Jim Harbaugh is being introduced as the University of Michigan’s new head football coach today. Harbaugh has signed a contract worth a reported $48 million over six years. It’s unclear whether that figure, if accurate, includes potential bonus payments for winning conference and national titles, curing cancer etc., or merely represents his base pay (Some reports suggest that bonus incentives could potentially push Harbaugh’s compensation closer to ten million dollars per year).
Update: The terms of Harbaugh’s contract are apparently somewhat fluid. He will be paid $7 million this year, which includes a $2 million signing bonus. After this year the AD will make a determination about appropriate deferred compensation and the like. The contract also includes unspecified performance bonuses. The minimum value of the contract, with no performance bonuses or deferred compensation, is $40.1 million over seven years. (This looks like a pretty slick move by Michigan’s AD Jim Hackett. By leaving deferred comp out of the original contract he holds down the up front annual salary number, and the potential backlash. Next year at this time they could up the total value of the contract to $8 million per year and it’s a small story, even locally).
Since it will take a few weeks to FOIA the documents let’s assume for now that his compensation will be $8 million per year.
Now on one hand this is obviously deplorable. Current average salaries at the University of Michigan outside the athletic department (which, unlike almost all college athletic departments in the USA is actually self-funded) look like this:
Administrative poohbahs (president, deans etc.): Several hundred thousand dollars per year
Full professors: $167,000
Associate professors: $114,000
Assistant professors: $101,000
People who make the wheels go round (clerical staff, food service workers, janitors etc): $20,000-$40,000 generally.
Adjunct instructors, aka the people who do the majority of the actual teaching at the institution: A petrified starfish and a bowl of potpourri (parking passes may be provided on a case by case basis).
You can look up salary data at the school here.
So Jim Harbaugh is going to get paid as much per year as 70 University of Michigan professors, or 250 clerical employees, or a nearly infinite number of adjuncts. This seems . . . disturbing.
On the other hand, hiring him is quite likely going to end up being a big net positive for the coffers of the athletic department and even the university generally, so let’s hear it for “the market.” (For example, real estate developer and Miami Dolphins owner Steve Ross is a big Michigan football fan, and he’s expressed his affection for the program and the school by giving $100 million to the AD and another $100 million to the business school. He’s also rumored to be picking up part of Harbaugh’s compensation package).
On a yet a third hand, the university can pay Harbaugh more than any other football coach in the known universe and still make a tidy profit on the deal only because college football in America is a multi-billion dollar industry that doesn’t really pay its primary labor force (in this regard, big-time football reflects the economic structure of the contemporary universities which host it).
So — how did we get here?
Something to keep in mind is that big-time college football has been an extremely popular sport in America for more than a century (Indeed, until the 1960s it was more popular than the NFL). And debates about the exploitative economic structure of the game are nearly as old: I recently found a book published by Princeton and Michigan coach Fritz Crisler in 1934, and re-issued in 1948, in which Crisler addresses the apparently lively debate at the time regarding whether college football players should be paid overt wages, since, according to him, many were being paid covertly back in that simpler more innocent time (On an unrelated but fascinating side note, F. Scott Fitzgerald’s habit of regaling Crisler with alcohol-fueled late night phone calls featuring Fitzgerald’s creative ideas for helping the Princeton football team may actually have inspired the genesis of modern two-platoon football).
Therefore big-time college football coaches have been very well paid, relatively speaking, for a very long time. But “relatively” is the key term here: (All dollar figures below are in constant 2014 dollars).
Woody Hayes, Ohio State, 1951: $113,534. Hayes was a 38-year-old first-year coach at football-crazed OSU in 1951, and his salary represented a whole lot of money back then. He was making 63% more than what was then the 95th percentile of family income, which means the hard-charging young coach was in at least the 98th and probably the 99th percentile of income in the country at the time (63% more than the 95th percentile of household income today puts a household well into the 98th percentile, and household income distribution was a good deal flatter during the socialist regimes of Presidents Truman and Eisenhower).
Bear Bryant, Alabama, 1958 (Bryant had just become Alabama’s athletic director as well as its football coach): $142,998. Bryant remained Alabama’s coach until 1982. He is reputed to have insisted throughout his career that his salary should always be at least one dollar less than that of the university’s president.
Hayden Fry, Southern Methodist, 1962: $101,654. Fry was Arkansas’ offensive coordinator when he took a phone call from Lamar Hunt, of the Dallas Hunt brothers, during warmups for the 1962 Orange Bowl, offering Fry the SMU job. He accepted without asking about the salary, and later discovered he was taking a pay cut from what he had been getting as the Razorbacks’ OC (Fry, by the way, played an important and courageous role in integrating college football in the south).
Bo Schembechler, Michigan, 1969: $135,127. Schembechler in 1969 was almost the same coach as Hayes had been 1951 (One year older, in his first season, coming, as Hayes had, from Miami of Ohio). His salary was only 15% higher than Hayes’ had been, despite the enormous increase in national wealth over the intervening 18 years (GDP exactly doubled in constant dollars over this time).
College football coaching salaries began to increase rapidly in the 1970s. TV money was beginning to pour into the game, although it was still a trickle relative to what it would become. A major change in the compensation structure for coaches took hold in this decade, which is that universities began to divide that compensation into an official university salary, and another sum, with the latter representing pay for ancillary activities, such as hosting a television show, putatively running a football camp associated with the school, and so forth.
So for example by 1981, Schembechler, who had the highest winning percentage of any coach during the 1970s, was being paid a little more than $155,000 in university salary and $130,000 for other contractual obligations, making his total compensation $285,771 (again in 2014 dollars).
Then in January 1982, Texas A&M, awash in oil money and eager to challenge the University of Texas for football supremacy in the Lone Star State, stunned the college football world by offering Schembechler the then-staggering sum of $250,000 per year in 1982 dollars, which would have more than doubled his salary. (This was equivalent to $611,790 in 2014 dollars).
Schembechler turned TAMU down (Domino’s Pizza king Tom Monaghan gave him a Columbus, Ohio franchise), but Pittsburgh coach Jackie Sherrill didn’t, inspiring this amusingly quaint article in the New York Times, which wrestles with the incredible proposition that any employee of a university could be paid a quarter million dollars per year. (Of course today even some non-sports-related university employees make millions).
From there it was off to the races. Nominal coaching salary milestones, with inflation adjustments:
Bobby Bowden: Florida State 1996: $1,000,000 ( $1,505,105 2014$)
Steve Spurrier: Florida 2001: $2,100,000 ($2,800,209 2014$)
Bob Stoops: Oklahoma 2006: $3,000,000 ($3,154,152 2014$)
Nick Saban: Alabama 2007: $4,000,000 ($4,555,777 2014$)
Nick Saban: Alabama 2014: $7,000,000
And now we apparently have an eight to ten million dollar man (I should add that as a Michigan football fan I heartily approve of this particular development, while sincerely deploring the overall system that has brought it about).
A potential irony in all this is that the entertainment industry in general, and sports in particular, is one of the very few areas of the economy where it may actually be possible to to construct an efficiency-regarding justification for gargantuan salaries (In the context of college sports, of course, this ignores the grotesque spectacle of the players receiving salaries of zero). It’s a whole lot easier to explain why it makes sense to pay Tom Brady $15 million per year than it is to make a similar argument for why last year a couple of dozen hedge fund managers should have pulled down average compensation packages 60 times larger than that.
Of course efficiency is one thing — and let’s not forget the little detail that Harbaugh’s players won’t be paid anything for their part in this multi-billion dollar annual extravaganza — and justice is another. I suggest it is or ought to be a basic tenet of any even vaguely left or progressive political perspective that any social system in which some people have salaries hundreds — let alone thousands and tens of thousands — of times larger than those of other people* is in need of basic reform.
*Let alone people in the same institution, let alone people in the same non-profit tax-supported educational institution!