As even the author of the Deadspin article admits, a large portion of a coach's total compensation comes in the form of bonuses and fees tied to coaches making media appearances, derived from sports apparel contracts, and from fundraising. Still more of the overall athletics budget is paid for by television contracts, etc., etc., and so on and so on.

And yet, where would all of this money come from -- what endorsement deals would there be, what television fees would be collected -- if there were no taxpayer-funded university for the coach's team to play at?

It all starts with the taxpayers. And the taxpayers deserve a clearer picture of where their tax dollars are being spent -- and on whom.

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Read/Post Comments (7) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 15, 2013, at 12:22 PM, Podunksunshine wrote:

    Apples and oranges, the coaches are paid out of the athletic department budget, not the university general fund. That money comes from athletic department donations, ticket and concessions and donors.

  • Report this Comment On June 15, 2013, at 1:48 PM, charlesrmay wrote:

    Not sure if I agree with the author's point of view. My view has always been that college coaches' salaries are paid for by ticket sales, boosters, sales of merchandise, etc. I'm pretty sure the football program at my alma mater brings in far more money than it spends which would ultimately benefit all students and faculty. Plus a big name college football or basketball program is a great overall marketing tool for a major university that provides financial and non-financial benefits that are signifiant but difficult to quantify.

  • Report this Comment On June 15, 2013, at 2:28 PM, SmartFool2001 wrote:

    My tax dollars aren't paying a dime towards the athletic is the cash cow, with basketball, (men's, and in some cases women's), completing 95% + of the athletic department's budget.

    Don't kid yourself, this is BIG business, the athletic department are contributing a lot more money to the institutions than vice versa.

  • Report this Comment On June 15, 2013, at 3:25 PM, TMFDitty wrote:

    While thanking all for the feedback ... the studies do tend to disagree with you. Specific figures vary, but the average college athletics program does appear to spend more than it takes in:

    The average net deficit per school looks to be on the order of $10 million.

  • Report this Comment On June 15, 2013, at 3:39 PM, badgrrr wrote:

    Poorly written article. Not sure why I read it, except for the comment regarding Wisconsin, where I live. I guess it is OK if you refer to the University of Wisconsin as a publicly supported school, and Gary Anderson is a coach at the University of Wisconsin. However, Gary Anderson is the football coach (not basketball as stated), and no public dollars are used for athletics at the University of Wisconsin.

    Are there any editors or someone who proofs these articles? Really?

  • Report this Comment On June 15, 2013, at 4:40 PM, mike28584 wrote:

    Just like most of the articles of the 24/7 news media, they put it out there before checking out the sources.

  • Report this Comment On June 16, 2013, at 11:47 AM, joeyvangel wrote:

    Most NCAA Div I Athletic Departments are registered 501(c)3 charities. The point everyone seems to be missing is if Publicly funded universities and states banded together and capped salaries, there is no where for these people to go. Private universities would hire maybe 6, the pros would hire about a dozen the rest would have to stay at the collegiate level with a capped salary.

    The Athletic Departments could then contribute to the general fund and education would become cheaper.

    Universities are supposed to be about education.

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