It’s Time to Cap NCAA Coaching Salaries—How and Why

Supreme Court Justice Felix Frankfurter said “there is no greater inequality than the equal treatment of unequals.” 

That’s NCAA Division football, in a nutshell. The schools adhere to a rule book as thick as the Bible, all to create rules of equal and fair play. But every year, the rich get richer—and they do it by breaking the bank to pay for football coaches. The latest example is Texas A&M’s hiring of Jimbo Fisher for $75 million (see his arrival above). By any standard—except NCAA Division I football— that is an obscene amount of money for a university employee.

Here at Illinois, our coach received a record contract, by university standards; yet in 2017, Lovie Smith’s contract ranks 39^th in the nation for annual pay (paying $3 million this year).

There is a better way: The NCAA should set a salary cap on coaching salaries in football.

If that sounds like an unfair rigging of the market, it’s not. The NFL caps player salaries at approximately 50% of total league revenues. That’s spreading a lot of money over 53 players. It's legal because sports leagues are permitted by courts to impose anti-competitive rules in order to make their teams more balanced and competitive.

For the sake of simplicity, let’s say that the NCAA capped Division I at 10% of annual football revenues.

To put this in perspective, Texas A&M had the highest level of football revenue over a recent three year average-- $58 million per year. At Rank 25, UCLA averaged $38 million per year. 

Let’s just say that premiere football programs average about $40 million per year—and let’s set a 10% cap on head coach salaries, at $4 million per year.

The top 20 football salaries for 2017 paid over the $4 million threshold.

What would a salary cap achieve?

First, it would reorder the coaching salary market by constraining its out-of-control trajectory. We’re talking a hard cap in this proposal. Just as free agency in football—combined with a salary cap— leads to labor market mobility that often flows from championship teams to weaker teams, the best teams would retain some coaches but others would lose their talented employees.

Good coaches would be incentivized to explore schools with more cap space. Oklahoma’s Lincoln Riley would re-sign at $4 million (he’s at half that amount), or find a new school. A more likely scenario is that Larry Fedora—paid about $2.2 million at UNC—would move for a better contract.
Second, some college coaches would move to the NFL. If Nick Saban left for the NFL (again), every SEC football school would be thrilled. Currently, he's about $7 million above my cap-- so, he'd be movable. The point is that the SEC would become more competitive.
Third—and foremost— strained athletic department budgets would be shielded from a vicious cycle of spending on football head coaches. Money could be spread to fund more student scholarships. 

And that’s the point of the NCAA, isn’t it—to promote the interests of student athletes? But to judge from coaching salaries, this group might be better known as the NCCA-- the National Collegiate Coach’s Association.