A Decade of Growth
One price of OSU winning: higher salaries for coaches
An 'arms race' for the top football and basketball coaches pushes up pay for all
Monday, April 13, 2009 3:08 AM
By Bill Bush
The Columbus Dispatch
Gary Avedikian took a $13,000 pay cut from his high-school teaching and coaching job in Centerville to become Ohio State University men's soccer coach in 1987. His salary at the university: about $20,000 a year.
When he left in 1997, he was making $40,800.
"I never worked harder, longer, for less money than when I was working at OSU," said Avedikian, 68, who is retired and lives in Worthington.
He left too early. The coach who replaced him, John Bluem, made almost double Avedikian's pay his first year. By last year, he was making about $156,000.
In the decade following 1998, salaries for some coaches and department administrators doubled and, for others, tripled, in inflation-adjusted terms. The pay raises were funded not by tax dollars, but largely by revenue surpluses in the football and men's basketball programs.
Names such as Jim Tressel and Thad Matta might come to mind when you think of increasing salaries for coaches, but you could just as easily throw in the names of Bluem, Joe Breschi, Linda Kalafatis, Bob Todd, Anne Wilkinson and many other lower-profile coaches and assistant coaches.
All have benefited from the rising tide of college sports pay.
"The market has changed," Athletics Director Gene Smith said. "Your ability to recruit top talent is based upon your ability to pay the top quarter in your salary range."
That's where Ohio State aims to be.
The university gets more than just wins from the transaction. Coaches and staff members help improve graduation rates, improve student behavior and contribute their time and money to local charities and civic efforts, Smith said.
"We get outstanding leadership for the student-athletes that our coaches oversee, and we also are able to retain coaches who really understand the big picture," he said. "Our coaches do more than coach."
But Smith doesn't dispute that winning defines success.
"That's what we do," Smith said. "We want to win every contest."
Sports-marketing expert Dennis Howard said an "arms race" to recruit football and men's basketball coaches has driven up coaches' pay across the board.
"I think that's what has given cover to athletics programs to be able to do this. It really has percolated down and is having an impact on increasing salaries for coaches at every other level," said Howard, dean of the University of Oregon's business college and former director of the sports-management program at Ohio State.
A $115 million operation
Smith's wood-paneled office in the corner of St. John Arena -- just big enough for a desk, a small conference table, a few odds and ends -- looks like a relic from a simpler day of Ohio State sports.
With its view overlooking a parking lot, it is one of the few things that hasn't changed with the Athletics Department in the past decade.
From it, Smith runs a $115 million-a-year sports empire.
The department employed 317 people last year, almost 100 more people than a decade before and a 43 percent increase. Its payroll has grown from $10.6 million in 1998 to $25.4 million. After adjusting for inflation, that's a 79 percent increase.
The department's entire budget in 1998 was about $50 million, accounting for inflation.
At $675,000, Smith's total pay last year is more than double the nearly $312,000 (in inflation-adjusted dollars) that then-Athletics Director Andy Geiger made in 1998.
Under a contract Smith signed late last year, he is guaranteed a base salary of $648,000 and could make $200,000 more, depending on bonuses dealing with team records, academics and how long Smith stays with the university. The new contract was signed after Smith's name surfaced as a candidate to run Notre Dame's athletics program.
The average pay for an athletics director in the Big Ten is $473,000, and a quarter of them make more than $551,000, according to data Ohio State has collected to compare salaries.
The university spent $5 million last year just for its three highest-paid head coaches -- Tressel (football), Matta (men's basketball) and Jim Foster (women's basketball). That's 2.5 times the price tag in 1998, after adjusting for inflation, for those sports.
While getting nowhere close to those deals, other coaches whom you've probably never seen on TV have enjoyed much more generous pay than their predecessors in 1998.
Along the way, the university has changed coaches' compensation packages to put more emphasis on performance-based bonuses and other sources of revenue, such as camps. In 1998, about 58 percent of coaches' pay was from base salary, but that number fell to about 52 percent by last year.
Here is how some coaches fared during the period (1998 numbers have been adjusted for inflation):
• Breschi, the men's lacrosse coach until he left the university last year, made the equivalent of $63,100 in 1998. Last year, Breschi made $232,500, fueled largely by a camp that pushed his bonus to almost $140,000. Overall, his pay increased 268 percent over the decade. Nationally, the average total pay for a lacrosse coach is about $197,000.
• Todd, the men's baseball coach, made almost $331,000 last year, up 114 percent. The average Big Ten baseball coach makes less than half that.
• Men's ice hockey coach John Markell made $227,500 last year, 102 percent more. But that was still much less than the average salary of about $365,000 paid to Big Ten ice hockey coaches.
• At almost $105,000, Wilkinson, coach of the women's field hockey team, made 44 percent more than the position paid a decade before. The Big Ten average was $92,500.
• Women's softball coach Linda Kalafatis made just under $100,000, up 51 percent. The Big Ten average is about $111,000.
• Andrew Teitelbaum, head rowing coach, made $91,400, up 54 percent. The Big Ten average: $79,100.
'A monopoly position'
The Athletics Department is entirely self-supporting. It produces enough money through ticket sales, television revenue, concessions and other sources to pay for its 36 sports programs, plus donate money to other university causes, such as $9 million toward the Main Library renovation.
Ohio State has cashed in by "leveraging a monopoly position" in Buckeyes football, which is the "pre-eminent sports franchise in Columbus," said Howard, the sports-marketing expert. And fans seem more than willing to pay the price.
"The fact is, this can all be managed without state support or subsidy," Howard said. "Athletics departments have been given pretty much a free hand in managing their affairs if they can balance the books."
In 2008, football netted about $26 million and men's basketball $9 million, helping to justify hefty coaching pay:
• In 1998, football coach John Cooper made the inflation-adjusted equivalent of $896,300. Last year, the university paid Tressel $2.5 million. That's almost $1 million more than the average Big Ten football coach. And that's already dated: Tressel signed a new contract last year that would pay him around $3.5 million a year, meaning his salary has almost quadrupled since he came to OSU in 2001.
When the contract was announced last year, Smith said that Tressel was No. 5 among the nation's top-paid coaches.
• Matta, the men's basketball coach, made $1.8 million last year, over $1 million more than Jim O'Brien did in 1998, after inflation. Matta makes $400,000 more than the average Big Ten basketball coach, according to the university. When his contract was extended in 2007, Matta trailed only Michigan State's Tom Izzo in Big Ten coaches pay.
Despite the common complaint that TV cash is corrupting college sports, it provided a minor part of the revenue last year: $2.9 million for football and $3.5 million for basketball.
The big money came from ticket sales, which raised about $38 million last year from football and men's basketball alone -- not counting ticket-handling fees that raised almost another $1 million.
Unlike with most of the university's sports, paying top dollar for a successful football and men's basketball program delivers a return on investment.
"It's a no-brainer," Smith said.
Other sports delivered bigger salaries, but not bigger profits.
Foster, the women's basketball coach, made $789,350 -- nearly rivaling what Cooper pulled in a decade ago -- and more than double what former coach Mary Burns made in 1998 (an inflation-adjusted $372,000). Foster makes almost double the average pay for Big Ten women's basketball coaches.
In fact, Foster made $130,000 more than the total projected revenue from OSU women's basketball last year. Three assistant coaches and a director of operations cost the women's team another $393,000 in salary last year.
The same dynamic was true in other sports. Todd's $331,000 pay was more than triple the ticket revenue for baseball. Lacrosse tickets raised about $8,000 and soccer tickets about $9,000, a fraction of what their coaches made.
One way the university affords these salaries is through camps.
When Avedikian was soccer coach, he could keep no more than 20 percent of the revenue he generated for the university from his summer youth soccer camps, he said. Today, the camps are used to boost coaches' salaries, Smith said.
For example, much of Breschi's $140,000 bonus last year came from OSU-sponsored lacrosse camps. Breschi was the only coach whose camp income -- $125,000 -- exceeded his salary, according to the department.
The University of North Carolina now pays Breschi a base salary of $120,000 and gave him ownership of his lacrosse camp, unlike the Ohio State system. (His base salary at Ohio State last year was $85,400.)
An uncertain future
The salary increases are not really surprising, Smith said.
"We could all see it coming," as universities nationwide began demonstrating their resolve to pay the price to have winning teams, he said. "Ten years ago, I could see us here."
What do the next 10 years hold?
Howard doesn't think that salaries can continue to go up at anything near the rate of the preceding decade, because if ticket prices go much higher, the average sports fan might just find something else to do.
"So much of this is dependent on the economy," Howard said. "Will folks in Ohio -- who are obviously very dedicated, loyal fans -- be able to support the program?"
Smith expects salaries to begin to level out, possibly not as quickly in football and men's basketball as in other sports. TV and the Internet will become more important sources of cash. For example, football television revenue tripled for this school year, to $9.3 million, mostly because of a deal with the Big Ten Network.
"At the end of the day, sports is so embedded in our society that as long as you do it right, people are going to respond," Smith said. "At the end of the day, television needs inventory. We provide inventory."