Defending Calipari's salary

A reprint of my April 9 column in the Woodford Sun.


Quite frankly, I’m tired of it.

I’m tired of the hands wringing, the pontificating and the manufactured indignation over John Calipari’s paycheck.

The new University of Kentucky basketball coach signed an 8-year $31.6 million dollar contract to coach some hoops.

Yes, that makes for a big pile of money.

So what?

I’ve heard more than enough complaining over the past few months about how much money other people make. Bank executives, CEOs, AIG employees and Wall Street brokers have all suffered the public’s wrath over their compensation. Now it’s the basketball coaches’ turn.

I have to be honest – I can’t understand why people worry about other people’s pay. Their salary doesn’t take money out of your pocket. It has not one iota of impact on your life. So why get all worked up in a tizzy?

But for many Kentucky residents, John Calipari’s contract represents misguided priorities and a slap in the face as they face difficult economic circumstances. FOX News published an article by Joshua Rhett Miller on its Web site on April 2 titled, Cash strapped states pay millions for basketball coaches. The story encapsulates the frustration many Kentucky residents have expressed about the new UK coach’s pay.

“When Kentucky Gov. Steve Beshear announced in February that his state was taking nearly $3 billion in federal stimulus cash, he described the decision as necessary to save jobs, preserve ‘quality of life’ and a ‘strategic investment ... to position Kentucky for the future.’

“Little did Beshear know that two months later, as teachers, police and other municipal workers breathed a collective sigh of relief that their jobs had been saved — at least for now — the state’s primary institution for higher learning would ‘invest’ $32 million in a well-traveled but highly successful basketball coach,” the article begins.

The piece goes on to chronicle the economic woes facing Kentucky, including budget cuts at the University of Kentucky.

The story makes a compelling argument – the state shouldn’t pay out a huge salary to a basketball coach when budgets are pinched and taxpayers squeezed. But there exists one big problem with this argument – the salary of the basketball coach has no budgetary impact on the University or the state whatsoever. In fact, neither UK nor Kentucky taxpayers contribute one dime to the athletic program.

“Athletics pays full cost for every athletic scholarship and every other expense to operate the department – including utilities and maintenance. UK Athletics is one of a very few athletic departments who are completely self supporting,” DeWayne Peevy, UK associate AD for media relations said.

In other words, UK athletics serves as a revenue center – not a cost center, and the athletic department will pay 100 percent of Calipari’s compensation, including his base salary and all of his endorsements and bonuses.

That fact alone should silence the critics. If the athletic department deems a $31.6 million paycheck appropriate, as an independent, self sufficient department, it has every right to pay it. And for the past six years, the athletic department has run a budget surplus – so it seems pretty difficult to question their judgment.

Not only does the athletic department take no money from the school, it contributes mightily to the institution.

The UK athletics serve as a revenue source for the cash strapped school. According to Peevy, 25 percent of the athletic department budget gets spent on campus for scholarships, housing, utilities and other services, making the university the athletic department’s largest vendor.

“Again, this is revenue we generate so it is new money to campus.”

Along with the money flowing in from its day-to-day operation, the athletic department gives to the university in other ways, both tangible and intangible.

“Athletics transfers approximately $1.2 million annually from the revenue it generates to the campus for non-athletic scholarships such as Singletary Scholarships. In addition, through athletics multimedia contract, athletics provides valuable airtime during men’s basketball and football broadcasts to the University to highlight academic accomplishments and initiatives,” Peevy said.

Markets drive salaries. If an organization wants the best – they must pay top dollar. And when an organization wants to succeed, top-notch leadership can make the difference. The decision makers decided Calipari was the best and they stepped up and paid what they felt necessary to buy his services. It remains to be seen if their investment was wise, but one can’t argue with a program seeking to reach the top paying the price to get there. More success will bring even more revenue and ultimately, the coach will pay for himself – and if he doesn’t, they will show him the door.

Quick Shots
As I watch snowflakes drift down outside my window, it’s pretty hard to believe today is opening day for Major League Baseball.

The Samsung 500 provided a vivid illustration of the small a margin for error in NASCAR racing. Carl Edwards led the race going into the final pit stop, but a mistake by his tire changer dropped him back all the way to 11th. He finished the race in 10th.

Quote of the Week
“I’m living the American dream. My wife and I will be good stewards of this blessing. We’ll support Memphis and Lexington with the blessing we’ve gotten.”
-University of Kentucky basketball coach John Calipari

Puck to the head
This week’s puck flies at the head of FOX News reporter Joshua Rhett Miller for writing a story about coaches’ salaries and state budgets without knowing what he was talking about.