'Bama receiving hefty returns on Saban investment Print
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Thursday, 09 October 2008 13:51
NCAAF Headline News

 TUSCALOOSA, Ala. (AP)-Alabama was looking for a blue-chip investment that could provide healthy returns for years to come, and it was willing to pay a premium to get it.
That's what the Crimson Tide got 20 months ago when it made coach Nick Saban college football's first $4 million man. The deal initially was viewed as excessive by some critics, but now everyone from business professors to former and current players to folks at the campus bookstore seems to think 'Bama is getting plenty of bang for its buck.
First, there was the exposure. Saban was the biggest national name hired since Bear Bryant's retirement 25 years earlier.
Then came the winning. The Crimson Tide is 6-0 and ranked No. 2 nationally, its highest standing in 15 years.
``For some die-hard supporters of the University of Alabama, if they were to win a national championship it wouldn't have mattered what they're paying,'' said Louis Marino, an associate professor of entrepreneurship and strategic management in the university's business school.
particularly in this state, are big business. The bottom line is winning. At all costs isn't necessarily good business.
It might be impossible to quantify at this point the value Alabama got with its hiring of Saban in January 2007. However, a snapshot of the athletic department's balance sheets pre-Saban and post-Saban do show a marked rise in revenue.
The football program generated just over $43 million for 2006 (about the same as the previous year), including $14 million in outside contributions, according to documents obtained by The Associated Press under an open records request.
Last year, the program had revenues of more than $53 million, a jump of some 19 percent. The contributions rose even more dramatically, up 28 percent to $19.5 million. And that was before the Tide really started winning.
Then, there's what Marino calls the ``economy of hope.''
``In addition to his proven track record, he brings the hope of returning to national prominence in football,'' he said. ``With the economy like it is today, hope is a very valuable commodity.''
So, apparently, is Saban. He was regarded as a sound investment because he had been successful at Michigan State and led LSU to a national title before spending two seasons in the NFL with the Miami Dolphins. His ability to land highly ranked recruiting classes is a hefty dividend.
From a pure economic standpoint, Saban was the one making the questionable move, since he took a pay cut from his $5 million salary with the Dolphins to return to the college ranks.
LSU's Les Miles has since become the highest-paid coach in the SEC by signing a deal that guarantees him $1,000 more than any coach in the conference. It's unclear what coaches such as Pete Carroll at Southern California and Charlie Weis at Notre Dame are paid because they work at private universities that don't have to disclose salaries.
It hasn't seemed as big a deal with them, anyway. Saban, who received an eight-year contract, is often described in the media with some variation of ``Alabama's $4 million coach.'' Google the words ``Saban $4 million'' and 21,000-plus hits come up.
Athletic director Mal Moore, who made the decision to hire Saban for the attention-getting salary, feels good about the investment every time he sees a packed stadium even for nonconference games against lesser-known opponents. After all, the Tide filled 92,000-seat Bryant-Denny Stadium for the spring game last year (tickets were free).
There's a waiting list of more than 10,000 fans seeking to buy season tickets, athletic department officials said.
``The ticket sales have always been good here, but they're stronger than ever,'' Moore said. ``There were a couple of games where I walked out of here on Friday and could not have helped a soul. I did not have a ticket. I've never been in that position.
``The Western Kentucky game I was frightened we'd have 60-70,000 in the stands because of soaring gas prices, (and) stations in the area without gas. I was afraid our fans might not show up, but I swear I could not spot an empty seat.''
Moore said he felt during his coaching search that ``it was the most crucial hire that we've made here ever, maybe.''
The Tide has also become a hot commodity on TV. Three games have already been televised nationally and CBS will carry Alabama's next game, against Mississippi on Oct. 18. Two of the games earned five-figure paydays, and the school got six figures for its season opener against Clemson in Atlanta.
It's hard to buy that kind of positive publicity, which Marino said can help make people nationally reconsider views of Alabama that are ``less complimentary than I think they should be.''
and member schools.
Than there's the effect on Tide merchandise.
``Clearly, a winning season is good for the entire university,'' said Noele Butler, licensed products manager for the University Supply Store. ``The excitement surrounding a national ranking results in more fans wanting more 'Bama merchandise to show their loyalty.''
Once a powerhouse program under Bear Bryant, Alabama hasn't won a national championship since 1992 and has captured only three SEC titles in the 25 years since Bryant left.
Former Alabama and NFL player Barry Krauss thinks the $4 million is money well spent.
``We needed that drive and vision,'' said Krauss, a motivational speaker and broadcaster in Carmel, Ind. ``I don't think there's any question we got what we paid for.''
They also get a driven coach and recruiter who puts in long hours.
``I don't think he's happy unless he's coaching or recruiting,'' Krauss said.
Defensive end Lorenzo Washington says Saban's salary talk has been overblown.
``People just think they're giving him the money,'' Washington said. ``He works for everything. He's up here before everybody and leaves after everybody. He's worth every penny.''
Ozzie Newsome knows football from both the business and on-field perspective as a former Alabama and NFL star who is now the Baltimore Ravens' general manager. It comes down to what the market demands, he said.
``In sports today, collegiately and in the National Football League, coaches' salaries have escalated, just like players' salaries in the NFL have escalated,'' Newsome said. ``It's just like anything else, it's supply and demand. In order to get a quality person you're going to have to pay a premium price. It's just like buying a Mercedes over a Chevrolet.''
Newsome said it takes a winning product to get people to fork over money for suites and sponsorships. Enter Saban. The Tide won only seven games his first season, including an Independence Bowl victory over Colorado.
Saban's second 'Bama team has almost matched that total already, and the fans are following the Tide even on the road despite high gas prices and other economic issues, Moore said.
``I think he is a perfect fit for this university and this athletic department,'' Moore said. ``When we hired him, looking at the national salaries, we were right in the ballpark, maybe at the top edge of it at the time we need the very best coach.
``The economy is frightening for everybody, but our fans are following the team.''
 

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