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April 6, 2010 - Fired NCAA coaches are owed $79.5 million in severance payments

Bloomberg News published an article which included an analysis of severance packages to athletic coaches in the six largest NCAA Division I athletic confrences.   The article stated that $38.6 million was paid out as of the fiscal year ending June 30, 2009.  In all, more $79.5 million was paid out in the past three years combined to fire coaches and athletic administrators.

The largest severance costs were at the University of Tennessee at Knoxville ($7 million total, with $6 million owed to former football coach Phil Fulmer), at Auburn University ($6.8 million total, with $5.1 million owed to former football coach Tommy Tuberville, and the University of Nebraska at Lincoln ($6.6 million total, with $3.9 million owed to former football coach Bill Callahan and $2.7 owed to former athletic director Steve Pederson).

“Institutions are in search of the Holy Grail and they are making changes more quickly and frequently than in the past,” said Stanford University Athletic Director Bob Bowlsby.  “The only thing worse than being in the arms race is not being in the arms race, because then you won’t have the best people coaching for you.”

However, it is also more expensive to hire coaches.  The expense for coaches’ salaries, benefits and bonuses increased 22 percent the past three years, while athletic department operating revenue rose an average 11 percent, according to school records.

In some cases, athletic departments are asking boosters to subsidize part of the cost of hiring new coaches.  Between 2007 and 2009, of the 51 schools studied, donors paid $49.1 million toward coaches’ salaries, or about three percent of the $1.53 billion total, according to university records.

“There are institutions with the wherewithal to make coaching changes and weather the storm,” said NCAA interim president Jim Isch. “But there are others who just can’t, and they are going to have to decide when they hire their coaches how much they want to put their budget at risk. It’s individualized, but we are concerned.”