College Football: Over $125 Million In Buyout-Related Expenses
With college athletic departments set to lose more than $1 billion collectively due to COVID-19, do mounting buyout-related expenses make sense?
|Joseph Pompliano||Jan 4||7|
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In 2020, many college athletic departments, including Auburn, South Carolina, Texas, and Arizona, will lose more than $1 billion in revenue due to the COVID-19 pandemic — collectively furloughing or firing thousands of employees in the process.
The interesting part?
Regardless of financial losses due to the continued impact of COVID-19, this year has shown us that one thing is certain:
When it comes to college athletics, football performance reigns supreme.
What am I talking about?
Those same schools — Auburn, South Carolina, Texas, and Arizona — have fired their head football coaches after disappointing seasons.
Almost $60 million in buyout-related expenses.
Here’s a breakdown of buyout money for each head coach:
Gus Malzhan (Auburn) — $21.5 million
Will Muschamp (South Carolina) — $15.5 million
Tom Herman (Texas) — $15 million
Kevin Sumlin (Arizona) — $7.3 million
In total, we’ve seen public FBS schools commit more than $125 million in buyout-related payments this season for head coaches, assistants, and strength coaches.
Even more interesting, with a shortened offseason and schools seemingly strapped for cash, this was supposed to be a “mulligan year” for college football head coaches.
Here’s what Todd Turner, president of Collegiate Sports Associates — which assists colleges in coaching searches — told USA Today:
“We were certain there would be a limited number of changes, and they would come with retirements or guys going to the NFL, but we really didn’t anticipate people would pay multimillion-dollar buyouts in this environment.”
While some will scoff at the idea that a major public university has to fire hundreds of employees due to COVID-19 but is also willing to pay football coaches $20M+ to be unemployed in the same year, I actually think it makes perfect sense.
Sure, schools like Auburn & Texas would have loved to post winning seasons and keep their head coaches — but that’s not the reality.
This is the way I think about it…
In 2019, the University of Texas and Auburn University reported record revenue for their athletic department — more than $360 million combined.
The craziest part?
About 70% of it came solely from their football programs.
Simply put, football is the engine that makes college athletics run — especially at major public universities like Texas & Auburn.
In the end, there are thousands of intricacies that make the budgets of the college athletic department unique. Still, in a world where 70% of your revenue is generated by one sports program, you must get it right.
Not to mention, there might not be a single profitable athletic department in the country if football was excluded.
Given the need to hire right and performance to improve, it will take years to determine if they made the right decision.
If they do end up improving, the buyout money won’t even matter.
Have a great day and we’ll talk tomorrow.
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Today’s extra credit is a little off-topic, but I felt it was worth sharing after what happened last night.
ICYMI — Eagles HC Doug Pederson replaced starting QB Jalen Hurts in a three-point game early in the fourth quarter in favor of career backup Nate Sudfeld.
“I felt he deserved an opportunity to get some snaps.”
Rather than debate whether his reasoning is appropriate or not, I thought it would be interesting to share the voicemail John Madden left NY Giants HC Tom Coughlin following their effort in a “meaningless” season finale against the undefeated New England Patriots in 2007.
The Giants would end up beating New England in the Super Bowl, but I think this is a great example of what the NFL is all about.
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