Is Butler gambling with Stevens' contract extension?

April 9, 2010
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Perhaps Butler basketball Coach Brad Stevens is breathing a big sigh of relief right now. He can go on vacation with a 12-year contract extension and a fat raise in his back pocket.

But Butler’s board of trustees should just be feeling the heat like a craps player betting on box cars. Well, their odds with Stevens and athletics director Barry Collier at the helm are probably better than that.

But on local TV this morning, I heard a "Butler expert" say the discussion about Stevens' contract extension at Butler should have been "an easy discussion to have." I strongly disagree.

Butler's strategy of using basketball as a major marketing tool and using Brad Stevens as the primary rainmaker for the entire athletic department, if not university as a whole, has major ramifications. And I think it's safe to say that someone whose salary is about 10 percent of your entire athletics budget is in fact a program's chosen rainmaker. They certainly better make it rain and the harvest better be long and green.

Stevens’ big-dollar contract extension shows Butler officials are all-in in a high-stakes game that could take the school to new heights or plunge into a world of the escalating athletics arms race where there are as many losers as winners—financially speaking.

A contract extension for a college basketball coach is more about raising the coach’s annual pay than it is about the length of the contract. The longer the extension, the higher the pay raise. My estimates tag Stevens’ base salary at more than $500,000. That’s close to the base pay IU is paying basketball coach Tom Crean. Be assured, Stevens has other incentives in his contract that could and likely will take that amount higher—potentially much higher.

But consider this. Butler has about 45,000 living alumni. IU has 495,000. Now I know some fine and relatively wealthy Butler graduates. But let’s be honest, Butler doesn't have sugar daddies like Bill Cook, John Mellencamp and Mark Cuban that IU can lean on when the athletics department beast needs feeding.

And no matter how many fans Butler packs into Hinkle Fieldhouse, it only holds about three-fourths of what IU’s Assembly Hall or Purdue’s Mackey Arena holds.

That’s why Butler has an athletics department budget ($11.2) about one-fourth the size of IU and Purdue, and 10 percent the size of mighty Ohio State.

And the discussion doesn't merely begin and end with Stevens' salary. It can't possibly. Though Collier insists being competitive isn't all about money in college, cash is certainly a big part of the equation. Already, Butler is trying to raise $10 million or more to improve Hinkle Fieldhouse.

The next question will be about the recruiting budget. Butler's is about $75,000. That's 286th out of 345 NCAA Div. I schools. Can you really expect Butler to compete with the likes of Duke, which has a $769,464 annual recruiting budget. IU's is $526,772.

Gotta compete! As the school's supporters begin to become more demanding, Butler trustees will be asking 'what can we do next?'

Collier is confident the cash to support Stevens’ contract will come in as well as more than $10 million needed to improve 82-year-old Hinkle Fieldhouse—for now.

But what the future holds, and what Stevens’ agent demands, during the next round of negotiations is anyone’s guess.

It should be pointed out that another small school has traveled this path. Gonzaga University raised its men’s basketball coach’s pay from $200,000 a decade ago to $851,000 last year. School officials told me during that time that enrollment grew by 20 percent and donations to the school by more than 10 percent.

That kind of payoff, of course, is not guaranteed.

That’s why they call it a gamble.

  • editor?
    This is the most poorly-edited blog post I've ever seen in the IBJ.
  • all good
    Sorry Taj. No excuses, but by way of explanation, my post was a bit of a work in progress when I posted it. That's usually not the case, but my deadlines got the best of me this morning. Thanks for reading and thanks for your patience.
  • Butler on slippery slope
    I'm afraid Butler may be on a slippery slope. According to the Knight Commission: During the most recent fiscal year, only 12 of 120 [NCAA Division I-A athletic departments] either broke even or made money.
    The rest must be taking money away from the schools' academic mission.
  • Butler Budget
    Come on now. Not a very good blog. Unless you went to Butler, you don't get it. Look at the # if Indiana players! Doesn't take that much $$ to recruit. Wonder how much $$ the Kentucky budget has is used for cash payments to parents, players. BU watches their $$ and I am very confident in the future plans as with all alumni Dawgs. Remember, it's still about the student at BU.
  • Good gamble
    There is another thing to consider: The length of the contract. Assuming Stevens remains the level-headed coach that he has been, then Butler stands to realize a windfall if and when he leaves. Say Stevens stays another two or three seasons then moves for the big payday at a primo school. That leaves nine or 10 years years on the contract that said primo school will buy out. That's a pretty good hedge against this alleged gamble.
  • good point
    Bulldog, You make a very good point. The buyout clause in the old contract was likely no more than $1 million. In some ways Butler had to do this. And by agreeing to this contract, you might actually say that Brad Stevens did Butler a favor. It makes it harder for him to be hired away, but if a big school really wants him, Butler will get a nice financial bonus out of the deal.
  • Next One Up
    I'm with you Mr. Schoettle. This country has some serious problems because boards didn't ask the tough questions or sometimes it seems any questions at all. A key component of "The Butler Way" is supposed to be "accept(ing) reality." Presumably that applies not just to students and parents but also to administrators and their overseers, most especially in the afterglow of the most successful sports season in the school's history.

    In reading some of the recent coverage I noted that (1) the team had an ethic of "next one up" whenever somebody was injured or in foul trouble and that (2) one of Butler's assistant coaches was recently recognized as being one of the top mid-major assistants in America by two different rankings. No denying the excellent job Coach Stevens has done, but given the realities of Butler's situation, the board should have been entirely comfortable with applying the "next one up" philosophy to the head coaching position.
  • salary
    His base salary is closer to a million than 500000
  • Source
    Ephram, What's your source?
  • Contract value
    I don't think the base salary is $1 million. The entire package, perhaps, but if the base salary were that high, it'd be close to twice as much as Tom Crean at IU. We'll all know for sure one year from now. That's when Butler is required to file its Form 990, which they are required to file by law as a not-for-profit organization. On April 15, I will learn definitively what his salary was for this season as Butler will file its Form 990 for this year. That Form 990 is required to include a posting of the organization's top 5 paid employees. Stay tuned and thanks for reading.
  • B. Stevens
    Talking with Brad last summer his intentions have not changed one bit he has always wanted to coach basketball and he loves his job. I think Butler probably gave him 750K and he doesn't need much of a recruiting budget, because a phoneline and a person to answer it for all of the players that will call him isn't much. The comments I have read here appear to come from people who have not played much ball. The type of coach Brad is makes you want to play for him. He might not have room for the walk-ons now that he has seen in the past though.
  • Redaction??
    One year later, reread and see how crazy this "gamble" was. I think 12 years may be a bit short!!
  • how does it feel
    I bet eating your words sucks, loser journal
    • haha... you called it
      NOT! can't compete. whatever. the incoming freshman class looks good as well!

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