The business of college athletics is run by stakeholders rather than stockholders and the bottom line is measured by victories rather than profits. Sports economist Andrew Zimbalist says this is why Texas A&M is paying Jimbo Fischer more than $75 million to not coach its football team. Coaches at some of the nation’s top programs also have massive severance packages baked into their contracts.
Zimbalist, a Smith College professor emeritus of economics who has written more than a dozen books on college and pro sports, predicts that if athletes become employees in the next 30 years, the benefits and severance payments coaches receive will start to come down. In the meantime, athletic programs will experience substantial losses.
Fisher was fired Sunday, just over two years after he signed a fully guaranteed 10-year, $95 million contract. Texas A&M said it will use donor funds to make an initial payment on the $75 million-plus owed to Fisher and pay the rest with athletic department revenue on an installment plan.
Six active coaches have buyout clauses that would pay each more than $50 million if they were fired without cause. The length of the contract affects the buyout amount, and some coaches have contracts up to 10 years, which creates eye-popping buyout figures.
Nebraska athletic director Trev Alberts hired Matt Rhule last November and signed him to an eight-year, $74 million contract. Rhule agreed to receiving 90% of what he would be owed as opposed to having a fully guaranteed contract, and his buyout stands at $62 million this year.
Richard Zimbalist and Southall said university presidents and trustees typically aren’t comfortable dealing with athletic department matters and often defer to their athletic directors, whose own careers hinge on winning. Financial prudence goes out the window.
You can get poll alerts and updates on AP Top 25 football throughout the season by signing up here: AP college football – https://apnews.com/hub/ap-top-25-college-football-poll and https://apnews.com/hub/college-football