Help wanted: UVA may pay big money for new coach
WANTED: Atlantic Coast Conference university seeks new head men's basketball coach. Must have Division I experience. NCAA tournament appearances a plus. Will be required to raise funds, endorse products, and hobnob with alumni in addition to on-court duties. Must win within four years. Starting salary: $1 million.
After the sudden departure of head men's basketball coach Dave Leitao on Monday, March 16, you may be seeing an ad just like this in the classifieds soon.
And you thought nobody was hiring.
With Leitao's exit, the University of Virginia now faces a critical decision: does UVA shell out the big bucks for a top college coach, or does it go with a less expensive, lesser-known prospect?
In response to the Hook's request, the University provided a copy of the contract Leitao signed in 2005, the document whose buy-out just cost UVA $2.1 million.
What comes as no surprise was that UVA paid Leitao a hefty salary that began at $925,000 annually, with a five percent annual increase, meaning Leitao's salary (pending AD Craig Littlepage's approval) going into this season would have been nearly $1.1 million.
However, what might surprise some basketball fans is that only 23 percent of Leitao's compensation was for actually coaching. The other 77 percent paid Leitao for his role as a fundraiser for the university, for making radio and TV appearances, and for endorsement deals with various sponsors of UVA athletics.
Yet the pitchman pay didn't vary with performance. Leitao was incentivized with an array of bonuses for on-court success.
Such bonuses kicked in big time in 2007, when Leitao got an extra $20,000 for winning the ACC Coach of the Year Award, another $25,000 for winning the ACC regular season title, and $40,000 for making the NCAA Tournament, earning him a cool $85,000 for a season well done.
These numbers are, however, mere earthworms compared to the bait UVA may have to put on the hook to lure one of the college game's big fish to Charlottesville.
One name that keeps popping up in the UVA rumor mill is Minnesota head coach Tubby Smith. Having already been a target of UVA's coaching search in 2005, and given that both Smith's wife grew up outside Richmond, Smith would seem a natural choice. Still, when asked about the vacancy on a Minneapolis radio station on Sunday, March 22, Smith said that he wishes to remain at Minnesota, "for a very long time."
However, if Smith is to come to Charlottesville, UVA will have to pay a hefty price to even match his current deal with Minnesota.
When Smith signed with the Golden Gophers in 2007, not only was the deal worth a reported $1.75 million annually, but Smith's incentives are far greater than Leitao's. A conference title to Leitao meant $25,000; to Smith, it's worth ten times as much at $250,000. An NCAA Tournament bid meant $40,000 to Leitao; for Smith, multiply by 2.5, and get $100,000.
So, if UVA wants Smith, there's no escaping the idea that success will probably come at a greater price than under the previous coach. For all his successes in 2007, UVA paid Leitao $1.06 million. An equivalently good year for Smith would cost the university twice that: $2.1 million.
According to Robert Frank, a professor of economics at Cornell University, such massive investments in the future of a basketball program do not usually pay monetary dividends for the university at large.
"There is the notion that a winning program boosts alumni contributions," says Frank, "but there's no real evidence out there to support that."
In fact, according Frank's 2004 study of the affect of winning basketball and football programs on a university's bottom line, Frank found that if a public university's basketball team makes it to the NCAA Tournament, that only raises donations an average of $5.60 per alumnus. In UVA's case, there are 132,635 living alumni, which would mean only an extra $742,756 in donations for a trip to the Big Dance, while the university stands to pay a big name coach roughly $2 million annually.
Still, Frank does leave open the slim possibility of a university breaking even.
"If you win a national championship, you could get your money back," says Frank, "but then that's true of a lottery ticket, too."
–updated Monday, March 23 at 10:34am