I'll Have Some Perspective

It's hard to like our coach this week.  Really?  Minnesota?  A special teams gaffe again?  I, like you, vent much of my frustration by just really wanting the coaching staff to fix some very basic flaws in their approach.

This post is different.  This post is meant to remind us of the things that are good about our coaching staff.  As the title suggests, this post is to provide some perspective.





Here's some things to consider about Coach Ferentz and Iowa football, particularly when you're scratching your head over his salary, which is nearly $4 million, making him one of the top 10 highest paid coaches.


Perspective No. 1

Iowa football generates about $45.8 million in direct and indirect revenue for the University, and costs only $18.4 million in direct expenses to run.  That's a net profit of $27.3 million per year, or a profit margin of about 59%.  That is, for every dollar the program brings in, 59 cents of it is pure profit for the University.  The perspective here is that about 9 cents of that dollar underwrites Coach Ferentz's retirement.  

Perspective No. 2

Iowa football has higher profit margins than any major industry.  

  • Iowa Football: 59%
  • Crude Oil: 23.8%
  • Pharmaceuticals: 15.8%
  • Petroleum: 13.7%
  • Commercial Banking: 12.6%
  • Insurance: 10.6%
  • Wall Street: 10.1%
  • Hotels and Casinos: 7.3%
  • Gas Refining: 6.2%
  • Airlines: 3.6%
  • Health Care: 3.3%
  • Wholesale Electronics: 1.6%
  • Cars: 1.1%
Perspective No. 3


On a  direct revenue/expense basis, Iowa football is the only profitable program in the entire athletic department, generating a direct net profit of about $3 million, which is entirely offset by the net direct losses caused by men's basketball.  All other men's sports at Iowa contribute a combined net loss of about $6.6 million.  Even the wrestling program, which generates a good deal of revenue, costs more than twice what it brings in.  Men's basketball alone costs $4 million to operate.  Women's sports generate $200,000 in revenue and cost the University almost $12 million per year in direct operating expenses.  The entire women's athletics program at Iowa is underwritten by Iowa football.  The perspective here is that so long as Iowa football is generating that kind of revenue, Coach Ferentz isn't going anywhere.  

Perspective No. 4

Who else is paid as much as Kirk Ferentz?  Here's the top 10 as of the end of last season, followed by their win total and cost per win:

$5.17M -- Nick Saban (Alabama), 10 wins, $520,000 per win

$5.10M -- Mack Brown (Texas), 5 wins, $1.02 million per win

$4.53M -- Bob Stoops (Oklahoma), 12 wins, $380,000 per win

$4.00M -- Lane Kiffin (USC), 8 wins, $500,000 per win

$3.78M -- Kirk Ferentz (Iowa), 8 wins, $470,000 per win

$3.75M -- Les Miles (LSU), 11 wins, $340,000 per win

$3.65M -- Jim Tressel (OSU), 12 wins, $300,000 per win

$3.56M -- Bobby Petrino (Arkansas), 10 wins, $360,000 per win

$2.94M -- Jim Grobe (Wake Forest), 3 wins, $980,000 per win

$2.81M -- Mark Richt (Georgia), 6 wins, $470,000 per win

If you re-order this by cost per win, Texas is the most expensive place to win, at more than a million bucks per victory in 2010.  Ohio State is the most economical at $300,000 per win.  Iowa, with Coach Ferentz, is #5 in that ordering at $470,000 per win. The perspetive here is that, among top-paid coaches, Ferentz does not appear to be especially overpaid (or under-paid) in 2010 as measured against performance.  Eight of those ten coaches went to bowl games, and six of them won.  Ferentz was among those six, upsetting #12 Missouri.

Perspective No 5.

Why these guys?  Georgia?  Really?  Let's take a look at the most profitable college football programs.  Despite it's 59% profit margin, Iowa is only ranked #15 in most profitable football programs.  Who's ahead of us?  It shouldn't surprise you to discover that it's teams like Texas, Georgia, Oklahoma, Ohio State, Alabama, LSU, and so forth.  However, it also includes legacy programs like Notre Dame, Penn State, and Michigan.  The perspective here is twofold.  First, there is substantial overlap between profitable football and highly-paid coaches.  The lesson here is that the coach is paid for producing profits, which is not quite the same thing as producing wins.  Obviously, a coach who consistently fails to produce wins will eventually fail to produce profits, but the dollars for Coach Ferentz follow the dollars for Iowa Athletics first and the win totals on second.  

The other perspective here is that Ferentz is overpaid in this regard.  He's one of the top 5 highest-paid coaches, but the program is ranked #15 in overall profitability.  However, revenue here is a function of factors beyond the coach's control.  The programs ahead of us live in enormous markets, enjoy national followings that dwarf the Iowa fan base, or are located in small niche markets in the south where approximately 100% of the population is into college football.  The only other small market program in our neighborhood is Nebraska at #13.  All things considered, a #15 showing for Iowa football ain't bad (fellow small-market midwestern program Wisconsin is #22).

Are you interested in more perspective?  If so, let me know, there's lots of interesting correlations you can draw from this data.  The major takeaway I've divined is that Coach Ferentz has no impetus to change anything, and none of us should hold our breath.  With the Big 10 providing $20 million per year in athletics revenue, which is almost entirely attributable to Iowa football via the Big 10 network, that alone covers the bill for the entire football program and then some.  Until direct football revenues decline by about $3 to $5 million per year, Coach Ferentz is here to stay.



Unless otherwise expressly indicated by BHGP editors, this FanPost is strictly the viewpoint of the author and is not endorsed by BHGP in any way.

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