"Nick Saban’s New $7 Million Contract Helps Make College Athletes’ Compensation Case For Them"
You have to hand it to the University of Alabama for having an impeccable sense of timing.
The University of Alabama’s Board of Trustees on Tuesday formally approved a new contract that will pay head football coach Nick Saban a base salary of $6.5 million per season over the next eight years, and once performance bonuses are added, Saban could make as much as $7.6 million per season. That improves a salary that already made Saban the nation’s highest paid college football coach (at least at public schools where salary information is available), and means his overall paycheck would put him among the highest paid coaches in all of American sports, professional or collegiate.
The formal approval, meanwhile, came less than a week before a trial is set to begin in a lawsuit from former players, led by ex-UCLA basketball star Ed O’Bannon, that alleges that the NCAA has violated federal law by refusing to compensate college athletes for the use of their names, images, and likenesses in broadcasts and video games, and at a time when the NCAA is facing other cases and more scrutiny about its amateurism principles than ever before. Given that a federal judge just last week denied an NCAA motion that would prohibit the plaintiffs from using coaching salaries to make the case that there is plenty of money in collegiate sports to give athletes a cut, Saban’s new contract couldn’t have come at a better time, as Sports Illustrated legal analyst Michael McCann noted Tuesday:
Saban contract extension at $6.5M/yr couldn't be timed better for O'Bannon's lawyers. They'll enjoy congratulating him in opening statement.
— Michael McCann (@McCannSportsLaw) June 3, 2014
The O’Bannon case doesn’t seek to establish full-on free market compensation for athletes as other suits against the NCAA do. Rather, it wants the athletes to share in the revenues they generate from use of their names, images, and likenesses in television broadcasts and other means. And given specific arguments both in the O’Bannon suit and in the overall argument about paying college athletes, Saban’s lofty contract goes a decent way toward making at least part of the athletes’ case for them.
One of the arguments the NCAA has made against compensating players generally is that it is financially infeasible. That is, there isn’t enough money to both compensate athletes and maintain non-revenue sports like tennis, swimming, and track and field, which are often subsidized by the money football and basketball bring athletic departments. Proponents of paying the athletes have argued that this is nonsense, and they have pointed to rising coaching salaries as one of their primary examples.
That makes sense on its face, because according to calculations from sports economist Andrew Zimbalist and business professor Allen Sack, coaching salaries at the largest Division I schools have risen 750 percent over the last two and a half decades. Zimbalist and Sack argue that these salaries “make little sense economically” — they argue, in fact, that the salaries have risen so rapidly because athletes aren’t compensated, since the money these non-profit programs generate has to go somewhere — and that it would would be easy to compensate athletes by reducing the amount paid to coaches. To that point, it’s hard to argue that Alabama couldn’t compensate athletes without affecting non-revenue sports if it can so easily find a couple extra million to hand Saban each year. In fact, it could compensate athletes simply by not giving that money to its head football coach.
Though O’Bannon’s lawyers will certainly highlight rising coaches salaries, the primary argument in that case is over whether compensating players would adversely affect competitive balance in Division I sports, particularly football and basketball. Wilken has already ruled that the plaintiffs will have to prove that paying athletes won’t have that effect, as USA Today’s Steve Berkowitz pointed out in a story about the case Tuesday night:
During the case, one of the plaintiffs’ burdens will be to show that the NCAA’s Division I schools could maintain their current competitive environment even if they have athlete-compensation rules that are less restrictive than the current ones.
The counterpoint to this is that the “current competitive environment” in Division I is already imbalanced. Small schools in the Sun Belt and the Mid-American Conference aren’t competing on a level playing field with large schools like Alabama and Texas in conferences like the SEC and Big XII, because those large schools have financial resources and national exposure that allows them to attract better coaches and build better facilities, giving them a sizable advantage in also attracting the best recruits.
And on this point, Saban’s contract is demonstrative of that imbalance. Consider this: under his new contract, Saban’s base annual pay will amount to $2 million more than the combined salaries of all 12 coaches in the Sun Belt Conference, and $1.2 million more than the combined salaries of coaches in the Midwestern Athletic Conference.
If there is already a wide gap between the competitive nature of Alabama’s football team, which consistently challenges for SEC titles and national championships, and teams in smaller D-I conferences like the Sun Belt and MAC, it’s hard to believe that giving players the ability to share in the revenues they generate would fundamentally alter that landscape. Those financial, facility, and exposure advantages will still exist even if athletes are compensated, and instead, there’s a decent case to be made, as Sports On Earth’s Patrick Hruby has argued, that altering (or abolishing) amateurism rules could instead promote slightly more competition, since the NCAA’s current redistributive structure often only exacerbates the existing imbalance.
Wilken has already made that point about coaching contracts at a pre-trial hearing in the O’Bannon case. “Maybe there’s a less restrictive alternative” than not compensating athletes, Wilken asked the NCAA. “Maybe you could enforce more competitive balance by having coaches’ salaries addressed.”
Saban’s contract, of course, doesn’t make the O’Bannon suit or any of the others challenging the NCAA on compensation grounds guaranteed winners. There are more arguments and more moving parts to the case than coaches’ salaries and competitive balance, and it’s still more than possible the NCAA will prevail in court, where it has a solid record defending itself. Even if it doesn’t win at the district level, the NCAA has pledged to fight its case all the way to the Supreme Court if it has to, so it may be years before the case is fully resolved. Still, as far as pre-trial Christmas presents go, the $7 million deal looks like a nice gift for O’Bannon and his fellow plaintiffs, and to proponents of paying college athletes in general.