UA’s bet on Saban a lesson in Football Economics 101
By Jay Reeves
Associated Press Writer
TUSCALOOSA — Don’t just count wins and losses to measure the success of Nick Saban, Alabama’s latest would-be football savior and the nation’s highest-paid college coach. Instead, add money to the equation — lots of it.
Experts and school officials say the decision to lure Saban away from the NFL with an eight-year contract worth as much as $32 million fits the business axiom of spending money to make even more.
It’s just that the initial investment is huge.
Alabama football brought in more than $44 million last year and paid the way for the rest of the athletic department with $27.7 million in profits. If Saban wins big, the Tide earns a right to share in a bowl payout estimated to grow to $2.2 billion in the next decade.
Besides that, additional exposure from football may help officials meet school president Robert Witt’s goal of boosting the university’s enrollment to 28,000 students by 2013, a nearly 40 percent boost from a decade earlier.
“The message is getting out that we offer a quality education, and that Monday through Friday our students work hard with a focus on academics,” said Mary Spiegel, head of undergraduate admissions.
“But there is also that component of Southeastern Conference athletics on the weekend: Football, basketball, gymnastics, all those things,” she said. “Can I say that Saban being here will not help recruitment? I cannot.”
A critic of escalating spending in college athletics said the Saban hire was likely more about trying to hire a “messiah coach” to restore the glory days of Alabama football under Paul “Bear” Bryant than about economics.
“Their revenues are probably maxed out at this point,” said Murray Sperber, professor emeritus at Indiana and the author of books including “Beer and Circus: How Big-Time College Sports is Crippling Undergraduate Education.”
Saban’s pay, like all athletic department money, does not come from taxpayer funds, said university spokeswoman Cathy Andreen. The department relies on game-day sales, media royalties, merchandise profits and donations to make its budget.
Despite criticism that Alabama spent too much for Saban and ratcheted up the college pay scale nationally, the hiring — even at an average $4 million annually — makes financial sense, said John Vincent, an associate professor of sport management at Alabama.
“If you have a winning season, you generate more interest and can create new revenue streams,” Vincent said. “Remember, most people’s connection to The University of Alabama is through the Crimson Tide football team.”
With its last national championship trophy 14 years old and a program that foundered under Mike Shula, the Tide’s fourth coach since 2000, leaders sought a proven winner with hopes for a big return both on the field and in the bank.
Reports filed with the U.S. Department of Education show Alabama football generated $44.2 million during the last academic year, compared to $1.8 million for all sports other than football and basketball. Football’s profit was more than double the $12.7 million cost of fielding teams in nine sports other than football and basketball.
With football leading the way, Alabama’s athletic revenues nearly doubled from a decade ago, when sports brought in $22.9 million, and they’ve jumped 25 percent just since 2001, when revenues topped $35 million.
Athletics doesn’t regularly send money to academic programs, Andreen said, but it gave $1 million for scholarships last year.
Football accounted for 65 percent of the athletic department’s total income last year.
As Shula’s team struggled to a 6-7 record this past season after a 10-win season in 2005, fans began grumbling. Boos rained through Bryant-Denny Stadium during the Tide’s loss to Mississippi State in November.
He was fired just six months after getting a contract extension and a raise to $1.55 million annually. Shula had a $4 million contract buyout.
Yet Vincent said it was clear Shula’s up-and-down years didn’t hurt profits.
“It’s an inelastic demand. People just can’t get enough,” he said.
But Sperber said Saban’s contract is hard to justify, given the low national rankings of spending for academics at Alabama’s universities and public schools.
“Within that context, the idea of paying a football coach more ... than anybody nationally is not a distinction any state should seek,” he said.
The university already has gotten some payback from Saban, who helped guarantee a sellout just by appearing at the LSU-Alabama basketball game last week.
Also, he donated $100,000 for scholarships.
Just off campus at Alabama Express, Robert Dolbare is also making some money selling crimson-colored T-shirts that say “got nick?”
“We’re getting some stickers that say ‘S — The Coach’ like ‘W — The President,’ ” Dolbare said.
“I tell you, if he wins big here he’ll be like a god.”
Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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