Paying Jim Harbaugh millions to coach U-M makes business sense

By hiring Jim Harbaugh to coach football, the University of Michigan has opened the door to a much-needed discussion of what’s happened to big time college sports.

This isn’t just about the U of M, to be sure, although Harbaugh’s hiring has become a national news story brandishing comments like a New York Times story last Wednesday: “Never has (college sports) been so awash in money, a growth industry on campuses that some observers believe increasingly resembles professional football more than higher education.”

When I first started going to Michigan football games back in 1946, things sure were different. Michigan Stadium held had 85,752 back then, fans sitting cheek to jowl, no fancy cushions, no private boxes. A 1946 U of M “season ticket” offered last week on eBay had a face value of $15, plus $3 tax. And tickets were easy to get. “Band Days” brought thousands of high school band members into the stadium, giving the appearance of a full house. My father and I would eat an apple at halftime, and on the way home we’d go by the Dexter Cider Mill for cider and doughnuts.

Today, Michigan Stadium’s rated capacity is 109,901, but I’ve heard crowds announced at nearly 115,000. The athletic department is proud of the 250 consecutive crowds of more than 100,000, “the largest crowd watching a football game in America today.” Tickets are expensive; just the seat license (i.e. permission to buy a ticket) runs $600 for a season, while game tickets are around $75 each, depending on the game and seat location. Hungry? At halftime, you can get away with chicken, fries and a big drink for around $20.

Back in 1946, you could hear Bob Ufer call the game on WUOM, the University’s radio station. “Meeeechigan scores!” he’d shout. And you’d cheer. Today, every game and everybody is on TV every day. The Big Ten Network is among the big financial successes of national sports/entertainment. (The Big Ten athletic conference, of course, now has 14 members and is marketing its androgynous logo, “BIG”.) ESPN, the sports TV network, is paying $7.3 billion (!) over 12 years to telecast seven championship bowl games.

Salaries for head football coaches have grown proportionately. Fritz Chrisler was hired from Princeton in 1938 at a starting salary best estimated at less than $25,000. Legendary coach Bo Schembechler earned $21,000 in 1969, the equivalent of $135,000 in today’s inflation-adjusted dollars. Brady Hoke was paid an average of $3.6 million annually, including his buyout. Jim Harbaugh was hired last week at a base salary of $5 million for seven years, together with various performance incentives. Alabama’s Nick Sabin gets a reported $7.1 million, highest in the country.

Of course, much of the vivid discussion about what’s happened to big time college sports has to do with growing and enormous disparities between coaching and academic salaries, reflecting the terrific changes in relative prestige and social importance of the sports/entertainment complex on the one hand and academe on the other. New University of Michigan President Mark Schlissel, for instance, gets $750,000 annual base pay; Jim Harbaugh gets 6.7 times more.

There’s something badly out of whack here.

One reason is that for many years universities managed to inhabit one world, sports another, making comparisons largely irrelevant. But with the advent of television and all the money and public attention that medium brings, the sports/entertainment complex has come to infest previously serene college campuses all around the country.

Another has to do with simple economics. Giant football stadiums are expensive fixed assets, and they need to be filled with paying fans if the bonds are to be repaid. Ticket sales for the Michigan football program were $43 million for the 2012-13 season, according to MLive.com. But over the same period, according the Sporting News, U of M student ticket sales dropped by 6,000. At $295 per season ticket, that’s a big chunk of change. More important, the rumor in Ann Arbor is that the waiting list for season tickets has pretty much dried up, suggesting revenue hemorrhages could have destabilized the athletic department if nothing were done.

Even at $5 million a year, hiring a big-name coach like Jim Harbaugh – especially one the fan base thinks will walk on water – makes enormous business sense when you consider what’s likely to happen to ticket sales in the coming years. Interim Athletic Director Jim Hackett, a very successful CEO of Steelcase, plainly knows his numbers as well as his marketing.

So maybe the inevitable conclusion is that big time college sports (especially football) in America is now and forever will be infected by the ugly face of rampant professionalism and money-chasing.
Another possibility – and here, as a U of M alum and former Regent, I’m easily open to charges of wishful thinking – Harbaugh’s particular priorities might actually make a difference. After all, when he was football coach at Stanford back in 2007, hardly academic chopped liver, he antagonized U of M fandom by calling out University athletics on grounds of academic failure.

President Schlissel, Interim AD Hackett and Harbaugh have all indicated their commitment to maintaining an equilibrium between excellence in the classroom and in athletics. That used to be the way Michigan did it. And I hope it’s not too much to hope they can do the same thing all over again.