At NC State and UNC, coaching compensation outstrips big athletic department revenue gains
As recently as the 2013-14 fiscal year, the $150,000 mark in annual compensation was still something of a milestone for coaches in most sports at UNC-Chapel Hill and N.C. State. Football, men’s and women’s basketball and baseball coaches had long surpassed that number by then, but coaches in the majority of non-revenue sports, at both schools, made less than $150,000.
That has changed during the past five years, a period of media-rights-fueled financial growth that shows no signs of slowing, and may well accelerate after the launch in August of the ACC Network. Five years ago, at the end of the 2013-14 fiscal year, head coaches in 15 sports at UNC and N.C. State received more than $150,000 in annual compensation, including salary, benefits and bonuses.
By the end of the most recent full fiscal year, last June, head coaches of 32 teams at UNC and N.C. State made more than $150,000 annually in full compensation. At UNC, coaching compensation, including those for assistant coaches, increased by 39.1 percent in the past five years. At N.C. State, it grew by 28 percent.
At both schools, the state’s only two public institutions in the ACC, the growth in coaching compensation is outpacing even the considerable growth in revenue, which continues to push athletic department budgets at major conference schools to record levels. UNC last month reported a record $104.6 million in athletic department revenue during the 2018 fiscal year. N.C. State, meanwhile, reported $88 million.
The numbers are detailed in the schools’ most recent Operating and Capital Financial Data Report, which is submitted annually to the NCAA. The details are illuminating yet hardly surprising to those who might criticize big-money college sports: while revenue continues to increase so too do the ways schools find to spend the money, with rising coaching compensation leading athletic department expenses at both schools.
“I do think it’s a challenge for our industry,” Bubba Cunningham, the UNC athletic director, said during a recent interview, speaking about never-ending increases in expenses, particularly in coaching compensation. “And I think it’s been particularly acute at North Carolina.”
At both N.C. State and UNC, athletic department revenue has grown by approximately 25 percent during the past five years. Expenses during that span have soared, too, with a 22.7 percent increase at UNC, and a 33.6 percent increase at N.C. State. Scholarship costs are among the greatest expenses, and they’ve increased by 44 percent at N.C. State and by 34 percent at UNC since 2014.
No expense, though, is greater than that of compensation for coaches. During the 2013-14 fiscal year, UNC paid $13.6 million in coaching salaries, benefits and bonuses. That number grew to nearly $19 million during the 2017-18 fiscal year. At N.C. State, money directed toward coaching compensation went from $14.4 million five years ago to $18.4 million in 2018.
“Costs in collegiate athletics have risen substantially,” Debbie Yow, the N.C. State athletic director, said in a statement. “But we believe we’ve maximized a budget that remains in the fourth quartile nationally among Power 5 conferences, while achieving first quartile competitive results.
“N.C. State continues to carefully monitor and measure financial trends in our enterprise while exercising fiscal responsibility within the framework of our campus.”
As much as athletic department revenue has increased at UNC and N.C. State, both schools trail, by a wide margin, the wealthiest schools in the country. Texas and Texas A&M both generate more than $200 million in athletic revenue, according to USA Today, which keeps a national database of schools’ revenue and expense data.
USA Today has not yet updated the database to include the 2017-18 fiscal year but, during the previous year, 28 schools reported revenues greater than UNC’s latest figure, and 43 schools reported revenues greater than the revenue N.C. State reported last month. So while UNC and N.C. State are making more money, both face a significant challenge in closing the revenue disparity with their richest peers.
At UNC, Cunningham said that increasing coaching salaries has been among his priorities in recent years. When he arrived at UNC in 2011, he said he was “surprised” at “how far off the market our coaches were.”
“Particularly given the success they’ve had,” he said. “And in the last five or six years, I’ve made it a priority to increase the compensation levels for the coaches. And that’s what we’ve done. That’s where the vast majority of our increase (in revenue and expenses) has gone – to coaches’ salaries.”
Over the past five years football coaching compensation, for both head coaches and their staffs, increased 45 percent at N.C. State and UNC. The money that UNC directed towards former head coach Larry Fedora and his staff increased by approximately the same 45 percent during that period, which doesn’t include the Tar Heels’ 2-9 finish last fall.
Fedora’s salary, including bonuses, went from $1.9 million during the 2013-14 fiscal year to $2.7 million during the 2017-18 fiscal year. His assistant coaching staff, meanwhile, received nearly $4 million last year, up from $2.7 million five years ago. UNC fired Fedora and most of his staff in late November after the Tar Heels won a combined five games during the 2017 and 2018 seasons. He was replaced by former Tar Heels coach Mack Brown. Fedora’s buyout -- approximately $12 million over four years -- will start to be reflected in UNC’s 2018-19 revenue and expense data.
At N.C. State, the compensation that coach Dave Doeren received in salary and bonuses grew by 54 percent over five years. He received $1.9 million during the 2013-14 fiscal year, and $2.9 million in the fiscal year that ended last June. In the same span, the compensation directed toward N.C. State’s assistant football coaches went from $3.2 million to $4.4 million – an increase of about 39 percent.
Men’s basketball coaching salaries and bonuses increased at UNC over the past five years but remained mostly flat at N.C. State, which fired former head coach Mark Gottfried in 2017 before hiring Kevin Keatts, the current coach. Keatts received $2.4 million during the 2017-18 fiscal year, a decrease of about 2 percent from what N.C. State paid Gottfried (also $2.4 million) five years ago. On its most recent report, N.C. State listed an expense of $1.2 million in severance payments for Gottfried. (Keatts recently received a $400,000 annual raise, announced last December.)
At UNC, coach Roy Williams received $2.5 million in compensation and bonuses from the university in 2017-18, up from about $2 million he received in 2013-14. During the same span, UNC’s assistant basketball coaches went from a combined salary (including bonuses) of a little less than $1 million in 2013-14 to a combined salary of $1.4 million in 2017-18 – an increase of nearly 40 percent. The Tar Heels went to two Final Fours during that span and won the 2017 national championship. UNC recently announced an extension for Williams through the 2027-28 season.
With few exceptions, coaches in all sports, at both schools, have benefited from the infusion of revenue. At UNC, head coaches in four sports – women’s lacrosse, women’s tennis, field hockey and wrestling – more than doubled their compensation in the past five years. Jenny Levy, the women’s lacrosse coach who has led UNC to two national championships and seven Final Fours in the past 10 years, received $289,699 in 2017-18 – a 125 percent raise from her pay in 2013-14 ($128,854).
Cunningham, the UNC athletic director, said Levy’s compensation increased as much as it did last year because she received more than $100,000 in bonuses – about half of which she’d accumulated, but not yet received, during the previous fiscal year.
At N.C. State, Braden Holloway, who leads the Wolfpack’s men’s and women’s swimming and diving programs, received the greatest raise, by percentage, in the past five years. His compensation went from $83,591 in 2013-14 to nearly $150,000 in 2017-18 – an increase of 78.7 percent. During that span, he was named the ACC men’s swimming and diving coach of the year four times, and the women’s coach of the year once.
UNC’s head coaches, in both men’s and women’s sports, increased their compensation by an average of 41 percent in the past five years. In men’s sports, the average head coaching compensation increased from $524,489 in 2013-14 to $741,436 in 2017-18. The average head coaching commpensation for women’s teams went from $171,980 to $244,079 in the same span.
During the same period, N.C. State’s average head coaching compensation for men’s teams went from $641,705 to $707,661 – an increase of 10.2 percent. The average head coaching compensation for women’s teams increased 27.2 percent, from $183,597 to $233,577 over five years.
Behind the growing coaching compensation remains a steady flow of increasing revenue. At both schools, money from booster contributions and media rights grew steadily over the past five years, and shows no signs of slowing. Ticket sales revenue increased by 14.4 percent at UNC during that span (from $23 million to $26.3 million), but declined by 5 percent at N.C. State (from $21 million to $19.9 million).
At UNC, the top three sources of athletic department revenue during the 2017-18 fiscal year were ticket sales ($26.3 million), contributions, including those from the Rams Club ($20 million) and media rights revenue, including the university’s cut of the ACC’s television rights deal with ESPN ($19.6 million).
At N.C. State, the top three sources of athletic department revenue were media rights ($25.6 million), ticket sales ($19.9 million) and contributions, including those from the Wolfpack Club ($14.8 million). UNC and N.C. State both received around $19.3 million in media rights revenue from the ACC.
The $6 million discrepancy between both schools in that category is the result of a different accounting of the schools’ secondary media rights deal with Learfield, which owns the football and men’s basketball radio broadcast rights at UNC and N.C. State.
Both UNC’s and N.C. State’s financial data reflect the reality that college football has become the undisputed financial driver of major college athletics. At N.C. State, football revenue during the 2017-18 fiscal year amounted to $45.5 million – about three times more than men’s basketball revenue (15.9 million). The gap in profitability was even larger – $21.5 million for football and $4.7 million for men’s basketball.
At UNC, men’s basketball was more profitable than football as recently as the 2013-14 fiscal year. Since then, though, the profitability of UNC’s men’s basketball program has increased by 7.3 percent, while its football profitability has increased by 72.2 percent. During the 2017-18 fiscal year, UNC reported football revenue of $43.6 million (compared to $25.2 million in men’s basketball) and a profit of $22.4 million (compared to $15.4 million in basketball).
Football became the more lucrative sport at UNC in 2014-15, and the gulf has only widened – even during a period in which UNC’s basketball program won a national championship and appeared in two Final Fours, while its football team finished 3-9 in 2017.
While athletic department revenues have increased steadily at UNC and N.C. State during the past five years, the growth might represent only the beginning. The ESPN-backed ACC Network is launching in August, and conference and school officials are hoping that it generates an even wealthier flow of money.
“We’ve talked in generalities about what we hope it will generate,” Cunningham said, before adding that he couldn’t be sure how lucrative the network might be. Before UNC and N.C. State make any money off of the network, though, they’ll have to repay loans they took from their universities to construct studios for the network. At UNC, that loan could cost as much as $15 million.
“We’ll have to repay that money as the ACC Network money comes in,” Cunningham said. “So, I haven’t budgeted anything going forward, because I have to get the building paid before anything would come to the department.”