Contracts: Master Class

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Contracts: Master Class

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Initially, I was going to entitle this weekend’s Essay: “Contracts 101”. The complexities of trying to get Coach Prime’s contract extension deciphered, however, makes this more of a graduate level course.

Let’s dig in …

“Just Pay the Man!”

Of course, the easiest solution for the sanity of the Buff Nation would be for Coach Prime to tell CU athletic director Rick George what he wants, and Rick just signs a blank check.

Done and done.

After all, there is no coach not named Nick Saban who could possibly have come in and done what Coach Prime has done for the University of Colorado the past two years.

Not only did Deion Sanders take a woeful 1-11 program and turn it into a nine-win team in two seasons, he also brought CU a Heisman trophy winner, sold out Folsom Field on a weekly basis, and had CU games broadcast on nationally television games every weekend.

What’s even more important, though, in the long term, is that Coach Prime has made Colorado football, at a time of great upheaval in the sport, relevant.

Two years ago, seeing CU banished to the “Pac-3”, or perhaps to some form of a revised Mountain West Conference, was not out of the question. You add up all of the fans who watched the Buffs play on television in 2022, and the grand total of all 12 games wouldn’t add up to the total who watched any one of CU’s 2024 games.

CU was so far from being relevant that being named the No. 1 team in the CBS and ESPN “Bottom 25” and “Bottom Ten” wasn’t an insult … it was a reflection of where the program was nationally.

So, CU, don’t over think this one …

How can you put a price tag on what Coach Prime has done? Just pay the man!

But, it’s not that easy … 

Rick George is in a tough spot financially.

Sure, the CU athletic department budget is up over $140 million, and actually had a $8.2 million profit in Coach Prime’s first year (FY ’23-24), but that still only makes Colorado an “average” Power Four program in terms of revenue.

And it’s about to get much more difficult to balance the budget.

The House settlement is about to kick in (the Judge in the case is expected to approve the settlement in April). Under the agreement, schools are going to be shelling out about $20-$22 million per year,

So, revenues are up, but so are expenses … and that’s before we even start talking about how much more it will cost to keep Coach Prime and his assistants.

But what about all the new revenue Coach Prime is generating?

Believe me, there is no one who is happier to see Folsom Field sold out than me. It’s been a long, sorry run of having thousands of empty seats for home games over the past two decades.

But, even the extra ticket sales aren’t pushing the needle as much as we might hope.

CU brought in a record $31.2 million in ticket sales in 2023, and likely had a similar haul this past season,

The extra dollars would be enough money to make me and my family happy for generations, but its not enough to balance the books at the Champions Center.

But what about the added merchandise sales? Concessions? Parking? The extra national media attention?

Yes, there is added revenue in all of the categories associated with CU’s rise in the eyes of the nation, and that’s all good, but still pennies on the dollar in terms of financial needs.

Being on national television is great for exposure, but that doesn’t automatically translate into additional revenue. Television contracts are signed years in advance, and the money goes to the conference, which is then divided between the schools. It’s great for CU to no longer its games broadcast in the wasteland of the Pac-12 Networks, but that doesn’t immediately change CU’s financial outlook.

What about the University and the Boulder community? Shouldn’t they be kicking in? 

No argument there, and I’m sure the case is being made by Rick George to those constituencies on a daily basis (and, truth be told, might be part of Coach Prime’s strategy – getting CU and its donors to understand how vital it is that the entire Buff Nation be a participant in raising funds).

We’ve all heard about how the number of applications to CU has gone through the roof since Coach Prime arrived, with especially large jumps in the number of minority applications to the University.

New Chancellor Todd Saliman is pro-athletics, and understands how the football program is the front porch of the University. This past year, according to a report by YahooSports, overall athletic department revenue included a school-record $31.9 million in allocated funds from the university in the form of direct institutional support ($27.1 million), indirect institutional support ($3.1 million) and student fees ($1.7 million). Without that, Colorado still would have posted record generated revenue but not nearly enough to keep up with its reported expenses.

“Institutional support was provided to help offset shortfalls in conference distributions as well as costs related to legal settlements caused by conference realignment,” said a statement from Colorado athletic department spokesman Steve Hurlbert. “This support consists predominantly of auxiliary reserves and does not include any tuition or state funds. As we begin a new era in college athletics that is unprecedented in our history, the university will continue to explore long-term funding options for intercollegiate athletics in order to best position CU for success amidst a constantly evolving landscape.”

So, much to the surprise and delight of Buff fans who have often seen the campus community as a adversary instead of an ally, the University is helping the athletic department fund its ever-expanding budget.

An equally strong case can be made for the Boulder business community kicking in more to help keep Coach Prime in Boulder. The economic impact of a successful football program under Coach Prime is undeniable. The hotels, restaurants and bars of Boulder all owe a huge thank you to the Buffs for all of the extra revenue generated the past two years.

But, as with any other windfall, people tend to look inward first. Bars might be hiring additional staff, paying them better wages, and fixing the freezer in the back with the extra revenue. They surely appreciate all that Coach Prime and CU brings to their businesses, but not everyone is Pasta Jay.

So, how does this play out? 

Yes, there is ego involved in getting a contract with as many dollars as possible, but how do you pay Coach Prime what he is worth? Several talking heads this past week indicated that Coach Prime should be compensated in the range of $10 million per year.

This past season, there were seven college football coaches who received over $10 million in salaries (USA Today report), with Georgia’s Kirby Smart topping the list at $13.3 million.

The highest-paid Big 12 coach was Mike Gundy, at $7.7 million (17th nationally). Coach Prime, at $5.7 million, was fourth in the Big 12, and 38th nationally.

Recently, Arizona State’s Kenny Dillingham received a nice raise, from $3.9 million to $5.8 million. Of course, all Dillingham did was win the Big 12 title and come within a few plays of earning a spot in the semi-finals of the College Football Playoffs.

Is Coach Prime worth $10 million a year?

To the Colorado football program and the Buff Nation, the answer is certainly “yes” – if it was that easy.

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Coach Prime is a smart man.

He understands his value to Colorado. He also understands the limitations Rick George has in terms of getting a contract done in terms both parties can live with going forward.

But can CU afford to pay Coach Prime what he is worth?

Perhaps the better way to phrase the question … Can Colorado find a way to (financially) be an actual player on the national stage?

Coach Prime wants to be recognized as one of the best coaches in college football. His bringing CU to from obscurity to relevance is undeniable, but can he take CU to the next level?

There are many factors involved for Coach Prime to get what he does want … a national championship.

He needs to be able to attract – and retain – quality assistant coaches, and that costs money.

He needs to be able to attract – and retain – quality players, and that costs money.

Colorado and its fan base desperately want to remain relevant in the national picture. When the next round of realignment musical chairs begins – likely towards the end of the decade, when current television contracts start to expire – the Buff Nation wants CU to have a place at the table.

If Coach Prime leaves for the NFL – and does so late in the hiring cycle, like Midnight Mel Tucker did in 2019 – CU will be in a world of hurt. A sizable chunk of the roster will leave for greener pastures come the April Transfer Portal, with precious few quality players available to replace them. The coaching staff will also disperse, taking better paying (and now higher profile) positions elsewhere.

In short, we’ll be right back to where we were at right during the Karl Dorrell era.

If Coach Prime leaves for the NFL, CU will revert to national irrelevance, and it won’t take long. Colorado v. TCU was must-see TV in 2023… it won’t be must-see TV in 2025 without Coach Prime on CU’s sidelines.

It may be true that Rick George can’t afford to give Coach Prime the contract he desires, a contract Coach Prime feels he needs to field a successful program.

But we know for a certainty that Rick George can’t afford to let him go.

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This post, about the Postseason game, from the 2024 Season, is filed under Article.
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