Few topics generate as much angst across the Pac-12 as the so-called revenue gap — the growing disparity in conference distributions received by member schools compared to their peers in other Power Fives.
This year, for example, the Big Ten will send approximately $20 million more to each member than the Pac-12; the SEC will send about $10 million more to each campus.
The best description of the situation the Hotline has heard came from Oregon athletic director Rob Mullens, who told the Bald Faced Truth radio show in Portland recently that the conference was “drifting out of range.”
In other words, the Pac-12 schools don’t need to match their peers dollar-for-dollar to compete on the field, and they don’t necessarily expect to match their peers dollar-for-dollar.
The disparity in college football fan affinity — with ticket sales and TV ratings being the most glaring examples — puts the Big Ten and SEC on a high revenue tier.
But at a certain point, the difference in revenue becomes so great that Pac-12 schools cannot keep pace on essential matters of infrastructure (facilities, salaries, etc.).
“Resources do matter,” Mullens said. “We don’t have to have everything that everyone else has but we have to remain in a range that makes us competitive.”
I thought of Mullens’ comment last week when news broke that Purdue coach Jeff Brohm had agreed to a seven-year contract for $5.26 million annually.
What is “drifting out of range”?
It’s when the head football coach at Purdue — Purdue! — makes more money than every coach in the Pac-12.
It’s when the salary pool for Boilermakers assistant coaches is larger than those of every program in the Pac-12 except Washington and Oregon.
Brohm is 13-13 in two years in West Lafayette. He used an offer from Louisville (his alma mater) as leverage to sign a killer deal with Purdue.
The issue here isn’t Brohm specifically.
It’s that a third-tier football program in the Big Ten has the cash and the willingness to pay its coach more than the most accomplished coaches at the top programs in the Pac-12.
That’s not to suggest the likes of Chris Petersen, David Shaw and Kyle Whittingham are necessarily underpaid — that they’re getting raw deals from the schools. Not at all.
Rather, it’s an indicator of market forces, of what the Pac-12 must do in coming years to avoid “drifting out of range” financially and, hence, competitively.
Problem is, Pac-12 schools are not in position to keep pace because of financial restrictions that are both unavoidable (the disparity in Tier 1 contracts) and self-inflicted (the struggling Pac-12 Networks).
The Big Ten will distribute about $51 million to its members this year, with the SEC in the mid-$40 million range.
The Pac-12 will send approximately $33 million to each campus.
The rough equivalents to Purdue within the Pac-12, in terms of tradition and brand strength, are Cal, Utah and Colorado.
It’s difficult to envision those universities blowing past $5 million annually to retain their coaches — they simply don’t have the wherewithal.
Nor have the Pac-12 presidents and chancellors indicated they’re interested in trying. If anything, they’ve taken great pride over the years in not paying top dollar for coaches, believing that act would somehow propel the Pac-12 down a path toward skewed mission and broken morality.
(In reality, the morality is already broken, the mission already skewed.)
Brohm’s contract pays an average of $5.26 million annually, but the details make our cross-conference comps devilish.
Assigning annual value to a contract depends on how you allocate more than just the base pay — there are signing bonuses and deferred payments, retention incentives and escalator clauses to consider.
Currently, the highest-paid coach in the Pac-12 in Washington’s Chris Petersen. According to the methodology used by USA Today to compile its stellar salary database, Petersen earned $4.375 million in 2018 and is set to collect $4.625 this coming season.
Brohm’s new deal includes a $1.7 million signing bonus, to be paid in two installments over the next 12 months. Even if we remove the bonus entirely, however, he would still clear more than $5 million per year on average.
(Note: Stanford coach David Shaw earned $4.3 million in 2018, but because of the cover provided by Stanford’s private school status, we don’t know Shaw’s compensation for next season.)
The deal makes Brohm one of the top-paid coaches in the Big Ten, but that status likely won’t last.
It will serve instead to rapidly raise the bar for coaches across the conference, which will fuel the corresponding Power Five markets — not only for head coaches, but the salary pools for assistants, as well.
Will the Pac-12 schools join the fray?
Can the Pac-12 schools join the fray?
And what happens if they doesn’t?
The drift continues.
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