What Can $50 Million Get You in College Sports?

Hey there - thank you for finding this week’s NILnomics and spending some time with us. This week we give college football’s biggest story the NILnomics spin and break down what a $50 million buyout of a successful, long heralded coach looks like. You won’t believe what $50 million can buy you - in a college sports world.

Pour a drink. Get comfortable. Let’s get into it. 🍻 

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You get a scholarship! And you get a scholarship! And…

Like many of you, I was blown away by the news over the weekend that Penn State fired head coach James Franklin after 11 years on the job. The change came amidst a 3 game losing streak (against Oregon in OT, an interim HC lead UCLA, and Northwestern). Given they were a preseason favorite to win the national title, it's a stunning fall for such a heralded coach/team. Even more wild is the reported $50 million buyout Franklin is set to receive. Though not as high as Jimbo Fisher's $75 million buyout from Texas A&M in 2023, it still ranks #2 all time in the history of football buyouts. 

Now for those in the weeds (which is where we operate here at NILnomics) it is reported Franklins contract includes a duty to mitigate clause. This means he has a responsibility to seek another job where, upon hire, Penn State will pay the annual difference between his new salary and the buyout. Given that fact and that the buyout is stretched over several years and not all one lump sum, the decision can be seen slightly more reasonably than one may think originally. 

Still, despite these facts, it can't be ignored that the buyout happened just days after it was reported the Big Ten are set to sell equity in the conference to private capital. The timing was too cute to miss. As I said Sunday and will repeat here just to sum up my thoughts on this:

Now where I want to go with this is putting that $50 million buyout in context. In a college sports, college football, Penn State, Big 10, FBS, and Division I context. Given the mountain of college sports financial data I have at my fingertips, I thought I'd visualize just how much that buyout compares - to everything. So without further ado..

Quick Takeaways:

• Yes - the total amount of athletic scholarships in FY 2024 for Penn State is $24.1 million. Coach Franklin’s buyout could pay for two years of athletic scholarships for Penn State’s 354 male and 245 female student athletes.

• Football in isolation has $6.1 million in scholarships - Franklin’s buyout could pay for them all to have their five years of scholarships with some left over for all 87 players to have money for grad school.

• It’s cool to see Penn State’s ice hockey team up there in scholarship funds. Looks like their new ace is doing great. I wonder how many more superstars all that buyout money could get them - has to be a few right?

Analyst’s Desk

This and all the analysis in this week’s issue comes from the go-to data source, the MFRS data I’ve assembled. Yes, that means the usual public records related caveats apply, but it still gives me sports specific data that is priceless here and elsewhere.

Quick Takeaways:

• It certainly looks like just about the entire MAC’s coaches could be paid for a year for what it’ll cost Penn State to buyout Franklin.

• I love the slide from so many teams in the poorest G6 league (MAC) to the richest P4 teams. Just a natural display of the investment in coaching that goes with the higher conference teams.

• Yes - Ohio State has the highest individual coaching staff wages at $30.5 million and Kennesaw at the bottom with $1.5 million. Again - that’s for the entire staff.

Analyst’s Desk

This data, again, comes from the annual financial reports. I’ll note that I added up the salaries of the entire coaching staffs (including bowl game bonuses) and tried, starting from the most expensive team, to squeeze in under $50 million total. I’m sure I could try to fit more teams to get in under that cap, but this is just a simple illustration. Some conferences (American, Pac-12) I don’t have enough team’s reports to make the total salary hit $50 million.

Quick Takeaways:

• There are, in fact, a few schools that across all sports sell enough tickets to cover a $50 million buyout. Interestingly, Penn State actually sells just enough to pull it off.

• That 20 out of the 26 B1G/SEC schools can afford a buyout of that size with just ticket sales says - something.

• Would anyone have guessed Wisconsin sold more tickets than half of the B1G/SEC?

Analyst’s Desk

This data comes from the Knight Newhouse dataset but is just filtering on ticket revenue for FY 24.

🔉 What I’m Listening To 🔉 

I’m always on the lookout for anyone breaking down college sports and especially the business side of the industry. Here’s this week’s best listens:

• NIL Clubhouse - this episode focused on the state of the College Sports Commission, which is a mess. It’s nice to hear some realism coming to the issue.

Final Thoughts

Thanks for reading this week’s issue.

What a wild few days in college football. I remember staying up late for that overtime thriller with Oregon just two weeks ago thinking that Penn State would come back and make a playoff run. And now Franklin is out on the streets (with a nice $50 million cushion). College football is absolutely wild.

Thanks again for reading. Now finish your beverage 😀 

Until next time,

Greg Chick, PhD

Data Analyst

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