How will Lovie Smith's $21 million price tag be received in budget-challenged state?
CHAMPAIGN — The palpable buzz created by the hire of former NFL coach Lovie Smith as the next Illinois football coach didn't come cheap.
Smith's six-year, $21 million deal — plus possible bonuses — follows more than $5 million spent by the athletic program on legal investigations and coaching buyouts just since last spring.
The tally includes:
— Almost $1.35 million to buy out the contracts of former head coach Bill Cubit ($985,000 left on $1.2 million salary, negotiated in November) and his son, offensive coordinator Ryan Cubit ($361,000 for remainder of his contract, offered in December).
— $1.36 million for two independent investigations into Illini athletics conducted by Chicago law firms — $651,671 for Pugh, Jones & Johnson for a probe into accusations of abuse by women's basketball players; and $633,703 for Franczek Radelet's months-long investigation into allegations of medical mistreatment by football coaches.
— A $2.5 million buyout of former athletic director Mike Thomas, who was fired in mid-November after the final report came out, though he was cleared of wrongdoing.
New athletic director Josh Whitman also said he will give Smith the resources to bring in assistant coaches near the top of the Big Ten, though he didn't specify an amount.
All of the money comes from the Division of Intercollegiate Athletics, which has reaped the benefit of lucrative Big Ten television contracts in recent years. Overall athletic revenue soared from $47.9 million in 2005 to $83.7 million last year.
But how will this play in a state with a huge deficit and no working budget? Or on a campus that cut about the same amount as Smith's new contract from its budget this year — and likely faces more of the same? Or with UI students waiting to hear if they'll have to repay part of their state-funded financial aid this year?
"We obviously had those considerations," UI President Tim Killeen said Monday, acknowledging that it's new territory for the UI athletic program. "This is a step for us, in the financial aspect."
He said UI officials considered compensation norms for Big Ten coaches, the track record of other NFL coaches at the collegiate level, and anticipated earnings from the Big Ten television contract — as well as the positive impact of Smith's hiring on season ticket sales.
In one day, as of 5 p.m. Monday, more than 1,000 new season tickets had been sold, according to Jason Heggemeyer. associate athletic director in charge of ticket sales.
Killeen said he talked with UI trustees in detail about the proposed compensation package, and shared an in-depth analysis prepared by Whitman with the board's Executive Committee and others.
"I have to say that our JD/AD has done his homework on issues related to coaching compensation, normatives, comparatives and what we might expect," he said, referring to Whitman's law degree. "The questions had been addressed."
Board Chairman Edward McMillan said Monday the university is fortunate that the Tampa Bay Buccaneers are still paying Smith a buyout from his contract there. Illinois will pay him $2 million each of the next two years, and his salary will gradually rise to $5 million in each the final two years of his contract.
"I'm comfortable," Killeen said. "I do recognize that this is a step. It's a step towards the eminence not just in academics — we are going to nurture our academic pre-eminence above all else — but also in the athletic arena."
Killeen and others also argued the money comes from athletics — ticket sales, donations, Big Ten revenue, etc. — a separate revenue stream from the state funding and tuition revenue that pay for academic programs.
"These funds are not intermingled with the support for the academic programs and the operational programs or the MAP program," he said. "We'll make sure our students are not negatively affected in any way. We expect this to add value" to the university as a whole, he added.
"This doesn't come out of tuition. It doesn't come out of state funding. It's strictly out of athletic funds," McMillan said.
That's not quite the whole story, one UI professor argued.
While praising the Lovie Smith hire as a "brilliant move" by Whitman, media and cinema studies Professor Jay Rosenstein noted that students pay millions in fees to help support athletic facilities, including a sizable chunk of the State Farm Center renovation.
"If the athletic department has so much revenue that it can spend $5 million on buyouts and legal fees," he said, "and on top of that they have $21 million plus whatever bonuses Lovie Smith is going to get ... then I think it's time for them to move out of mom and dad's basement and finally make it on their own.
"Because the fact is that the athletic department is not self-supporting," he said. "It costs the campus money and it costs students money. Students are the group that has the least amount of money. Let's give the students a break."
Illinois Student Senate President Mitch Dickey reacted to the news of Smith's hiring first as a fan: "I haven't been this excited about Illinois football probably at any other point in my time on campus."
But Dickey, who has led the campaign to force lawmakers to fund the Monetary Award Program grants for needy students, acknowledged the size of the football contract "looks bad" in the current budget climate.
He's reassured by the fact that Big Ten revenue is projected to increase substantially next year. The UI's reports to the NCAA don't break down Big Ten Network-related revenue, but the line item for "NCAA/Conference Distributions," which includes shares of conference television agreements, jumped from $4.5 million in 2005 to $29.3 million last year.
"Half of me says we really should be looking into how athletics can best be supporting our academic mission," Dickey said, noting that the University of Texas athletics actually funnels money back into academic programs.
"It's an entertainment industry," Dickey said. "You have to pay market price for the best of the best, to attract the kind of attention and therefore the donations and the revenue streams that would make it possible for those things to happen."
He said Illinois made some mistakes this past year, including offering Cubit a two-year deal as head coach before hiring a permanent athletic director who had his own plan.
"Most people agree with that," he said. "We'll learn from our mistakes, even though they are immensely costly."
Dickey said Whitman and university leaders "understand what they need to do and how to deal with it."
McMillan said he understands why someone would question the size of Smith's contract at a time "when we're financially challenged." But the university is recognized both for its academic prowess and its athletics, he said, "and people place high importance on it, particularly in football and basketball."
Though the UI has enjoyed "outstanding" success in other sports, "at the end of the day football is especially important to the total revenue stream for the athletic department."
As for the costs incurred this past year, McMillan said, "fortunately we have an athletic director who has a Bronze Tablet in finance. He's also a lawyer, a very bright young man. I'm very impressed with his intelligence, his drive, his personal sensitivity."