The Belichick effect and the money-sucking machine of college football

And in the immortal words of Yogi Berra, the future ain't what it used to be. In December of 2024, the athletics director at the University of North Carolina, Chapel Hill, sat in front of a group of reporters to announce some big news. And it all had to do with the guy sitting next to him. Please welcome the new head football coach at the University of North Carolina, Coach Bill Pellichick. The university made headlines when they hired legendary NFL coach Bill Belichick to lead the Tar Heels football team. The decision instantly put a massive spotlight on the program, partly because of Belichick's previous success on the field and the hope he could bring some of that to UNC. But there was also the price tag of it all. Okay, so moments ago, we got our hands on Coach Belichick's contract. This is what everybody wants to know. $50 million over five years, and money made in the first three years is guaranteed. He's also eligible for up to... UNC in particular has now made a massive bet on one of the most famous people in football. It remains to be seen how that big bet is going to play out. The first season didn't go so well. But putting the scoreboard aside, why is UNC going all in on a celebrity football coach? You cannot fail at football. Football is the primary driver in athletics. So you have to be successful at football. So you put every available resource into the cash cow. I'm Anissa Khalifa. This is the broadside where we tell stories from our home at the crossroads of the south. With college football season kicking off soon, we're revisiting one of our favorite episodes. This week, we tackle how college athletics became a money-sucking machine and what it means for the rest of higher education.

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to make sure that they're on a comparable level. And then they fear that if somebody leaves, that they're afraid that their coach is going to go to a different place. To that point, there's a quote at the top of your story that I think really embodies this paranoia well. A little more than 20 years ago, the University of Iowa became worried that their very successful football coach might leave. Yes, in the early 2000s, they became part of what the University of Iowa Athletic Director referred to as getting into the arms race. And... He weighed all the options at that point in the 2004-2005 era. And his quote right from the beginning was, I don't know that a football coach should be making five times what a university president makes. But the only thing worse than being in the arms race is not being in the arms race. And therefore, Iowa decided to pay. And that was the risk that they wanted to take to ensure that they kept a good coach. And that kind of kicked off to me the arms race era in college athletics. This arms race has ballooned into some big numbers. Nowadays, in most states, the highest paid state employee is a head coach of a football team. We know what it was like 20 years ago where I think, you know, there was a coach or two that got in the arms race at three half million dollars a year and that seemed astronomical and now that would be economical in today's period. And it's not just coaches' salaries. Spending is up everywhere from facilities to travel. On average, the athletic department Scott reviewed more than doubled their expenses in the last 20 years. But at the same time, their revenue has actually kept pace with that rate or exceeded it. So it's basically one for one in the amount of money that's generated and spent in college athletics. And it's open to interpretation, whether that's a good thing or a bad thing for amateur sports. But regardless of your opinions, this is what is happening. And is this like across all college sports or are there particular sports that are kind of sucking up all the oxygen here? Football is the primary driver in athletics. And men's basketball is number two. But specifically to football, it generates on most campuses for most athletic departments at a minimum 75% of the revenue, if not close to 90 at some places. Wow. So there is a focus on ensuring you cannot fail at football.

I mean, when you have some places at 100,000 seat stadiums, the media rights revenues are 90% football-driven, if not more, at most universities and most conferences. So you have to be successful at football. So you put every available resource into the cash cow. One of the schools in Scott's breakdown was UNC Chapel Hill. Over the last two decades, their athletic department has seen total expenses jump more than 150%. And coaching salaries? A 350% increase. And that's all before Belichick came into the picture. And just a quick note here. WNC, which produces a broadside, is an associated entity of UNC Chapel Hill. We maintain editorial independence in all news coverage. So the higher Bill Belichick, it serves multiple purposes. And I think this could really, I'll be anxious to see what the numbers are like when the next couple of years reports comes out because he builds interest immediately. He has a proven pedigree of success as if not the greatest pro football coach in NFL history. He's certainly at the very top. He's on the Mount Rushmore. Right. Even I've heard of him. Right. I think it's a move, though, that if it pays off. It's like buying a lottery ticket for North Carolina athletics and North Carolina football. But I think the odds are not like winning the lottery. It's like winning a scratch-off ticket. Right. Well, it's a very expensive lottery ticket. Yeah. But Scott says there's one more major thing influencing the decision making of university athletic programs like UNC. a recent bombshell settlement with the NCAA. And a federal judge approving terms of a huge $2.8 billion anti-trust settlement that will change the way college sports have been run for more than 100 years. Here's the snapshot. They can spend up to $20.5 million paying student athletes through the university, which of course was a major violation up until July 1st. So that is a major expenditure that's now going into it. The 119-year amateur Zem model in the instiblay is dead. It's over. Everything they based everything on the last 120 years is gone. Players will now start being paid based off of the revenue from their schools starting July 1st. Those power conference schools are going to start sharing. We've talked about all of these different pieces of the business, but what makes the business of college sports unique from other types of businesses? We're talking about a mix between capitalism and socialism. if you will. And it is a really fascinating dynamic, if you want to get into the politics of this, that these universities receive donations from some of the wealthiest individuals in the country and certainly in their state and community. However, there are constraints. They are not owned by anybody, as again, they are a state agency. They are not at for-profit organizations, so they do spend this money. So to have this one side driving to generate as much revenue,

as possible, but to not have a board of directors or not have somebody earning shares of revenue or off of what's happening, really it makes it unique. It makes it different in society. Right. I mean, do you see any end in sight for this excessive spending? Or is there anything that needs to change for the spending to slow down? No. It's never going to change. As long as... The only way is to put some sort of level of constraints on the entire business, and that'll never go over. There are aspects that could enter this discussion and really clouded up, which is each of the four major conferences has explored investments from private equity firms and investment firms. And so that's going to be the next phase that we're looking at when it comes to athletics and revenue generation is... you know, investments through private equity and how much that they are going to be beholden to those companies, you know, rather than dispersing it to its membership. Outside of the other sports programs at these schools, I mean, these are eye-watering amounts of money, right? What is the cost to the rest of the university? That's a great question because it's kind of a symbiotic relationship in some ways because college athletics is referred to as the front porch of a university. That's how you get 100,000 people on your campus is to go to a football game or 20,000 people to a men's basketball game. And they see the university. They spend money on the university. You see when schools win championships or have postseason success that you see an uptick in admissions. to the universities. So they are a great benefit to every single school in this way. And I don't think it's negative. I think the only way it has a potential to be negative is if there's too much meddling on both sides of campus. If they can keep themselves separate, then I think it's a really important and mutually beneficial relationship.

But what happens when athletics and academics don't stay separate? That's coming up after a short break. This episode of The Broadside is brought to you by Progressive Insurance. Do you ever think about switching insurance companies to see if you could save some cash? Progressive makes it easy. Just drop in some details about yourself and see if you're eligible to save money when you bundle your home and auto policies. The process only takes minutes, and it could mean hundreds more in your pocket. Visit progressive.com after this episode to see if you could save. Progressive Casualty Insurance Company and Affiliates. Potential savings will vary. Not available in all states. If you sold somebody a loaded gun who you knew was in a vulnerable state and they shot themselves, I think it is murder. Just because you're using the internet doesn't mean you get away with murder. I'm Damon Fairless, host of Hunting Warhead. This season, I take you inside the business of suicide, and the places desperate people go when they can't find what they need in the real world. Hunting the Suicide Salesman. Available now wherever you get your podcasts. I'm Brian Reed. When I created S-Town, I looked at how secrets, lies, and the stories we tell shape a small rural town. Now on my podcast, Question Everything. I'm going bigger. Hi, this message is for Senator Lindsey Graham. I head to Washington to take on a law that gives tech companies sweeping immunity. Is how these companies have gotten rich. Join me as I go after big tech on Question Everything from Placement Theory and KCRW out Thursdays wherever you get your podcasts.

I am Matt Hartman, and I'm a higher-aid reporter at the Assembly. When Matt Hartman started reporting on higher education in North Carolina, there was one thing he heard that stuck with him. I met with an old UNC guy, and one of the things he told me is that there's ever something... dramatic or controversial happening at UNC and you can't explain it, the answer is football. And that seems to exactly be what's happening. Earlier this year, Matt took a closer look at UNC's football program, specifically the big bet they're putting on new coach Bill Belichick. Once Bill Belichick got hired, the first things a lot of people heard were just the salary numbers. He's getting $10 million a year. They made all sorts of promises about how much he would get for revenue sharing with his players, for assistant coaches, for upgrades to the program more broadly. So adding the Belichick bump onto a football team that already has a $40 million budget, Matt wanted to figure out, where is this coming from? Because it wasn't clear that there was an answer. So where is this money coming from? One of the things we found when we started looking into this was that UNC has been putting money into sports since before Belichick. One of the big takeaways of our reporting was that last year, the university put $21 million, $21.4 million into athletics from other sources. And the university spokespeople were adamant that it wasn't coming from state appropriations or tuition dollars, but basically this is money that could have been spent on something else in the university. And they had to do it to prop up the athletic department. Why is it such a big deal that UNC is doing this now? Because they really prided themselves on not doing it for a long time. Some of the figureheads at UNC, the beloved figureheads, including Dean Smith in particular, really made a big point about keeping academics at the forefront. And so to pull money that could go to something else, to a lab, to a scholarship, and put it into athletics is a signal of a big change.

To be clear, UNC is far from the only school putting institutional funds into athletics. Matt pointed out that other, quote, public ivies similar to UNC, have been doing the same thing, to varying degrees. But what stands out is how much UNC has put into sports recently. Matt says in the 2010s and early 2020s, the university only put about $2 million a year into sports. To go from that to giving $20 million, $21.4 million in a year is a big change. And the future of college athletics is changing, and we want to be in the forefront of that. This is UNC's athletic director, Bubba Cunningham, at the press conference introducing Belichick. With the new coach sitting next to him, the AD made it clear that UNC was declaring a new era for its athletics. And we are embarking an entirely new football operation, and we can't wait to have Coach Belichick leading the charge for us. The revenue you can earn in football dwarfs everything else. bar none. In college sports at UNC in most other places, there are only two sports that make money, and it's men's basketball and football. And the amount of money in football is just incomparable. So the idea is that if you bet big on Belichick, you could raise the prominence of UNC athletics overall, and everyone will benefit. How do folks outside of the athletic programs feel about this investment? They are big mad. Not all of them. Of course, some of them are football fans, but there are a lot of faculty who are really up in arms about this. I think the best example to show that is as Bill Belichick was being announced, I think right after there was a meeting among the faculty. And a geography professor pointed out that grad students are still getting paid just over $20,000 a year. And now they're throwing all this money out of football coach. And it just doesn't sit right for a lot of people. The answer from Lee John Roberts, who's the chancellor, was if you go and see someone wearing a UNC shirt across the world, it's not because of our political science department. It's because of our sports program. Broadly, there are lots of people that are going to complain about universities being run like businesses now. But they are being run like businesses. The value of athletics to someone like B. John Roberts is in the branding and in sort of building attention and visibility. That's why they think this is worth it. And for academics who want to focus on the academics, it seems like a distraction. What about in terms of, you know, concrete consequences for things like other programs or resources that might be put at risk at the university? At UNC, football and men's basketball, turn a profit. No other sport does. When things are working well...

UNC uses the revenue from football and basketball to pay for everything else. USC has 28 varsity teams. So 26 of them don't turn to profit. So my best guess is if things start going south, the first thing UNC would do is start cutting sports. Bubba Cunningham, the current athletic director, has been adamant that that's not going to happen, that he is fully committed to maintaining all these teams. But Bubba Cunningham is also not going to be athletic director for much longer. They've already lined up a replacement for him. Some of the trustees and other people at the university who are big into this Bill Belichick deal have been pretty clear that they don't think it makes financial sense to maintain that number of sports. So I think that's one of the things that I'm watching is who is in charge of U.N.C. athletics and how committed they are to maintaining some of those other programs. In the midst of this changing athletics and academics landscape, how is UNC a case study or a litmus test for other universities? UNC is in a better position than most schools. It already has a successful athletic program. It has a huge brand. It has this sort of attention. If other schools try to follow in their footsteps and bet big on football without the resources that UNC has, it's even riskier for them. And I think as bad as things could be at UNC, if this bet goes wrong, I think the bigger risks. are for schools like ECU or App State or UNC Charlotte who are trying to build a football program in UNC Charlotte's case, like basically from scratch right now. That's an even riskier bet. The college football season is just getting started. And only time will tell if UNC's bet pays off. The team played their first game earlier this week, and it didn't go so great. And the heels are getting the boot put right to their backside. All the Bill Belichick hype and promise, that's all up in the cloud now. It's all up in smoke. After last night's debacle in Chapel Hill, I really don't know how else to describe it. It was a disaster. Last night was a disaster. Sure. It was the worst case scenario for North Carolina. Okay. Full stop. But no matter their record, the tarheels will likely remain in the spotlight. Thanks in part to an upcoming Hulu docu series on the team. Are you going to watch the Hulu series on the team? Yeah, I probably will. You sound so uninduced. You know, I, um... I mean, do you think that this reality TV series is a bid to increase the revenue in a way that, like, drive to survive has made the F1 fandom so huge? For sure. This deal will crash or thrive based sold on media attention. And so if they can maximize that media attention and turn it into dollars...

U&C is getting what they want out of it. It seems like that would require on the field success. You would think. Yeah, maybe the reality show of a bet going wrong will turn into a smash it in a different kind of way. And a quick update on this episode that originally published last year. The 26 college football season officially kicks off later this month when UNC plays TCU on August 29th in Dublin, Ireland. The pressure on Bill Belichick in the Tar Heels will be immense. And that's because Belichick's first year was, by all accounts, a major disappointment. The team finished four and eight. The proposed Hulu series, it was canceled after filming had already begun. And on top of all of that, the program has been engulfed in numerous scandals throughout the offseason. This ain't working. This isn't the NFL. This is not working. This has been a disaster. And I think it's a little more egg on the face of North Carolina and the people who shoehorn Bill Belichick in there. If you'd like to check out more reporting from Matt Hartman and Scott Docterman, we've dropped some links in the show notes. This episode was produced by Charlie Shelton Ormond and edited by Jared Walker. Our executive producer is Wilson Sayre. The Broadside is a production of WUNC News in North Carolina and is a part of the NPR network. If you have feedback or a story idea, you can email us at Broadside at WUNC.org. If you enjoyed the show, leave us a rating or a view or share it with a friend. I'm Anisa Khalifa. Thanks for listening, y'all. We'll be back next week.

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