Ohio State Paying Football Coach $4 Million May Be a Profitable Investment

Urban Meyer’s $4 million annual salary as the new football coach may be a profitable investment for Ohio State University even if it poses ethical questions.

The Columbus-based school’s football program had an operating profit of about $18.2 million last year, behind the University of Texas’s nation-leading $70.1 million, according to Bloomberg data. Ohio State’s budget is projected to shrink 5.9 percent this year because it played one fewer home game during a 6-6 season marked by the resignation of Jim Tressel due to a memorabilia scandal involving some top players.

While Meyer’s pay may make sense, it raises questions about the role of sports in universities and the ethics of a coach making more than triple the $1.3 million earned by Gordon Gee, the school’s president, said Andrew Zimbalist, an economist at Smith College in Northampton, Massachusetts.

“If you pay him $4 million, and he generates $5 million, that’s $1 million more that you have to hire, say, art professors,” Zimbalist, the author of books including “Unpaid Professionals: Commercialism and Conflict in Big Time College Sports” said yesterday in a telephone interview. “But ethically, it’s problematic and the whole nature of the market in college sports is skewed.”

The race for revenue, which affects all levels of college sports down to the athletic-scholarship-banning Ivy League, “could lead to a permanent and untenable competition between academics and athletics,” according to a 2010 report by the Knight Commission on Intercollegiate Athletics, which has pursued college athletic reform since its founding in 1989. Networks including Walt Disney Co.’s ESPN and News Corp.’s Fox are scheduled to pay the top five conferences and Bowl Championship Series about $14 billion in television rights fees through 2032.

National Titles

Meyer led Florida to a 65-15 record over six seasons and won two national titles before stepping down in 2010, citing health concerns. The 47-year-old coach has a 104-23 record over 10 seasons at Florida, the University of Utah and Bowling Green. He won national titles with the Gators during the 2006 and 2008 seasons, with a win over Ohio State for the first championship.

Ohio State Athletic Director Gene Smith said he sees Meyer as a great coach and outstanding recruiter who can attract some of the best home-state players to Columbus.

“We wanted a football coach who understood that, who would create an environment here with the aspiration for every single football player in the state of Ohio to be a Buckeye and to come to the Ohio State University and have no other thought,” Smith said at a news conference announcing Meyer’s hiring yesterday.

Ohio Native

Meyer, who is from Ashtabula, Ohio, and went to the University of Cincinnati, signed a six-year contract that will pay him a salary of $4 million a year plus bonuses, according to a statement released by the school. That will include base compensation of $700,000 annually; $1.85 million for media, promotions and public relations; and $1.4 million in apparel, shoe and equipment payments.

The package trails Mack Brown’s $5.1 million compensation at Texas and Nick Saban’s $4.8 million pay at the University of Alabama. Les Miles, at top-ranked Louisiana State, receives about $3.8 million.

Meyer’s compensation also includes retention bonuses paid every two years, and performance bonuses based on the academic as well as athletic success of his players, including $250,000 for winning a national championship.

‘Winning, Winning, Winning’

“It’s still the win-at-all-cost mentality,” Jason Lanter, assistant professor of psychology at Pennsylvania’s Kutztown University and president of the Drake Group, a collective of professors who lobby for academic integrity in college athletics, said in a telephone interview. “It’s all about winning, winning, winning. The bonus incentives for academic progress are nowhere near the ones for going to a BCS game or the championship game.”

Football coaches’ compensation at major public universities has grown an inflation-adjusted 750 percent in the past quarter- century, according to a study by Charles Clotfelter, an economist at Duke University and the author of “Big-Time Sports in American Universities.” College professors’ salaries have grown 32 percent.

Sports Profit

Ohio State football helped the athletic department and its 36 sports post a $434,000 profit in the year ended June 30, 2010, according to a financial report filed with the National Collegiate Athletic Association and obtained from Ohio State through open-records laws. The sport anchors the conference’s Big Ten Network, which has a $2.8 billion deal with Fox through 2032. Football and basketball rights fees are worth a combined $19.3 million to the school annually, according to Knight Commission data.

The athletic department gave $1 million to the library renovation fund this year, the fifth of nine annual installments. The department also gave at least $350,000 to community programs.

Zimbalist says that’s the result of a skewed economic system.

“You have a completely artificial marketplace generating these kinds of revenue,” he said. “The players don’t get paid and because the players don’t get paid, you end up paying the coaches for the players they recruit.”

To contact the reporter on this story: Aaron Kuriloff in New York at akuriloff@bloomberg.net.

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net.

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