Published December 13, 2013 - 12:30pmNEW: Follow on facebook -
A second year coach goes 8-4. He’s likely losing his top playmakers and possibly even entering a rebuilding year in the SEC West. Let’s give him a raise to $5 million per year making him only one of three coaches earning that kind of coin on an annual basis. Crazy? Not necessarily.
If you measure the salary and the production in traditional terms, Kevin Sumlin is certainly overpaid. Is Sumlin worth $5 million a year to lose 4 games while having one of the most electric quarterbacks in the country? Of course not, but there’s another side to the argument.
There’s an argument to be made for overpaying a guy like Kevin Sumlin to keep the program going in the direction it is going. College football can mean big money for the University. It can increase athletic department revenues, and it can increase tuition (see the rise in Alabama out-of-state tuition during Nick Saban’s run).
By locking up Kevin Sumlin, Texas A&M might not be guaranteeing future championships, but they are guaranteeing that they remain relevant, and remaining relevant is a big deal. Just ask Tennessee fans.
College football revenues have been on the rise for years now, and while they certainly won’t rise forever, there’s a great chance that it continues for the coming years. College football is entering a new era yet again, and a main aspect of the new era is driving new revenue. Larger and more powerful conferences with their own television networks. The SEC Network is a game changer for SEC schools. The college football playoff will drive additional revenues. While the stakes are big now for college football programs, the stakes are even bigger in the years ahead.
Texas A&M knows this. Is Sumlin overpaid with regards to wins and losses? Absolutely. Is he overpaid for what he means for the University and what he means for the Aggie football program moving forward? I don’t think so. If Sumlin were to leave, the risk is very real that Texas A&M fails to replace Sumlin with a candidate that keeps the program “buzz” going.
Related: The SEC’s highest paid assistants
Texas A&M has gambled in recent years. First by leaving the Big 12, then by firing their previous coach and getting Kevin Sumlin. These moves have paid off, and while the SEC membership will likely continue to pay dividends, letting Sumlin leave would have been a mistake. Instead, Texas A&M is locking in their gains.
As I’ve said in the past, if you attend an SEC event with the coaches present, Kevin Sumlin is easily one of the more impressive individuals out of all the SEC coaches. He’s got a presence that attracts. People want to listen to him; that includes the media and it includes high schools athletes in the state of Texas.
You might say there’s a bit of a land grab going on as we enter the new era of college football. Schools are making moves to ensure they’re in the mix and that they will get a piece of the growing revenue pie. The two primary goals are 1) ensure you’re in a power conference and 2) get a charismatic, top 15 coach in the country. Most of the conference realignment is over at least in the near term, but schools are still jockeying to ensure they have a top coach leading their program.
Why would Texas pay Nick Saban $10 million a year? Because he’s a guarantee of future relevance for the Longhorns. Top programs like Texas face a degree of uncertainty moving into the new era that Texas A&M doesn’t have. Again, Kevin Sumlin doesn’t guarantee 12-0 seasons, but he guarantees quality recruiting, sound leadership, a dynamic offense, and a major presence in the state of Texas and the SEC. It’s worth $5 million annually to lock these things up for the program.
The certainty that Kevin Sumiln brings is worth the possible $2 million difference between Sumlin and another unproven man at the helm (assuming another coach would earn roughly $3 million annually).
It’s not uncommon in the business world for companies to acquire other companies for sums of money that seem too high to justify at the time. I like to compare it to when Google purchased YouTube for $1.65 billion in 2006. It was an exorbitant sum for a quirky video website. At least back then. This year, YouTube generated $5 billion in ad revenue for Google. Google had the foresight to secure their spot in online video market, taking a gamble that video was going to get bigger and bigger on the internet. It paid off.
If college football’s next decade continues the growth rates we’re seeing now, and there’s very good reason to believe it will, the kind of revenue that a school like Texas A&M is likely to generate will make a $5 million salary for Kevin Sumlin seem like a bargain. Just like Google buying YouTube for $1.65 billion now seems like a bargain.
Texas A&M may not win an SEC Championship or even the SEC West in the future, but they have secured their place as a very relevant team in the SEC and in the state of Texas.