Coaches’ Pay

Chad Smith was the coach of Easley High’s football team for the past three years. He had an impressive 29-9 record. The year before he got the job, EHS had a 1-10 record. Smith and his staff turned that football program around. In January, Smith was hired by Clover High School in York County, South Carolina.

Smith is 33, and has a 4 year teaching degree. Looking at the teacher pay scale which is based on degree and years of service, my guess is he was paid only in the high 30’s as a teacher. Head football coaches in Pickens County are paid a $9,187 supplement, so total he probably made in the high 40’s. With a wife and 4 children, my guess is compensation was a key factor. Understandable.

The immediate charge I heard from some was the district/ board doesn’t value sports. I disagree. I think the issue was which sports priorities were the highest?

The board heard years ago it was all about buildings, buildings and more buildings. Basically the board was told if it puts hundreds of millions into buildings/ facilities, all will be solved.

In response and encouraged every step of the way by the district administration and many district employees, the school board launched a massive $377.8 million building program. Of that, $32 million was spent on high school sports facilities. The football stadiums alone cost $14 million or $3.5 million each. Money, lots of it, was spent on sports facilities.

There are consequences to all that spending on facilities. Consequences the district leadership, principals and the most vocal employees did not think through. One such consequence is now becoming apparent, and I warned about it at the time. The building program is sucking up much of the extra money in the system, so that money can no longer be spent on other things, like higher coaches’ supplements, teacher pay raises or more guidance counselors.

Annual Buildings Cost:To pay for the $377.8 million building program, the money had to be borrowed. As a result, the district’s annual bond payment rose by $17 million (from $8 million to $25 million).

Additionally, there has been and still is a rising cost to staff, run, clean and repair all the extra square footage. Thus far, that has added $955,000 in utilities costs, $250,000 in more maintenance personnel and another $450,000 to run and staff the extra school (Chastain Road). Property insurance costs have risen about $300,000 since the start of the building program too.

Next year the district will add a second middle school in Easley (J. C. Brice) and that school will cost an additional $700,000 a year to run and staff. A bigger Pickens Middle is coming on line too. As the warranties of the new schools are running out, the repair costs for the new schools are starting to hit the books.

When all the additional costs are absorbed, it will cost nearly $3 million a year to operate the 900,000 extra square feet the building program is adding. Doing the math, that’s an extra $20 million a year in building costs -- $17 million in extra bond payments and $3 million in additional costs to run the buildings. Couple that with the downturn in the economy (the Great Recession), and there is not lot of extra money for anything else.

That is chewing up most of the extra money, and whatever is left over is being diverted to mandated costs that are rising at an alarming rate like medical costs (about 8% to 10% a year). Retirement costs are rising at about the same rate.

That’s the weight that hangs over every financial decision the district is faced with. Slowly we are trying to dig our way out from under this buildings rock, but it will take years.

The school district pays its coaches equally, regardless. A hypothetical example will illustrate the point. Let’s say one of Pickens County’s football teams goes 11-0, and the other three football teams have 0-11 seasons. All four head coaches would still be paid the equal amount of $9,187. If the 11-0 team generates a pile of revenue for his school/ sports program by additional ticket sales, advertising sales and playoff games on the way to the state title, and the three 0-11 teams don’t, still all the coaches are paid $9,187 each.

Naturally, supporters of the 11-0 team will say, that head coach and his coaching staff deserve to be paid some of that extra revenue they have generated for the school. Additionally, schools from other districts will see the success of that 11-0 coach and say we want him here, and they’ll offer the 11-0 coach higher pay, supporting the notion he should be paid more than the 0-11 coaches.

In the school system, the coach goes 11-0 and the others that go 0-11 are paid the same. With minor variations, the administration, teacher and support pay scales are that way too. Employees are not rewarded based on performance. People aren’t going to like me saying this, but the pay scale in the public school system is quite socialistic and that is one of the reasons why it doesn’t work well.

If the district wants to retain that 11-0 coach, it will have to pay him more. No ifs, buts or ands about it. However, under the school district’s equal is fair system, the only way to raise the 11-0 coach’s pay, is to give an equal raise to the other head football coaches in the district who had 0-11 seasons.

Let’s say the 11-0 coach is being offered $30,000 more to go to another county, the district would have to give him a $30,000 raise to retain him, plus pay the three 0-11 coaches a $30,000 raise too, so the total cost to retain the 11-0 coach would be $120,000 in this illustration.

Naturally, the assistant football coaches of all four teams would say, with the head coaches receiving such large raises, we should get more too. Then the basketball coaches and baseball coaches would make a similar case because it would be unfair to pay football coaches nearly $40,000 a year, and the basketball coaches about one-seventh of that.

In a system where equal is the only way to make things fair, every coach would receive a proportional raise whether their teams brought in more revenue or none at all. Under the equal is fair philosophy, all would all have a good case. In this hypothetical illustration, you can see how the cost to retain the 11-0 coach could easily reach $200,000.

Like I said, the new buildings and things like rising medical costs are sucking up most all the extra budget money that this frail economic recovery is generating. Naturally, the district/ board is going to balk at giving anyone one coach a significant pay raise to retain him.

Under the system of “equal is fair”, to pay one coach more, all have to be paid more. If the district doesn’t have the money to do that, no one gets a raise and the best coaches leave. This dynamic will make it difficult to improve any of the district’s sports programs over time.

When revenue generating sports teams like football, baseball and basketball win games, they sell more tickets and advertising. This generates more revenue for that high school’s sports program and moves those programs closer to self-sufficiency and less reliance on the general fund budget.

From a budget point of view, the district wants its sports teams to win and generate a boat load of revenue, so those sports programs will not require any or much money from the general fund budget. That leaves more money in the general fund budget to be spent on the district’s primary purpose of educating students in math, English, science and social studies.

Some coaches produce better results and hence generate more revenue for their schools. The district has an equal is fair philosophy when it comes to paying coaches. Hence, if the district wants to raise the pay of the coaches who are performing better, it must raise the pay for all. That’s very expensive. Any extra money the district has coming in, is being sucked up by things like buildings and rising medical costs. Hence, no coaches get raises and the best coaches leave. This hurts the high schools ability to win and generate more sports program revenue. In turn, the high school sports programs need a heavy subsidy from the general fund to pay their bills, and there is less money for classroom education activities.

Some say, if you need more money, well, just raise property tax rates. Tax rates were raised 39 mills in 2007, 2 mills in 2010 and another 2 mills in 2011. How much more of a burden does the district want to put on businesses and individuals in this county? That option has been used up already — tax rates are too high now.

Having worked in the private sector, I never bought into the equal is fair philosophy. Those who are responsible for bringing the sports revenue should be paid more than those who aren’t. In my book, there is nothing fair about paying the 11-0 coach whose team is generating all sorts of new revenue for his school, the same as the 0-11 coach who is not. That’s not fair, nor is it wise. Like I said, if you don’t pay the high revenue producers more, they leave.

For the 2011-12 school year, I floated the idea of modifying the coaches’ pay system. In this initial proposal coaches were be paid a base pay from the district’s general fund, plus a bonus by their school that was based on how many games they won. The district’s general fund didn’t have enough extra money, so the money to pay higher coaches supplements to anyone would have to come from the school.

“We can’t pay those who win more than those who don’t,” those in opposition said. The idea was dismissed out of hand, so nothing was done that year.

For 2012-13 the proposal was modified after talking with other board members and some of the athletic directors. All coaches and assistant coaches would be paid their supplement from the general fund. At the end of the year, from the profits the school made on sports, the school could award an across the board bonus to all its coaches at that school. That bonus had to be approved by the athletic director, principal and the superintendent to insure the bonus payout was not excessive.

For example, let’s say Pickens High’s sports revenue for 2012-13 is $200,000, and its expenditures are $150,000, and it makes $50,000 profit. The school will be able to award a percentage bonus to all coaches based on their supplement. Let’s say PHS wanted to put $10,000 of that profit aside for bonuses and that worked out to a 20% bonus for all coaches. The head coach making $9,187 would get a $1,837 bonus. The Cross Country coach making $1,270 would get a $384 bonus. Not a lot, but a step in the right direction.

The better each team is coached and the more aggressively the school sells tickets and advertising at their sporting events, the more revenue the school will generate and the more money they’ll have to pay bonuses.

I felt within a school the higher percentage bonuses should be given to the coaches of the teams that generate the most revenue, but the lawyers shot that down. Thus, within a school the percentage bonus had to be the same for all coaches in all sports.

The board approved that plan for this school year. Schools that make money in their sports program will be able to pay such bonuses at the end of this fiscal year in July 2013. Schools that don’t, won’t be able to pay such bonuses.

This is a one year plan. One that employs a private sector/ capitalistic approach to solving the low coaches pay problem. Many in the system opposed the idea.

The athletic directors of Liberty and Pickens were against the plan. (They said so in a public meeting, so I repeat what they were very outspoken about.) Their feeling was it is not fair to pay the football coach at XYZ high school more than a coach at another school. My thought was, their team wins more games and they do a better job of selling ads and generating revenue. The coaches at that school play a major role in that, so they should be paid more. Do the same at your school, and you will be able to then pay your coaches more. They had all sorts of reasons why they couldn’t do that.

Many others in the system opposed the idea too. Their common response was the pay isn’t fair unless it is equal — all the coaches should be paid more. They also said that money should come from the general fund and not the school’s sports programs. That was not possible, because there is little extra money in the general fund and that extra money is being sucked up by things like rising building costs and medical costs. Well then, their response was, if we can’t pay them all more money, and the general fund doesn’t have the money, no coaches should get pay raises.

Like I said, the board passed the plan for 2012-13 only. We are trying it for a year. Likely, the one year experiment in paying coaches bonus from their school’s sports program profits will be just that, one year. There have been no other alternatives put forward, so coaches’ supplements likely will remain low.

The public school system is glued to the notion that all must be paid the same. If anyone in a class of employees gets a raise, all in that class must get the same raise. If the money isn’t there to pay all of them raises, then no one gets a raise.

There is an obvious problem here — low coaches supplements and limited general fund money. Yet, the system can not come up with an innovative way to solve the problem. If anyone tries to put forth such an innovative solution, the system fights it.

This is just another example of why I have been saying for years the public education system needs massive reform, not only in the way it pays coaches, but in the way its deals with problems. Often the system can not solve obvious problems short of throwing tons of money at them. Well tons of money sloshing around in the system no longer exists, so many problems just linger and linger. Innovative solutions must be undertaken. That requires change and an openness to new and more effective way of doing things.