Saban's $11 Million Dollar Contract Is Still Low For What He Brings In

Now I know what you are thinking. He just became the highest paid coach in the United States for both professional and collegiate sports, how can he be undervalued?

In finance, you are only worth what you bring in right? If you are not generating revenue you will be shown the door, and if you bring in high revenue, your compensation will show it.

During the nine years Saban has served as head football coach, Alabama has compiled an overall official record of 101-18 (.849) (106-18 on the field), seven bowl game appearances with five victories, a share of five SEC Western Division titles, four SEC championships, and four national championships.

While this generates revenue from TV deals, merchandise, brand value, etc. It is more important to look at what he brings in off the field and why I believe he is worth more than $11 million a year.

This article[/embed]posted by Forbes in 2013 has shown that

Since 2007, Tuscaloosa has swelled its undergraduate ranks by 33% to over 28,000 students. Faculty count has kept pace: up 400 since 2007 to over 1,700. But it's more than growth - it's where the growth is coming from. According to the school, less than a third of the 2007 freshman class of 4,538 students hailed from out of state. By the fall of 2012, more than half (52%) of a freshman class of 6,397 students did.

The school realized $50 million more in out-of-state tuition revenue for last fall's incoming class than it did for the same class in 2007 ($76 million vs. $26 million). Kick in the additional $8.5 million in in-state tuition, which rose to $9,200 a year from $6,400 over the same period, and overall tuition revenue rose to $104 million from $46 million for the respective 2012 and 2007 freshman classes.

And that is only until 2012! If you look at todays figures the freshman classes are increasingly out of state students for Bama, and if you look at SAT/ACT/GPA/Admissions in general for Alabama the school is increasingly becoming a better academic school. The scholarship funds are up, academics are up, football keeps winning (or losing in national-championships), and the school is on a great trajectory.

in 2016;

More than 40 percent of UA's 7,559-member freshman class scored 30 or higher on the ACT, up from last year's record 36 percent.

so you can see the direct impact that Saban has really had on academics. There are several studies that show the football program has had a major impact on the schools academic success.

Going to another SEC school, I would certainly love my school to pay Saban $11 million a year, as he is worth every penny, and more.

Any thoughts on this? Anyone think $11 million is too high or not worth it? I know Bama won't become MF Harvard or anything, but is it implausible to think Bama could become a highly regarded business school? Right now they are listed as a top 50 public university.

Comments (36)

Jun 28, 2017

ROLL FUCKING TIDE. 11M isn't enough.

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Jun 28, 2017

But does he get stock options?

Jun 28, 2017

I know a lot of guys who have gotten into IB from UA, and that number's been increasing rapidly. The new Dean is building a new facility, we just got a trading room with Bloomberg terminals, and OCR keeps on growing with even larger and larger banks/investment managers.

There's a lot of good, qualified kids that go here. Definitely underrated.

Great career services group too

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Jun 29, 2017

A lot of us fraternity guys made it through alumni connections but Business school is def underrated.

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Jun 29, 2017

And there's an investment banking academy has a 100% placement rate for ER, S&T, and (obviously) IB.

If you go there, and choose to do well, join orgs (a fraternity is a great choice), and look for internships, you can 110% get into whichever field you want.

Jan 22, 2018
KingColonize:

And there's an investment banking academy has a 100% placement rate for ER, S&T, and (obviously) IB.

If you go there, and choose to do well, join orgs (a fraternity is a great choice), and look for internships, you can 110% get into whichever field you want.

110%?

Do you grow a new arm or eye for efficiency?

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

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Jun 29, 2017

OP, you're operating under some false pretenses. My step-niece is a 2016 graduate of Alabama; she hails from the Washington, D.C. suburbs in Virginia. Her attendance had nothing to do with Alabama football and everything to do with UA offering her a partial scholarship to attend (she still paid double the tuition as she would have in-state Virginia).

Remember--correlation does not necessarily equal causation.

On a separate note, I find a not-for-profit, tax-exempt organization paying someone $11M to be a complete bastardization of the tax system. You can literally get a tax write-off by donating money to Alabama (or any athletic dept.) that will turn around and pay its CEO $11M. That's totally out-of-whack.

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Jun 29, 2017

To be fair though, a lot of people from the Northeast choose to go there because of their Greek life/college scene as a whole which is much easier to cultivate when you have football games every other week in a stadium of 100,000+ people and absolutely dominate the CFB scene. So those two things might not be directly correlated but the quality of the football program at UA definitely factors into what OP is saying.

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Jun 29, 2017
hungry23:

To be fair though, a lot of people from the Northeast choose to go there because of their Greek life/college scene as a whole which is much easier to cultivate when you have football games every other week in a stadium of 100,000+ people and absolutely dominate the CFB scene. So those two things might not be directly correlated but the quality of the football program at UA definitely factors into what OP is saying.

Many people go to UA out-of-state because they fail to get into a good in-state university (as my niece did), at which point Alabama incentivizes their attendance through offering partial scholarships.

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Jun 29, 2017

That's true, but a lot of other schools do the same thing with scholarships. What makes Alabama attractive is their student life, which is why a lot of people (people who have other options) end up going there. Don't get me wrong, scholarships are for sure a major contributor, but if you have to choose from two schools that offer you the same scholarships, chances are you'll end up going to where you feel like you'd have more fun--and that is where Bama's student life and football program come into play.

Jun 29, 2017

I just don't buy it as a general rule. The vast, vast, vast majority of out-of-state high school students, particularly from the northeast United States, and particularly girls, know absolutely nothing about Alabama football or about college football in general. If the argument is that Saban helps on the margins or that Saban helps steal other southeast kids from other SEC schools then sure, I'd buy that. I just don't buy that Alabama football has any material impact in recruiting kids from the NE United States where non-NFL football is a distant second to basketball.

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Best Response
Jun 29, 2017

Without the Tide Alabama is Mississippi state. The football team is the driving force behind that university from a branding perspective. Your niece wouldn't even consider Bama if they went 2-6 in the SEC every year.

For another example see Clemson. Sports success is the fastest way to raise the profile of a university.

https://www.washingtonpost.com/sports/colleges/at-...

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Jun 29, 2017
Cardinal:

Without the Tide Alabama is Mississippi state. The football team is the driving force behind that university from a branding perspective. Your niece wouldn't even consider Bama if they went 2-6 in the SEC every year.

For another example see Clemson. Sports success is the fastest way to raise the profile of a university.

https://www.washingtonpost.com/sports/colleges/at-...

Bullcrap. My niece knew d*ck about Alabama football prior to attending Alabama. Alabama football has almost zero impact on northeast kids who don't even watch college football. Above the Mason-Dixon line, college football is not particularly popular, and where it is, Alabama is not the school people follow.

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Jun 30, 2017

Yeah, but she had at least heard of Bama. Did she apply to UAB or Bama A&M? No. Even if she doesn't care about football, the general public is still more aware of the school.

Jun 30, 2017
maineiac42:

Yeah, but she had at least heard of Bama. Did she apply to UAB or Bama A&M? No. Even if she doesn't care about football, the general public is still more aware of the school.

She applied to Alabama because she was being recruited. That's a case of correlation does equal causation.

Jun 30, 2017

But what you are missing is that Alabama football is crucial to the overall atmosphere of the campus, which attracts non-football fans. The campus would look and feel very different without the winning football program.

Jun 30, 2017

Amen.

Jun 30, 2017

I agree completely. Winning titles makes colleges household names and brings familiarity to students who may not have been interested otherwise.

While Dachsund's niece may not care about college football, I can guarantee that other high school boys in her classes were talking about Alabama's loss to Clemson at the last second of the game or how they only won last year because of trick plays. It is only one game that they may talk about but it brings the awareness of the school to students that wouldn't have been aware otherwise.

Also, simple supply and demand causes the increase in academics. The more students that apply, the more selective they can be effectively raising their academic standard.

Jun 30, 2017
Can't_Catch_Me:

While Dachsund's niece may not care about college football, I can guarantee that other high school boys in her classes were talking about Alabama's loss to Clemson at the last second of the game or how they only won last year because of trick plays. It is only one game that they may talk about but it brings the awareness of the school to students that wouldn't have been aware otherwise.

The high school boys in the D.C. area who care about college football care about Virginia Tech, West Virginia, Penn State, UVa, and Maryland. Nobody cares about Alabama football here, especially not high school kids.

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Jun 30, 2017

I'm not saying they care about Alabama football but they'll watch big games like National Championship games which Alabama has been in practically every year since Saban started. It is similar to March Madness. Tons of people watch March Madness that don't pay any attention to NCAA basketball during the regular season. Most people would've never heard of Gonzaga if it weren't for them doing well in basketball every year.

Your niece may be the exception to this but it is how a lot of other high schoolers become aware of schools outside of their region.

Jun 30, 2017
Can't_Catch_Me:

I'm not saying they care about Alabama football but they'll watch big games like National Championship games which Alabama has been in practically every year since Saban started. It is similar to March Madness. Tons of people watch March Madness that don't pay any attention to NCAA basketball during the regular season. Most people would've never heard of Gonzaga if it weren't for them doing well in basketball every year.

Your niece may be the exception to this but it is how a lot of other high schoolers become aware of schools outside of their region.

Again, Alabama was a well known football quantity prior to Saban. It had won 12 football national championships prior to Nick Saban's appearance on the scene. Alabama's program had a ton of money, which is how it was able to hire a top 3 head coach.

You guys are operating under the assumption that Alabama football was struggling, poor and unknown, then Saban arrives on the scene and Alabama becomes successful, wealthy and known, and people in Rhode Island start caring about attending Alabama. Certainly Saban's success doesn't hurt, but the reality is, Alabama's academic recruitment efforts have vastly increased the last decade, which happens to coincide with when Saban arrived on the scene. The correlation does not necessarily equal the causation.

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Jun 30, 2017

Alabama was a mid level team for years before Saban arrived. It was not near the powerhouse that it is now. I know historically they have been good, bu Yale and Princeton can also make that claim- do you also consider these to be top football schools because of their historical accomplishments?

College sports is very much a what have you done for me lately topic.

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Jun 29, 2017

@Dances with Dachshunds" And you're absolutely right about that. Football doesn't affect those people directly. My argument was that the student/Greek life attracts those kids from the NE--and that student life is influenced by the football scene. So even if not directly, but maybe indirectly it has an impact on their decision because without the football dynasty Alabama has, I don't think student life at Bama would be as big as it is now. After all, everyone loves to party after their team wins a big game/championship, and the football team gives them a lot of reason to do that, which improves the student experience as a whole.
It's hard to quantify it, but football most definitely has an impact on the things OP brought up IMO.

Jun 30, 2017

Thanks for the stats lesson.

Look at the data posted above, and remember that statistics mean nothing to the individual (aka your niece) The school has increased attendance, funding, and average GPA/SAT scores more rapidly than other schools due to the popularity of their football, Greek life, and culture. This allows them to spend more money on scholarships, programs, etc. It is a result of the branding and national attention the school gets. I go to an SEC school and have many friends at Bama who are out of state. I know without the popularity of football resulting in their brand growing, they would not be there.

But lets agree to disagree I guess, as after reading your posts in this thread its clear you are right and we are all wrong.

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Jun 30, 2017
Wu_Tang Financial:

Thanks for the stats lesson.

Look at the data posted above, and remember that statistics mean nothing to the individual (aka your niece) The school has increased attendance, funding, and average GPA/SAT scores more rapidly than other schools due to the popularity of their football, Greek life, and culture. This allows them to spend more money on scholarships, programs, etc. It is a result of the branding and national attention the school gets. I go to an SEC school and have many friends at Bama who are out of state. I know without the popularity of football resulting in their brand growing, they would not be there.

But lets agree to disagree I guess, as after reading your posts in this thread its clear you are right and we are all wrong.

The difference between you and me is that I actually have first hand knowledge of what Alabama is doing--and it's not just sitting back and letting its football program sell random females from Washington, D.C. Alabama is actively recruiting out of state and actively offering people scholarships to encourage them to come to Alabama rather than their in-state alternatives.

Actively pursuing northeastern students willing to pay out-of-state tuition (partially reduced) is not the same thing as Alabama football does well ---> people who don't follow football randomly choose to attend Alabama because Alabama football is doing well. Again, it comes back to correlation/causation--that UA has actively stepped up its out-of-state recruitment efforts is almost certainly coincidental with Saban's success. Has Saban's success helped those recruiting efforts on the margins? Yes, definitely, but it's not the reason Alabama would pull down kids from north of Washington, D.C. when basketball rules the day or, at best, West Virginia, Virginia Tech, Penn State, Notre Dame and Miami college football would be the teams followed.

By the way, prior to Nick Saban, it's not like UA football was chopped liver. It had one of the highest profile football programs in the nation prior to Saban.

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Jun 30, 2017

Its entirely possibly Lane Kiffin was responsible for recruiting the random females from DC.

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Jun 30, 2017

You know one person who goes there. I know about 50. I know people on scholarship from out of state, I know people who aren't on scholarship, I know transfers, I know in state kids. I have asked a lot of them why Bama, and have heard varied responses. But you knowing one person is definitely more first hand knowledge.

I understand your thought process, and it is a mix of both. While giving scholarships is helping a lot too, it is not the only factor.

Yes football was great before him, but he is also in the era of social media, TV, etc. where the technology has made easier access to view the success of his program. And Nick has always been captivating, winning, and selling the program/school.

Jun 30, 2017

Dachshunds are you sure you're not an Auburn fan? Haha F*CK AWHBURN

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Jun 30, 2017

I would be interested to see how all of those stats compare to other schools over the same time frame (I don't want to personally do it). I would imagine quite a few schools across the country have increased their attendance and tuition over the last 10 years. Even taking into account the rise in out of state students I would imagine Alabama tracks pretty close to a lot of other big state schools.

Since federally backed student loans have become the norm the higher price of out of state tuition has become much less of an issue than it was before when people were working summer jobs and part time jobs during the school year to pay for school.

I do agree in general though that having a really good football team really helps out with school branding on a national scale though.

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Jun 30, 2017

It would be interesting to see that data. I am not doing it either though haha.

Thank you for that last sentence. It was my entire point in this thread.

Jun 30, 2017

While I do think Alabama's dominance on the football field has put the school on the map for a lot of prospective students who otherwise wouldn't consider attending, it's debatable whether it was the most important factor for attracting growing hordes of "out-of-state" students and the more academically distinguished (as measured by GPA/SAT/ACT).

Your average national merit scholar doesn't give two shits about the football program; they came for the full-ride scholarship and free MacBook.

You could say that Alabama football has brought in more revenue, thus funding these generous scholarship pools. But, we also need to do a cost-benefit analysis of the football program in general. Millions come in through television deals, merchandise sales, ticket sales, sponsorships, increased enrollment, etc., but millions are also spent on state-of-the-art facilities, weight rooms, trainers/other supporting personnel, travel, maintenance of facilities, etc.

Factoring all of this in, I think Saban's contract is probably a fair appraisal of his worth - not necessarily a vast undervaluation.

Jun 30, 2017

While I can't speak for Alabama specifically on this, I've seen stats that for big football schools, the football revenue basically subsidizes other sports at the school even when taking all of that into account. Same could be said for big basketball schools (Duke/UNC/etc where their basketball teams are the money makers).

If you look at just ticket sales, $113/ticket x 100,000 seats x 7 home games = $79M. That doesn't even take into account money from TV, concessions, merchandise, or the donation that season ticket holders have to make just to be able to buy tickets. Where I went to college it is a minimum of $400 donation to be able to buy season tickets and you'll still be up in the nose bleeds for years. There are people that easily donate $5k+ each year for seats and a good tailgating spot.

Jun 30, 2017

Yeah, but how much was spent to gain that $79mm in ticket sales?

Jun 30, 2017

Never thought Alabama would get so much interest on this site

Jul 7, 2017

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