Here’s a story that hasn’t received nearly the attention it deserves: according to ESPN, 86 public universities in the NCAA’s top tier (the Division I Football Bowl Subdivision) spent at least $533 million from 2010 to January 31, 2021 paying coaches not to coach.
That’s more than half a billion dollars of pure waste. At public universities.
Naturally I checked to see where UC-Berkeley ranks. It’s the 16th worst offender, shelling out $11.6 million to 22 ex-coaches. Most of that went to former football honchos Jeff Tedford ($5.4 million) and Sonny Dykes ($2.7 million).
To grasp why this happens, you need to understand the financial relationship between public universities and their Intercollegiate Athletics departments. At most publics, including UC-Berkeley, Athletics is an “auxiliary enterprise,” an ostensibly self-supporting arm of campus that provides non-instructional goods or services to students, faculty, and staff. Auxiliary enterprises typically finance themselves via user fees; for instance, housing offices cover expenses through rent they charge dormitory residents. But Intercollegiate Athletics departments don’t have much worth buying — except access to football and men’s basketball games, which is in huge demand, especially from network and cable television. Called “revenue sports,” football and men’s basketball are expected to cover their own costs plus the costs of “Olympic sports” (all the other teams, which seldom pay their way), facility construction and maintenance, scholarships, travel, and staff needed to keep hundreds of student-athletes going.
Football and men’s basketball coaches use that leverage to command outrageous compensation. (Coaches in other sports do much less well.) In the UC system, which includes Nobel Prize winners, transplant surgeons, and legendary risk managers (🤣), the four highest-paid employees in 2020 were current UCLA football coach Chip Kelly, current UCLA basketball coach Mick Cronin, current UC-Berkeley football coach Justin Wilcox, and former UCLA football coach Jim Mora. All made at least $3 million. Compare that to UC-Berkeley economics professor David Card, who won a Nobel Prize last month: he earned $413,477. Very nice, but he’d have done better had he devoted his career to the study of safety blitzes and onside kicks.
Knowing that if they stumble their university will lose faith in them, coaches demand — and get — contracts that discourage early termination. For example, Tedford’s multi-year deal, which is almost certainly standard, granted UC-Berkeley the right to terminate his employment early on condition the campus continued to pay what he was owed for the entire contract. He was obligated to seek other employment, and UCB was entitled to reduce his payout by whatever he earned in his new post, but what constitutes a good-faith effort to find another job? I don’t know any universities eager to draw attention to a bad contract by suing an ex-coach for spending the duration of its term on a worldwide cruise. (A little more than a year after he was fired, Tedford became offensive coordinator for the NFL’s Tampa Bay Buccaneers.)
Excessive reliance on football and men’s basketball has proven ruinous for Intercollegiate Athletics at public universities. The financial model isn’t self-supporting at all; most programs don’t break even. Many run chronic multi-million dollar deficits, including the one at UCB. After years of subsidies from discretionary funds, in 2017 chancellor Carol Christ formalized a transfer of construction debt from the Athletics department to central campus, compromising the campus’s budgetary flexibility.
My former employer should be developing a more viable financial model for Intercollegiate Athletics, not fruitlessly competing with the likes of Auburn and Nebraska for the distinction of paying ex-coaches the most to do nothing. If Professor Card is too busy, maybe Janet Yellen, the emerita Haas School of Business professor serving as Secretary of the Treasury, has time — or maybe they can recommend any number of faculty across the system (even at UCLA, the tenth-worst offender at $15.5 million in zombie coaching contracts) with more than enough expertise and motivation to devise a solution.