Ron Zook was fired as the football coach at Illinois after the 2011 season but, as in many cases, continued to collect money from the school. (Mark Gail/The Washington Post)
The University of Illinois paid fired football coach Ron Zook $1.3 million while he spent a year trying a new career in banking and working on his water-skiing in Florida.
The University of California paid Jeff Tedford $1.8 million while he took a year off and vacationed in New Zealand.
The University of Maryland paid Ralph Friedgen $2 million while he tried out retirement, played a lot of golf and cruised the South Carolina coastline in his 24-foot whaler, “Fishing with the Fridge.”
These are just a few examples of the golden parachutes that await newly unemployed coaches in the lucrative world of major college sports, a phenomenon recently retired football coach Steve Spurrier once called “hitting that lottery ticket.” Severance pay is the top-rising expense for athletic departments at some of America’s largest public universities, according to a Washington Post review of thousands of pages of financial records from schools in the five wealthiest conferences in college sports.
In a decade, the total annual amount spent on severance by athletic departments at 48 public universities in the “Power Five” conferences increased from $12.9 million combined in 2004, adjusted for inflation, to $28.5 million in 2014. That 120 percent jump outpaced rises on larger athletic budget items such as facilities spending (89 percent), coaches pay (85 percent) and administrative staff pay (69 percent).
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While severance is often a relatively small-line item on the budget of a big athletic department, the notion of large public institutions paying people millions not to work is a regular source of outrage for critics of college sports.
For those who think schools should de-emphasize athletics, severance is the worst type of wasteful spending, particularly for athletic programs dependent on student fees or school money to cover their budgets. For critics of amateurism in college sports, a system that rewards out-of-work coaches with millions but bars athletes from collecting any money is rife with hypocrisy.
“It’s abusive, outrageous, and indefensible,” said Richard Vedder, an economist and director of the nonprofit Center for College Affordability.
School officials defend severance pay as a necessary cost of making changes that can turn around competitively struggling programs. While expensive, big buyouts can yield financial windfalls in ticket sales and donations — if the new coach wins.
“You can’t look at the short term,” said Damon Evans, chief financial officer at Maryland athletics, which now owes $2.6 million to its latest fired football coach, Randy Edsall. “Our goal is the long term, how do we best position this institution, this athletic program, this football team for long-term success.”
But what some see as taking a long view financially, others see as an unsustainable pursuit of a quick fix.
“Expectations have become unrealistic,” said Seth Greenberg, an ESPN analyst and former Virginia Tech basketball coach. Fired in 2012, Greenberg is still getting paid by Virginia Tech as part of $1.2 million in severance he is scheduled to collect through next year.
Greenberg’s replacement, James Johnson, was fired two years later with more than $900,000 left on his contract.
“The patience of yesterday has now probably been overwhelmed by the impatience of today,”Greenberg said, “and there’s a cost of doing business.”
Maryland fired football coach Randy Edsall just 103 days after giving him a contract extension. (John McDonnell/The Washington Post)
On June 30, Maryland Athletic Director Kevin Anderson announced he had signed Edsall to a three-year contract extension worth $7.5 million. In four years as head coach, Edsall had shown steady, albeit slow, progress. The Terrapins were 2-10 in 2011, then 4-8 in 2012, then finished 7-6 in both 2013 and 2014, with bowl appearances capping both seasons.
“I looked at the body of work, and Randy has shown progression each and every year,” Anderson said then.
On Oct. 11 — exactly 103 days later — Anderson woke up on a Sunday morning and decided he had to make a change. The day before, Maryland had lost at Ohio State, the reigning national champion, to fall to 2-4. In the wake of that loss, Anderson fired Edsall, who is owed his $2.6 million through January 2017.
“I looked at the body of work. . . . I had concerns,” Anderson said in a news conference. “I thought we were going to continue to progress.”
Anderson’s quick reversal, and what it will cost Maryland, is part of a trend that shows no signs of subsiding. So far this fiscal year (which runs through next summer) Maryland is one of five Power Five athletic departments that have racked up severance obligations that could run as high as $25.6 million combined, records show, after changing coaches and administrators.
That figure — which does not include coaching changes at private schools, whose financial records are not subject to open records law, such as the University of Miami (which fired football coach Al Golden) — stands only to grow next spring, after another wave of pricey coaching changes following the men’s basketball season.
A few years ago, Colorado political science professor Scott Adler tried to measure the success, or lack thereof, of athletic directors who change football coaches in the hopes of landing a winner.
For his 2012 study entitled “Pushing ‘Reset’: The Conditional Effects of Coaching Replacements on College Football Performance,” Adler collected data from more than 100 teams in college football’s top division between 1997 and 2010. For teams that changed coaches, Adler looked at the first five years under the new coach, and compared their records to similar teams that did not change coaches.
Adler’s conclusion: Changing coaches has minimal, if any, impact on team success. Among the worst teams, Adler found, those that changed coaches won about the same amount over five years as those that didn’t. For mediocre teams, those that changed coaches actually fared worse.
There are, of course, examples of coaching changes that turn around football programs, Adler acknowledged, such as Nick Saban’s hire at Alabama in 2007, and Jim Harbaugh’s this season for Michigan. But for every revival, Adler found, there were several teams that just cycled through coaches, piling up millions in severance along the way.
For example, in 2009, Kansas fired Mark Mangino and paid him $3 million in severance. In 2011, Kansas fired Turner Gill and paid him $6 million in severance. In 2014, Kansas fired Charlie Weis, whom the school owed $5.6 million, which is part of more than $24 million Weis will reportedly collect in severance combined between Kansas and Notre Dame, which fired him in 2009.
Adler thinks athletic directors probably underestimate the disruptive impact of changing a coach — and overestimate how quickly a new coach can build a winner.
“What are you buying when you buy out the coach for $2 million, $3 million, or $4 million and pay a premium for the next hot name on the market that year?” Adler said. “Are you really buying a transformed program, or is it just scapegoating the guy who was there?”
Virginia will pay $2.7 million to former football coach Mike London through 2016. (Joe Skipper/Associated Press)
At the October news conference announcing Edsall’s firing, Anderson said that increasing revenue from the Big Ten conference would help his program cover the $2.6 million severance.
“We’ll be able to weather this,” the athletic director said.
In 2010, when Anderson fired Friedgen, a Maryland athletics news release said the program would cover the $2 million buyout “through revenue generation, private fundraising and strategic business decisions.”
Neither time did Anderson or Maryland athletics mention one important revenue generator for the program: students.
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Maryland athletics has struggled financially for the past few years. In 2012, the program cut seven sports to save money. In 2014, it ran a $17.6 million deficit, according to a Post review.
To help pay its bills, Maryland athletics charges one of the largest mandatory student fees in the Power Five. Each full-time undergrad at College Park paid $406 into athletics in 2014, generating $11.3 million all told for Maryland athletics.
In an interview, Damon Evans, Maryland athletics’ chief financial officer, said no student-fee dollars will pay Edsall’s severance next year.
“We bring in more than enough revenue in other categories: corporate sales and sponsorships, Big Ten money,” Evans said. “There are plenty of dollars generated in those areas to use for severance pay.”
When announcing firings, athletic officials commonly promise certain sources of revenue — often state funds or student fees — will not be used to pay a coach’s buyout. Some experts consider these explanations deceptive attempts to minimize outrage.
“That doesn’t make any financial sense,” said Andrew Zimbalist, an economist at Smith College and sports business expert. “They collect money from various sources, and they use it to pay their expenses. . . . That’s like saying when I bought my ticket to see the Maryland game, it went to coaches’ salary, but when you bought a ticket, it paid the tutors.”
Sometimes athletic departments will say donors agreed to cover a buyout. Money is fungible, though, as Zimbalist and others pointed out, meaning every dollar an athletic department pays in severance is a dollar the department isn’t using for something else.
“If those donors weren’t giving money for the buyout, the AD would be hitting them up for a new locker room or scoreboard,” Zimbalist said.
To determine how much students chip in to severance, Zimbalist recommended splitting an athletic department’s expenses up proportionally: whatever percentage of the department’s overall spending is covered by student fees, that percentage of the severance also comes from students.
In 2014, student fees paid about 15 percent of Maryland’s expenses. If that percentage remained the same next year, then Maryland students will fund about $400,000 of Edsall’s severance, or about $62 per full-time undergrad. And they won’t be the only students seeing their mandatory-fee money go to severance.
The top three Power Five programs most reliant on student fees — Virginia, Rutgers and Maryland — will all owe severance next year. Rutgers owes as much as $5.9 million over several years to fired athletic director Julie Hermann, football coach Kyle Flood and his staff, and Virginia will pay $2.7 million to former football coach Mike London through 2016.
Virginia, Rutgers and Maryland fit the profile of poor or mediocre football teams Adler found would be better off with patience. But Adler, a Colorado professor, knows first-hand that in college sports, patience is often in short supply. In 2010, Colorado fired Dan Hawkins, paying him a $2.1 million buyout. Replacement Jon Embree lasted two seasons before he was fired with a $1.6 million buyout.
Current coach Mike MacIntyre is 10-27 in three seasons. He’s signed through 2018. If he’s fired before then, his contract calls for the school to pay him $2.3 million for each remaining year on his contract.
Last week, Adler noticed an article in a local newspaper — an interview with Colorado Athletic Director Rick George about the football team’s future. George said MacIntyre’s job is safe for next year, but the football team needs to start winning.
“There are lots of schools that have tried to buy their way into the upper echelon . . . and occasionally they will be successful,” said Adler. “But you can also spend an awful lot of money and get nowhere.”
For athletic departments in the wealthy Power Five conferences that still finish the year with deficits, severance is often a factor. These 10 schools paid the most to former employees in 2014.
Source: NCAA financial records, Post analysis
Note: Oregon State mistakenly reported its entire severance obligation to former men’s basketball coach Craig Robinson as paid in 2014; The school actually paid Robinson $1,288,726 in severance that year.
THE WASHINGTON POST
