Jan. 9 (Bloomberg) -- Louisiana State University football coach Les Miles has $5.7 million riding on tonight’s Bowl Championship Series title game.
A victory over the University of Alabama triggers a clause in his contract that increases his annual pay by that much over the remaining six years of the deal.
The potential raise comes when colleges are trying to rein in sports program expenses. Head football coaches’ salaries increased 11.7 percent in the fiscal year ended June 30, exceeding the 5.7 percent gain in total revenue at top-tier athletic departments during the same period, according to a report by the National Collegiate Athletic Association.
“This will definitely perpetuate the irrational upward cycle in coaches’ salaries,” said Andrew Zimbalist, a sports economist at Smith College in Northampton, Massachusetts. “It wouldn’t be so bad if it was symmetrical; if you ended with the worst record, then your contract says you get $1,000 less than the lowest-paid coach in the conference. But they only go up.”
Miles earned $3.75 million this year in salary, plus bonuses of $200,000 for winning the Southeastern Conference championship and $200,000 when the Tigers qualified for a Bowl Championship Series game. A victory in the national title game pays an additional bonus of $100,000.
Even bigger money comes from a clause in his contract that requires him to be paid at least $1,000 more in total salary than the highest-paid coach working at a public university in the Southeastern Conference if he wins the national title.
Saban Highest Paid
The highest-paid coach is tonight’s opponent, Alabama’s Nick Saban, who receives $4.7 million in salary and could earn a $400,000 bonus if the Crimson Tide win tonight’s game at the Superdome in New Orleans, about 80 miles southeast of LSU’s campus in Baton Rouge, Louisiana.
A call to Saban’s agent, Jimmy Sexton, wasn’t returned. Miles’s agent, George Bass, said he wasn’t comfortable talking about his client’s contract.
LSU Chancellor Mike Martin didn’t respond to a request for an interview. University of Alabama spokeswoman Deborah Lane said President Robert E. Witt wasn’t available for comment.
The average head coach salary among the 120 schools in college athletics’ top division was $1.38 million in 2010. The combined average salary for the rest of the football coaching staff was $1.97 million, according to an NCAA report published in August.
Though athletic directors say rising coach salaries are a result of the free market, Zimbalist says the system is rigged.
“It’s all being fed off the fact that the athletes aren’t being paid, most schools live off of university and state subsidies, they all get tax privileges and they live in a world where there are no stockholders saying they want to see a profit on the bottom line,” Zimbalist said in an interview.
LSU’s Operating Profit
Few schools are as capable of paying the salary increase as LSU. The Tigers’ athletic program posted operating revenue of $111 million and an operating profit of $8.7 million for the year ending June 30, 2010, according to financial records acquired by filing open records requests with the university.
The school’s athletic department is one of 22 in college sports’ top division that posted an operating profit, and it receives no subsidy from the university. Its football team was the fifth-most successful program in the country, posting an operating profit of $43.9 million on revenue of $69.4 million.
LSU’s football program trailed Texas ($70.1 million operating profit on $93.9 million revenue), Georgia ($52.5 million, $71 million), Michigan ($44.9 million, $63.1 million) and Florida ($44.3 million, $68.9 million).
LSU finished No. 1 in the BCS standings with a 13-0 record, while Alabama finished No. 2 with an 11-1 record. The Crimson Tide’s only loss this season was a 9-6 overtime defeat to LSU in November.
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