ESPN's Medcalf on Coach K's salary: "That’s Lil’ Wayne money."

[Selover]

I didn't see this posted anywhere yet so I figured I'd share.

http://espn.go.com/blog/collegebasketballnation/post/_/id/84629/coach-k-made-nearly-10-million-in-2011

I thought this was an interesting article since there's been a lot of debate about athletes receiving compensation, but I think Medcalf's closing arguments are a bit off.

[UrinalCake]

Interesting that Pitino made almost as much - 8.9 million compared to K's 9.7. Somehow I don't think we'll hear as many people complaining about that, but if you were to try to quantify a coach's value to a school, I'd have to think K's would be higher. Also note that over half of K's salary was incentive-based. If he'd had an NIT season like some other coaches we know, I wonder what his salary would have ended up being...

[-bdbd]

This topic already being discussed over at the "Coach K at Fort Lewis, WA" thread...

[DesertDevil]

Pretty sure this is deserving of it's own thread.

My first thought was considering Duke is a private institution, the gentleman who release this informations better have had K's permission or he may be looking for a new job.

Overall, the article is crap IMHO.

[uh_no]

Pretty sure this is deserving of it's own thread.

My first thought was considering Duke is a private institution, the gentleman who release this informations better have had K's permission or he may be looking for a new job.

Overall, the article is crap IMHO.

Had nothing to do with K giving permission....it's required for institutions to make certain information available for the top earners or earners above a certain amount.....which is the case here....

[Bluedog]

Had nothing to do with K giving permission....it's required for institutions to make certain information available for the top earners or earners above a certain amount.....which is the case here....

Right, for non-profit institutions, which Duke is.

[jgehtland]

Hmmm. I'm thinking that some of these college basketball beat reporters for ESPN ought to start giving back their own salaries if this is the argument. I mean, hey, they are making money off these kids every bit as much as the coaches, and moreover, aren't helping them in any way. So where's that moral outrage now?

[licc85]

This is ridiculous, it's like he's blaming Coach K for how screwed up the NCAA is. It's pathetic. On top of that, Duke players in the NBA are making more money than players from any other school. I'd say Coach K is helping our players maximize their earning potential by teaching them the values of work ethic, leadership, and fundamentals while they are under his tutelage. Sure, they don't make a dime while they are in school, but I think the lessons players learn from Coach K add a ton of value to their professional careers, and they end up making more money because of it. There goes all of my respect for both Eamonn Brennan and Medcalf.

[DesertDevil]

Right, for non-profit institutions, which Duke is.

Ah, didn't realize that.

[OldPhiKap]

Right, for non-profit institutions, which Duke is.

Perhaps you mean "private," as opposed to public?

Public schools answer to the State. Public companies answer to the investing public. Private institutions only answer to the stakeholders (in this case, I assume trustees).

Duke generates plenty of excess profit, but it does not distribute it to shareholders.


In any event, K generates more revenue and Blue Sky good will value than what he is paid. It is win-win for K and Duke.

[roywhite]

In any event, K generates more revenue and Blue Sky good will value than what he is paid. It is win-win for K and Duke.

Indeed; a man so identified with an institution that he's virtually the K in D-U-K-E.

[gus]

Perhaps you mean "private," as opposed to public?

Public schools answer to the State. Public companies answer to the investing public. Private institutions only answer to the stakeholders (in this case, I assume trustees).

Duke generates plenty of excess profit, but it does not distribute it to shareholders.

Not sure what you're objecting to. That Duke is a private institution is irrelevant to the discussion, as they are a registered not-for-profit and thus subject to certain disclosure laws, one of which involves the salaries compensation of top earning employees.

[Mike Corey]

Coach K makes $10 million?

Bargain.

[UrinalCake]

I thought they said in the article that they obtained the salary information from tax records, which are public.

And the real outcry should be over the fact that Lil' Wayne makes $10 million. That guy is awful. People think Coach K is overpaid, yet dropping your pants and rapping about thug life is ok?

[SoCalDukeFan]

Coach K makes $10 million?

Bargain.

According to the LA Times USC paid Kevin O'Neill about $1.7 million. Coach K is worth at least 10 times KO (and I am being very generous to KO here.)
So $17 million minimum.

http://www.latimes.com/sports/college/usc/la-sp-usc-taxes-coaches-20130517,0,2560590.story

SoCal

[Ichabod Drain]

I thought they said in the article that they obtained the salary information from tax records, which are public.

And the real outcry should be over the fact that Lil' Wayne makes $10 million. That guy is awful. People think Coach K is overpaid, yet dropping your pants and rapping about thug life is ok?

Lots of people find college basketball entertaining and lots of people find rap entertaining. There's money to be made in both. Ask anyone who doesn't follow sports about Coach K's salary and they'd probably say something similar to what you said about Mr. Carter. (except the whole dropping your pants thing, though I would say Coack K lives a pretty thug life)

[cato]

I thought they said in the article that they obtained the salary information from tax records, which are public.

And the real outcry should be over the fact that Lil' Wayne makes $10 million. That guy is awful. People think Coach K is overpaid, yet dropping your pants and rapping about thug life is ok?

His criteria compared to your career just isn't fair.

(I wonder if K appreciates Lil' Wayne's art more than you?)

[wilko]

Coach K makes $10 million? Bargain.

I don't understand why folks are "meat-peeping" on K's money.
I'm sure he is competitively compensated as compared to other coaches with 4 National Championships

[Selover]

His criteria compared to your career just isn't fair.


Nailed it lol

[uh_no]

I thought they said in the article that they obtained the salary information from tax records, which are public.

And the real outcry should be over the fact that Lil' Wayne makes $10 million. That guy is awful. People think Coach K is overpaid, yet dropping your pants and rapping about thug life is ok?

Yes. The disclosure rules are about non-profits reporting compensation of top earners on their tax filings.....the point is they are forced to put that information in their taxes, and it is not voluntary for K or the university.

[Atlanta Duke]

Not sure what you're objecting to. That Duke is a private institution is irrelevant to the discussion, as they are a registered not-for-profit and thus subject to certain disclosure laws, one of which involves the salaries compensation of top earning employees.

FYI is the link to the Form 990 in which compensation to K and other key employees is disclosed

http://ftpcontent5.worldnow.com/wncn/pdf/DU.pdf

Next highest paid employee/officer appears to be the chief investment officer with salary and bonus of $2.5 million - President Brodhead was paid $1.175 million, Coach Cutcliffe was paid $1.9 million and AD White was paid $925,000 (see pp. 7-10 of 116 of Form 990)

[Wander]

I don't understand why folks are "meat-peeping" on K's money.
I'm sure he is competitively compensated as compared to other coaches with 4 National Championships

Well, I think generally the issue that people have is that athletic coaches shouldn't be paid this much money on an absolute scale - not that Coach K makes too much relative to his peers.

[hurleyfor3]

Well, I think generally the issue that people have is that athletic coaches shouldn't be paid this much money on an absolute scale - not that Coach K makes too much relative to his peers.

The bigger issue is that people envy success.

[Indoor66]

The bigger issue is that people envy success.

and impose their values/views on that success.

[CLW]

The bigger issue is that people envy success.

Indeed and want to redistribute that success to less successful individuals.

It also smacks of hypocrisy for Medcalf himself to earn a living off of these "poor" student-athletes yet neither he nor his employer are apparently willing to pony up their own money to pay the student-athletes either.

[OldPhiKap]

"Meat-peeping"?!?

Damn, I'm old.

[moonpie23]

gotta agree with wilco's point.....

how much are they paying OTHER Coaches with 4 rings, 2 olympic golds?

[Atlanta Duke]

Indeed and want to redistribute that success to less successful individuals.

It also smacks of hypocrisy for Medcalf himself to earn a living off of these "poor" student-athletes yet neither he nor his employer are apparently willing to pony up their own money to pay the student-athletes either.

There is more going on with regard to concerns regarding the compensation levels of big time college sports coaches than wanting to advance agendas for redistributions of income downward

As was noted in a Knight Commission article in 2009

The nonprofit status of higher education is based on their performing a social good, education, as charitable organizations. Because of their status, colleges and universities do not have to pay corporate income taxes.

In 1950, Congress passed laws requiring that a nonprofit's business enterprises be substantially related to its charitable mission

http://knightcommission.org/index.php?option=com_content&view=article&id=445:december-26-2009-should-college-sports-remain-as-tax-exempt-nonprofits&catid=1&Itemid=11

In its Form 990 the mission of Duke University is stated to be "to provide a superior liberal education, to prepare future members of learned professions, to advance the frontiers of knowledge, and to help those who suffer, cure disease, and promote health."

http://ftpcontent5.worldnow.com/wncn/pdf/DU.pdf (p. 95 of 116)

Athletic departments arguably have evolved into side businesses of major universities that basically channel their revenues back to the athletic department (as evidenced by the salaries paid to the most successful college coaches as compared to other key university employees). Accordingly, a 2009 Congressional Budget Office report raises the issue of whether that situation advances the stated mission of the university that justifies the tax exempt status of the athletic department and classification of contributions to the athletic department as charitable contributions

http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/100xx/doc10055/05-19-collegiatesports.pdf
http://www.statesman.com/news/news/state-regional/does-big-time-college-football-deserve-its-big-t-1/nRbKy/

In other words, if a university wants to pay its coaches at levels equal to or exceeding those of professional sports teams that may be justified by market forces but may constitute unjustified preferential treatment under the tax code.

[loran16]

Medcalf's point is the same one that is made all the time: Coaches and similar individuals make big dough on college sports - the athletes who perform make basically nothing (a 40K per year scholarship). This is especially the case at Duke where say jerseys with athlete's #s and the athlete's performances on TV make Duke a profitable BBall enterprise, though the athletes won't get any.

Medcalf isn't saying K doesn't deserve 10 M compared to other coaches. He is making a point - a reasonable one - that the inequities of college bball are painful to watch.

[jgehtland]

Medcalf isn't saying K doesn't deserve 10 M compared to other coaches. He is making a point - a reasonable one - that the inequities of college bball are painful to watch.

Concur entirely; he's still being a raging hypocrite. His bio on ESPN.com lists him as "ESPN.com college basketball writer". Every penny he earns is based on the efforts of those athletes he is citing in his article. Without their athletic talents, he *does not work for ESPN*. He doesn't cover professional sports, or even all college sports. He's the college basketball writer.

So why does he himself escape his own outrage?

[loran16]

Concur entirely; he's still being a raging hypocrite. His bio on ESPN.com lists him as "ESPN.com college basketball writer". Every penny he earns is based on the efforts of those athletes he is citing in his article. Without their athletic talents, he *does not work for ESPN*. He doesn't cover professional sports, or even all college sports. He's the college basketball writer.

So why does he himself escape his own outrage?


wait, what? He's a Journalist. This is what journalists do. If the NCAA gave all the money it made and all the schools made to charity, a journalist would still be paid to write about the NCAA even though the athletes weren't being exploited.

There really isn't a parallel here - unlike the Coach and the Athletics programs and the NCAA - the journalist doesn't actually USE the players. He's not the one luring them to schools. There is no comparison.

EDIT: Alternatively, I'd point out journalists write about news. A journalist isn't "Exploiting" the news in any way - if a journalist writes about a tragedy (pick any one), he is not exploiting that. There is ZERO hypocrisy here

(Also, as a non famous journalist, Medcalf is probably making roughly the same amount as the guys who are playing for these teams (the value of the scholarships)).

[CLW]

wait, what? He's a Journalist. This is what journalists do.

Schools have had athletic teams represent their universities in this country since before the U.S. even had a Federal Income Tax or even before the Civil War. This is what universities do.

Indeed, as your Knight Commission report notes the IRS has accepted "that athletics are a genuine part of the educational experience."

If you/others such as Mr. Medcalf do not like the current law of the land there is a process to change it.

Metcalf/ESPN do "use" the players. They use them to generate traffic to their articles/website, watch their t.v. shows (including one dedicated solely to college athletics -- ESPNU) and buy products from their own shop.

http://www.espnshop.com/family/index.jsp?categoryId=3109841&cp=.4471948.715943

(Duke #30 for sale for $120 or $60).

To argue that Medcalf/ESPN isn't being a hypocrite when he and his employer (ESPN) make millions off of college athletics just doesn't hold water.

[brevity]

Well, I think generally the issue that people have is that athletic coaches shouldn't be paid this much money on an absolute scale - not that Coach K makes too much relative to his peers.

Deadspin has an infographic (http://deadspin.com/infographic-is-your-states-highest-paid-employee-a-co-489635228) that shows how, in 40 of 50 U.S. states, a college coach is the highest paid state employee. So it seems quite common among public universities.

[Lauderdevil]

The other thread of Medcalf's argument that doesn't hold water is this one:

"Coach K makes nearly $10 million and the players who’ve fueled his success -- and escalating income -- get nothing beyond tuition, room and board."

Nothing? I think if you asked most of his former players, they'd say they got more than just classes, dorm and food out of their college experience -- and an enormous part of that is the opportunity to be mentored, coached, and led by Coach K. And that's not just during their time at Duke; it's over a lifetime.

That's not to say players aren't deserving of some payment; that's a complicated one. And how our society allocates rewards to people (a soldier makes $30K, a teacher makes $45K, the president makes $400K, Coach K $10 million, the average Fortune 500 CEO $12 million, Kim Kardashian $18 million, Li'l Wayne $27 million, Tim Cook $378 million*, average sub-Saharan African $470) is hard to defend.

So just focusing on the narrow issue of Medcalf's assertion, I'd suggest that the life of a Duke basketball player is not exactly the monkish, benefit-free one Medcalf describes. Whether it's fair compensation for the value creation they enable, I'll leave to someone else.


* [in 2012; stock price has dropped dramatically since]

[BigWayne]

There is more going on with regard to concerns regarding the compensation levels of big time college sports coaches than wanting to advance agendas for redistributions of income downward

As was noted in a Knight Commission article in 2009

The nonprofit status of higher education is based on their performing a social good, education, as charitable organizations. Because of their status, colleges and universities do not have to pay corporate income taxes.

In 1950, Congress passed laws requiring that a nonprofit's business enterprises be substantially related to its charitable mission

http://knightcommission.org/index.php?option=com_content&view=article&id=445:december-26-2009-should-college-sports-remain-as-tax-exempt-nonprofits&catid=1&Itemid=11

In its Form 990 the mission of Duke University is stated to be "to provide a superior liberal education, to prepare future members of learned professions, to advance the frontiers of knowledge, and to help those who suffer, cure disease, and promote health."

http://ftpcontent5.worldnow.com/wncn/pdf/DU.pdf (p. 95 of 116)

Athletic departments arguably have evolved into side businesses of major universities that basically channel their revenues back to the athletic department (as evidenced by the salaries paid to the most successful college coaches as compared to other key university employees). Accordingly, a 2009 Congressional Budget Office report raises the issue of whether that situation advances the stated mission of the university that justifies the tax exempt status of the athletic department and classification of contributions to the athletic department as charitable contributions

http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/100xx/doc10055/05-19-collegiatesports.pdf
http://www.statesman.com/news/news/state-regional/does-big-time-college-football-deserve-its-big-t-1/nRbKy/

In other words, if a university wants to pay its coaches at levels equal to or exceeding those of professional sports teams that may be justified by market forces but may constitute unjustified preferential treatment under the tax code.

That is really a separate and interesting discussion. The point in this particular news event is that it ties in with the whole envy/hate of Duke basketball. The people that are likely to buy into hate/envy of Duke are also ones that are prone to buy into general $$ based envy/hate, so it makes it a good news story for that audience.

[Des Esseintes]

The other thread of Medcalf's argument that doesn't hold water is this one:

"Coach K makes nearly $10 million and the players who’ve fueled his success -- and escalating income -- get nothing beyond tuition, room and board."

Nothing? I think if you asked most of his former players, they'd say they got more than just classes, dorm and food out of their college experience -- and an enormous part of that is the opportunity to be mentored, coached, and led by Coach K. And that's not just during their time at Duke; it's over a lifetime.

That's not to say players aren't deserving of some payment; that's a complicated one. And how our society allocates rewards to people (a soldier makes $30K, a teacher makes $45K, the president makes $400K, Coach K $10 million, the average Fortune 500 CEO $12 million, Kim Kardashian $18 million, Li'l Wayne $27 million, Tim Cook $378 million*, average sub-Saharan African $470) is hard to defend.

So just focusing on the narrow issue of Medcalf's assertion, I'd suggest that the life of a Duke basketball player is not exactly the monkish, benefit-free one Medcalf describes. Whether it's fair compensation for the value creation they enable, I'll leave to someone else.


* [in 2012; stock price has dropped dramatically since]

Of course the life a Duke basketball player is neither monkish nor benefit-free. But the question that I think is getting largely lost in this thread (though you touch on it briefly) is this: is the system fundamentally equitable? As a thought experiment, let's take Duke out of the equation and just pretend we're going to build college basketball from scratch. If you did that, would it be equitable to give the best coach in the game $10M and his players $480,000, keeping in mind that the players he recruits are also among the best in the game? It's true that the coach is providing life lessons and fantastic training for a potentially lucrative future; in return, the players are providing the coach his sole reason for existing. So, again: is this equitable? It's one thing to compare the pay of soldiers to pop stars, but here we are comparing basketballs to basketballs, so to speak. One can find something unpleasant in this allocation of resources without "hating success."

[NSDukeFan]

Of course the life a Duke basketball player is neither monkish nor benefit-free. But the question that I think is getting largely lost in this thread (though you touch on it briefly) is this: is the system fundamentally equitable? As a thought experiment, let's take Duke out of the equation and just pretend we're going to build college basketball from scratch. If you did that, would it be equitable to give the best coach in the game $10M and his players $480,000, keeping in mind that the players he recruits are also among the best in the game? It's true that the coach is providing life lessons and fantastic training for a potentially lucrative future; in return, the players are providing the coach his sole reason for existing. So, again: is this equitable? It's one thing to compare the pay of soldiers to pop stars, but here we are comparing basketballs to basketballs, so to speak. One can find something unpleasant in this allocation of resources without "hating success."

Another way to look at it might be to ask if coach K trains any of his players to be successful and make good salaries when they leave? Is that something that might make it worthwhile to suffer through the $50K education? Maybe even $10M worth? Interesting discussion.

[bob blue devil]

Another way to look at it might be to ask if coach K trains any of his players to be successful and make good salaries when they leave? Is that something that might make it worthwhile to suffer through the $50K education? Maybe even $10M worth? Interesting discussion.

well i agree the value may be worth it, given the free choice between making a bunch more money now under someone else (insert Calipari joke here) vs. getting a free education and coach k tutelage, we all know most players would choose the former. heck, if it were not the case then there would be far fewer nba early entries. if you believe that only the decision-maker ultimately knows what is best for them, then the answer to your question is it is not worthwhile.

just to add one more piece - $10M of added value would be about $1M per player per year; offer a kid $1M to go play at Davidson and he's most likely going to choose that over duke.

[wilko]

Well, I think generally the issue that people have is that athletic coaches shouldn't be paid this much money on an absolute scale - not that Coach K makes too much relative to his peers.

Its not a Duke issue then, its an athletics issue?
I am not going to get bogged down in pseudo morality other than to say as a state employee Roy and Gott are overpaid. As a taxpayer I am offended.

What I am able to infer from this -
Basketball is important to Duke. Success is important to Duke and they are willing to fund it. Therefore, if the name of the game and rule of the land (not a fan of this assertion - BTW) becomes pay the players- Then I am confident Duke will be in the thick of it in accordance with the rules.

[Lauderdevil]

People seem to yearn for formulas to explain the unexplainable and often irrational way compensation works. How about this one:

Suppose a potential recruit was told: "Come to Duke to play basketball. We have more alumni in the NBA than any other school. You'll play for the greatest coach ever, and he'll help you develop your already enormous athletic ability into an NBA career if that's possible. The deal is, you pay Coach K 10% of your ultimate NBA player salary. You keep the remaining player salary plus all of the endorsements. (Of course you'll have to pay 4% of your player salary plus 15% of your endorsements to an agent you'll meet with five times a year -- or more money in total for about one-one thousandth the time you'll have spent with Coach K developing your skills.)"

Would that be a good deal for the players? Would it be a good deal for Coach K?

For the players, it's probably a pretty good deal. Sure, they have to spend one to four years playing without compensation beyond a Duke degree. But their chances of going to the NBA are greater than going anywhere else. Sure, many of them might have gone anyway -- but they pay that agent about 10% of overall income (not just player salary), and the agent doesn't do anything to make them be a better player. On average, it's pretty sweet -- but of course some make it and some don't, so for some it means no comp at all beyond the Duke education.

For Coach K, let's work the numbers. Duke players made $96.4 million in NBA salary this season. Coach K's 10% would be $9.64 million.

Or almost exactly his actual income of $9.7 million.

[nyesq83]

But he chose to stay with Duke.

[bob blue devil]

People seem to yearn for formulas to explain the unexplainable and often irrational way compensation works. How about this one:

Suppose a potential recruit was told: "Come to Duke to play basketball. We have more alumni in the NBA than any other school. You'll play for the greatest coach ever, and he'll help you develop your already enormous athletic ability into an NBA career if that's possible. The deal is, you pay Coach K 10% of your ultimate NBA player salary. You keep the remaining player salary plus all of the endorsements. (Of course you'll have to pay 4% of your player salary plus 15% of your endorsements to an agent you'll meet with five times a year -- or more money in total for about one-one thousandth the time you'll have spent with Coach K developing your skills.)"

Would that be a good deal for the players? Would it be a good deal for Coach K?

For the players, it's probably a pretty good deal. Sure, they have to spend one to four years playing without compensation beyond a Duke degree. But their chances of going to the NBA are greater than going anywhere else. Sure, many of them might have gone anyway -- but they pay that agent about 10% of overall income (not just player salary), and the agent doesn't do anything to make them be a better player. On average, it's pretty sweet -- but of course some make it and some don't, so for some it means no comp at all beyond the Duke education.

For Coach K, let's work the numbers. Duke players made $96.4 million in NBA salary this season. Coach K's 10% would be $9.64 million.

Or almost exactly his actual income of $9.7 million.

I like this idea - currently the elite players have (not literally, but effectively) to go to school and play for less than they'd make if they were free to enter the nba, but the ncaa could do one better in the pillage department by taxing part of their future earnings for the benefit of its coaches! perhaps the ncaa institutions use it as a way to reduce their coaches salary requirements/keep more money for themselves. it's a win-win! now i assume the coaches keep their royalties whether they do any actual work or not - every time they sign up a kid to go to school, it's a free lotto ticket that you never have to work for again. life is good.

[DukeAlumBS]

I just slammed him with a comment at ESPN and asked him to compare his public education, to one at Duke. He is a gopher!
I hate this stuff in the off season. Especially when you are not able to go target shooting! I don't like this guy either. Since this past year I have grown to hate ESPN.

Nice day my friends,
Jimmy

[DukeAlumBS]

I also asked him the graduation rate of his alma mater and how many academic AA they had. His school is not in the highlights for your information.
Have a nice day,
Jimmy