Colleges barred from offering money to student-athletes are offering them multimillion-dollar coaches instead

West Virginia University research has revealed that college football coaches’ paychecks influence the quality of the players they’re able to recruit.

“College football coach salaries at big-time programs have increased substantially in recent years,” said Brad Humphreys, professor of economics at the WVU John Chambers College of Business and Economics. “We showed one reason for the increase is that colleges can recruit better athletes when they can offer them great coaches—and great coaches command higher salaries.”

Humphreys and professor Jane Ruseski have published their results in the journal Applied Economics.

“For decades, the National Collegiate Athletic Association, or NCAA, hasn’t allowed colleges or universities to compete for student-athletes on a price basis,” Humphreys explained. “Instead, the NCAA limited athletes’ compensation to the cost of attending college and schools began competing to attract players in non-monetary ways.

“That could mean lavish practice facilities or larger stadiums, or it could mean higher-quality coaches. Our work is the first to show that this non-price-based competition for athletes happened in an industry where no such competition was thought to exist.”

The 2021 Supreme Court decision in NCAA v. Alston allowed student-athletes to begin to profit from opportunities like brand endorsements, but the NCAA still largely restricts colleges to offering players scholarships that cover tuition, room, board and other costs of higher education. Big-time NCAA football and basketball programs bring in major revenues that–since they can’t go toward player compensation–pay the salaries of coaches and administrators.

“High-quality college coaches are better at developing athletes for post-college professional careers,” Humphreys said. “They generate wins, so athletes who play for high-quality coaches get to experience more victories, more championships. We found the bigger a head coach’s salary, the higher that coach’s quality and profile, and the more successful their team’s recruitment efforts.”

Humphreys and Ruseski estimated the effect of head coach salaries on recruiting success for 90 NCAA Division I-A football schools between 2006 and 2015. They used data including player rankings from 247Sports, which measures the quality of different schools’ recruiting classes.

The average score awarded to a recruiting class by 247Sports over the 2006 to 2015 seasons was 172. The researchers discovered that for every $1 million bump in the salary of the head coach, the quality score of the incoming recruiting class jumped by an average of 77 points.

“This is consistent with the presence of an arms race in intercollegiate athletics,” Humphreys said. “In an arms race, firms race to outdo each other not through price wars, but through strategies like facilities, equipment, product quality, customer service, personnel. Now NCAA institutions are engaged in an athletics arms race in the form of escalating coaches’ salaries and multimillion-dollar investments in facilities—a rational response to NCAA regulations that limit compensation to athletes.”

The study showed the average head football coach earned $1.8 million per season, with top earner Nick Saban bringing in more than $7.4 million in 2015 at the University of Alabama. But salaries veered sharply upward over the course of the study, Humphreys emphasized.

In 2006, the average head football coach in the sample earned about 14 times more than the average full-time faculty member. By 2015, the coach earned more than 26 times the faculty member’s salary.

Humphreys said he believes that the steep rise in coach compensation can’t be adequately explained by the “rising tide” of revenues earned by college football teams.

“Our results imply the increase in head football coach salaries represents strategic interaction among athletic departments as they compete for high-quality coaches. When one school gives a head coach a raise, competing schools will follow, creating an upward spiral in salaries. There are policy implications there, given that the head football coach at a state’s flagship public university is often the state’s highest-paid public employee.”

He said, “Some advocates of reform want Congress to enable college sports to put a salary cap on head coach compensation, but that may not be necessary after the decision in NCAA v. Alston. We’ll need to see how institutions adjust to an environment where athlete compensation beyond NCAA regulations is possible.”