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Student Fees May Be Subsidizing Football Coach Buyouts

TEMPE, AZ – SEPTEMBER 17: Arizona State Sun Devils head coach Herm Edwards runs off the field with … [+] his team before the college football game between the Eastern Michigan Eagles and the Arizona State Sun Devils on September 17, 2022 at Sun Devil Stadium in Tempe, Arizona. (Photo by Kevin Abele/Icon Sportswire via Getty Images)

Icon Sportswire via Getty Images

The firings of five Power 5 head football coaches over the last three weeks has stunned the industry. Depending on the actual buyout amounts for each coach, the total could approach $60 million.

We are not even halfway into the 2022 football season.

Most college football fans and insiders assume these expensive buyouts are due to the exploding media contracts the Big Ten and the SEC are enjoying. But there is a long history of paying coaches to go away over multiple years (remember Notre Dame’s Charlie Weis?).

Another assumption that gets consistently mentioned is that a donor or a group of donors will just write a check to buy out the coach. That does happen-just not as often as you’d think. So where does the money come from? Financials listed in the chart below show a few important clues for the five schools recently in the headlines.

Not surprisingly, the two Big Ten schools (Nebraska and Wisconsin) with the most amount of media income (about $55 million a year), also show the largest annual donations from supporters-Wisconsin received over $28 million and Nebraska almost $23 million in 2020-21. They also receive no student fees-a distinct difference from the others.

Pay attention to ‘other’ revenue sources

The remaining three programs fare much less favorably-the ACC’s Georgia Tech receives only $7.7 million a year from boosters, while the two Pac-12 schools receive $7.9 million (ASU) and $3.9 million (Colorado). Factor in the annual media revenues distributed to these conferences-$31 million for the ACC and the Pac-12’s $34.4 million (before the loss of UCLA and USC), and they appear to be swimming in shark infested waters.

Notably, these three schools take in a total of $17.74 million in student fees every year, with Arizona State taking in the most. I wonder what the 74,878 ASU students might think when they learn that as much as 83% of their annual fees in 2022 may go towards former head coach Herm Edwards’ buyout. Each student pays $150 a year.

For further clarification, the Sun Devils has this on their website:

“Students pay $75.00 per semester for the Student Athletic Fee which supplements and supports the operations of Sun Devil Athletics, in exchange for a reinvestment of university funds into student identified priorities. Through the establishment of this fee, the tuition dollars traditionally allocated to Sun Devil Athletics will be reinvested into the university system in order to grant additional resources and services as identified by the Associated Students of Arizona State University, thereby establishing students as effective stakeholders in both Sun Devil Athletics and the university system, and furthering transparency between the university and the Associated Students of Arizona State University over tuition dollars.”

ATLANTA – NOVEMBER 24: A cheerleader waves the Georgia Tech flag during the game against the Georgia … [+] Bulldogs on November 24, 2007 at Bobby Dodd Stadium at Historic Grant Field in Atlanta, Georgia. Georgia defeated Georgia Tech 31-17. (Photo by Mike Zarrilli/Getty Images)

Getty Images

Georgia Tech requires payment of all student fees upfront for each of their 26,839 students. Their athletic fee is $127 per semester per student.

On the Ramblin’ Wrecks’ webpage:

“Mandatory student fees are considered part of the registration process and must be paid in full for the student to be considered enrolled. The Activity Fee, Athletic Fee, CRC Operations Fee, Campus Center Facility Fee, Health Fee, Recreation Facility Fee, Student Campus Center Operations Fee, Special Institutional Fee, Technology Fee, and Transportation Fee are mandatory student fees used to provide cultural, social, and athletic programs for the entire student body.”

The University of Colorado charges $28.50 per semester for all 33,246 undergraduate students.

Who can really afford to fire a head coach midseason?

Many of these schools had previously negotiated contracts to allow for greater flexibility in terminating them; meanwhile, coaches want to sign contracts that give them more guaranteed money, whether they fulfill their contracts or not. In this case, Georgia Tech will have to hire a new football coach and a new Athletics Director to replace Todd Stansbury (reports are his buyout isn’t considered “prohibitive”).

Of course, athletic departments can (and do) borrow money via intra-campus loans, take a loan against future media revenues, or even restructure other debt payments. It’s not uncommon to have multiple coaching staffs on the payroll at the same time.

In reality, the only conferences that can truly afford to fire a head football coach midseason are the Big Ten and the SEC: and even for some schools in those groups, that could be a stretch. The rest are either looking towards extending their credit lines or asking their students or donors to pony up.

At this level of Division I football, student fees should not be part of the equation. For institutions who chose to play in the sandbox with other FBS programs, it is a no win situation, except, of course, for the fired coaches, who are laughing all the way to the bank.

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