Student Fees May Be Subsidizing Football Coach Buyouts

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. There is, after all, a long history of paying coaches to go away over multiple years (remember Notre Dame’s Charlie Weis?).

Another assumption that is often 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.

The two Big Ten schools (Nebraska and Wisconsin) have the most amount of media income in this example (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 receive no student fees-a distinct difference from the others.

Pay attention to ‘other’ revenue sources

The three remaining programs fare much less favorably-the ACC’s Georgia Tech receives $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. One might wonder what the 74,878 ASU students might think when they learn that up to 83% of their annual fees in 2022 may go towards former head coach Herm Edwards’ buyout. Each student is required to pay $150 a year.

For further clarification, the Sun Devils have 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.”

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 that 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”), as both were fired at the same time.

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 to cover these costs. 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; 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 and/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.