Financial markets have a way of correcting themselves.
A bubble in the stock market bursts, and workers nervously, and with no small amount of trepidation, sneak a peek at their 401k and IRA plans.
Things happen … unless you’re a major college football coach.
It’s a high-risk, high-reward profession. You either get rich or get fired or get rich before and often when you get fired.
It’s a high-pressure gig, but man, the benefits can last a lifetime.
Last week, Virginia Tech gave Justin Fuente a raise to $4 million for 2018. His contract also was extended through the 2024 season, when he will be paid $5 million.
Fuente didn’t demand or even ask for a raise and extension.
But several big-time jobs were open, and Fuente’s name was popping up as a coach of interest. Fuente is 19-8 in two seasons at Virginia Tech. He knows what he’s doing. He’s a coach with the potential to put a team in contention for one of the four spots in the College Football Playoffs.
Fuente has a $5 million buyout clause for 2018. But if, say, Florida State had really wanted Fuente, FSU would have cut a check for the buyout, given Fuente $5 million a year and considered itself fortunate to have hired the next great major college football coach.
You would think this craziness would end. When the stock market gets crazy, it calms down (corrects, crashes, tanks).
There is no calming effect in major college football. It’s just plan insane.
“The optics are getting tougher to defend,” Virginia Tech athletics director Whit Babcock said. “I keep thinking a ceiling is coming, but I also thought that when it crossed $1 million.
“We didn’t have to give Justin a raise. He didn’t ask for anything, and he has been incredibly loyal. We chose to do it. We want to finish first in the ACC and first in the country. When you have somebody you believe in, you do what you can for them until you can’t.”
When Virginia Tech hired Fuente after he had done a superb rebuilding job at Memphis, he was given a six-year contract. His first-year salary was $3.2 million, and his salary in the sixth season was to be $3.65 million.
After one season, Fuente got a raise and a contract extension.
After his second season, Fuente got another raise and extension. The $4 million for the 2018 season matters. The $5 million for 2024 is meaningless.
By 2024, Fuente will either receive much more money from Tech or be coaching elsewhere for more money than Virginia Tech could or would pay.
This isn’t to single out Fuente or Virginia Tech.
Every successful major college football coach gets a pay bump and extension on an almost annual basis. It’s the price of doing business in the upper echelons of major college sports.
You’ve got to pay to play.
If you have a coach you like, you pay him as much as you can for as long as you can to keep him.
The economics, though, just don’t seem to make sense.
However, losing a coach to another school or firing a coach because he’s losing is almost as expensive as a six-year contract.
When a coach leaves, so do many of his recruits. If a coach is fired for losing, that almost always means fewer fans have been attending games and deep-pocketed alumni and boosters are unhappy and sitting on their checkbooks instead of opening them.
“We clear $2.5 million for a home game,” Babcock said. “In terms of economics, we know where our bread is buttered and revenue is driven. Maybe that puts (salaries) more in perspective.
“Alabama probably makes $7 million per home game, so for a home-game-and-a-half, they can pay Nick Saban ($11.1 million per year). There are lots of ways to turn it and look at it.”
Television and conference alignments have brought most of these millions and billions into college football, and no correction is in sight.
College football is extraordinarily popular, but the TV landscape is changing. Subscribers are cutting the cable cord, networks are looking at their balance sheets and assessing whether the return on their investment is as lucrative as it once was or needs to be.
But … Facebook, Amazon, Google, Netflix, Hulu, Twitter and a host of other streaming services one day might want to become major players in college football. And the bidding wars will escalate.
Before that happens, is it possible a state or national legislator or governor, who is not concerned about losing tickets for seats in the president’s box, will ask why so much is paid to coaches responsible for a relative handful of students instead of being used to prevent so many students from leaving college tens of thousands of dollars in debt?
That’s a reasonable question. Maybe one day someone will have the courage to tackle it.