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Insanity is doing the same thing over and over again and expecting different results. That is a definition often attributed to Albert Einstein. Einstein did not coach football. But his principle has application.
Apparently the LSU administration applied the term to its football program. It must have decided that continuing to retain football head coach Les Miles would not bring the expected results – i.e. a national championship or consistent playoff contention.
Miles was 114-34 in 12 seasons. He had the second most victories in school history. Those not in the business of big time college football could rightfully say, “That’s good enough for my team.” But LSU was expected to contend for a national championship. And to get there, LSU most probably must win the SEC conference championship. And in that conference, the gatekeeper is Nick Saban who regularly has reservations in that game.
Since Nick Saban has won 4 of the last 7 National Championships, Saban is the gold standard of coaches. Miles lost every game against Saban since 2011. And many say, the championship did Miles win at LSU was in large part with Saban’s players, who was the prior coach with LSU. And Saban, by the way, won a national championship at LSU.
I leave on the sidelines the relevant question of whether LSU’s expectations of Miles were unrealistic. As I have told my wife for decades regarding my performance, disappointment is often a function of unrealistic expectations. Every year, every team but one loses the national championship, and only four teams make the playoffs. Absent lighting striking twice in the same conference, only 1 team within a power conference will even compete in those playoffs. Reasonable minds can differ as to whether a Miles-led LSU should be expected to inhabit that rare air on a yearly basis.
But the LSU administration has spoken. It makes financial sense to cut losses if the revenue projections justify the expense. Opportunity costs are important. This year’s goals for LSU football will likely not be met. LSU’s current costs of firing Miles is primarily the buyout clause in his contract. The contract provides that if he is fired without cause during the two-year period starting January 1st, 2016, the initial buyout is for $12.9 million. Contract interpretations and calculations vary. But the estimated buyout is now somewhere between $8 million to $12 million.
I don’t think Alabama minds making Saban the highest paid coach in America at over $7 million annually. The Saban effect on school revenues has been well documented, albeit inexact as a science. Forbes contributor Jason Belzer estimated that Alabama made almost $100 million from football in 2015. By his calculation, the football program had a $46, 491,300 profit during the team’s 2015 championship season. [1]
Miles did not even make $5 million in salary under his contract in 2015. LSU may still make someone a handsome offer without topping Saban. The football program is still King of the Hill for an entire state, and one of the premier national programs. So if it gets the right person for the job, the protected revenue will justify the expense.
There is also a financial windfall to the university that goes beyond the field and into another source of revenue – admissions. In 2013, Forbes published an article about how athletic success enhances school applications. The article was written by Sean Silverthorne, editor of the Harvard Business School Working Knowledge.[2] Among his many findings were the following:
- A school’s rise from football mediocracy to greatness increased applications by 18.7 percent.
- Athletic success allowed schools to become more selective in student acceptance (an enviable formula that often leads to higher graduation rates, higher employment rates, spurring even higher application rates and overall revenue).
- Northwestern University applications increased 21 percent after winning a Big Ten Championship.
I’ll take the wild guess that the LSU president and governing board views increased admissions like the S & P corporations view stock prices. It is as stable a revenue source as historically exists within the institution. If a Saban-clone exists, or a pseudo-Saban coach exists, even a Big Ten level bump of 20% is worth starting the early search for the football rainmaker.
It is historically odd to fire a coach after only four games or one-third of the season. But if an administration concludes now that expectations will not be met, then prolonging the agony extends the opportunity costs. In other words, every week of lame duck coaching costs LSU the opportunity to start the search for a replacement. Stated more positively, firing Miles now enhances to opportunity to get the type of coach that will meet expectations. If expectations means being consistently wrestling in the playoff and national championship playpen, then the projected revenue supports the costs.
I need not remind anyone that “amateur” college football is a professional business, based more on economics than team spirit and loyalty. LSU is making an aggressive business decision that is likely to become a trend among similarly situated big dogs in the industry.
[1] See http://www.forbes.com/sites/jasonbelzer/2016/02/24/the-university-of-alabama-made-almost-100-million-from-football-in-2015/#6d58dadb3b6c
[2] See http://www.forbes.com/sites/hbsworkingknowledge/2013/04/29/the-flutie-effect-how-athletic-success-boosts-college-applications/#5291b9126ac9.
