NBA Coaches Are Going to Get Paid

      On April 30, 2015, the Oklahoma City Thunder hired former Florida head coach Billy Donovan to replace Scott Brooks, who was surprisingly fired after what was by any measure an impressive seven-year stint with the team, including a .620 winning percentage, five playoffs appearances and an unsuccessful trip to the NBA Finals in the 2011-12 season.  Upon his firing, Brooks was three years into a four year, $16 million dollar contract extension he received following the NBA Finals appearance.  When Donovan was announced as the new coach, it became Donovan’s first ever job in the NBA, having spent the past 27 years in the NCAA, beginning as an assistant for Kentucky, then spending two years as head coach at Marshall, and ending up with a 19-year tenure at Florida, where he won two NCAA Championships.  Donovan’s contract with the Thunder was for five years, $30 million, a salary of two million dollars more per season than his predecessor, who had already proven himself to be a valuable coach.

     A similar situation happened with the Boston Celtics, when they hired former Butler coach Brad Stevens in the summer of 2013.  Stevens also had no former coaching experience in the NBA, but an incredible college resume, leading a mid-major Butler team to two incredible runs to the NCAA Championship game.  The contract offer he accepted with the Celtics was for six years and $22 million, nearly four million dollars per season.  Since then, Stevens has taken the Celtics from a projected bottom-feeder to a .500 playoff team with loads of future potential.
     Lastly, former NBA sharpshooter, analyst, and general manager of the Phoenix Suns Steve Kerr had no prior coaching experience when he accepted the Golden State Warriors position before this season, replacing Mark Jackson, who lost his job despite leading the Warriors to back-to-back playoff appearances for the first time since the 1990-91 and 91-92 seasons.  Kerr was given expectations to make the team a title contender and was given a five year, $25 million deal.  In turn, Kerr finished runner-up in Coach of the Year voting in his first year, and led the Warriors to a NBA-best 67-15 record.
     I believe that what at first may seem like just a couple unrelated stories are the key to understanding a major shift in the NBA in the next few years which will see the average salary for head coaches raise significantly.  But before I can explain what the future holds, let’s look at the present.  The average salary of an NBA head coach for the 25 teams who currently have head coaches and for which numbers are known is just under $4.4 million.  However, that number may be deceiving because if the three coaches who make the most money (Gregg Popovich, Doc Rivers, and Flip Saunders [yes, the coach of the league’s WORST team, that Flip Saunders]) who all make at least nine million per season currently, the number drops almost a million dollars down to 3.63 million per year.  The funny thing about that number is that it is lower than the salaries for Donovan, Stevens, and Kerr.
     These three men, especially Donovan, have showed a changing viewpoint of head coaches over recent years.  Teams are beginning to look outside the NBA to find coaches, and are willing to pay to get the guy they want.  Teams are taking chances.
     Some teams are not even looking in the U.S. for their coaches, such as David Blatt, who joined the Cavaliers after many successful stints in Europe, including 2014 Euroleague and Euroleague Coach of the Year titles with Maccabi Tel Aviv.
     The majority of NBA coaches have still gotten their positions the old-fashioned way, working their way up after years as assistants in the league.  One of the best examples of someone who “started from the bottom” was the Heat’s Erik Spoelstra, who was an employee of the Heat for 12 years before earning the head job, even starting as a video coordinator back in 1997.  However, even after seven years as head coach, and two NBA titles, Spoelstra makes a below-average $3 million per season.  Nearly 20 years of work has earned him less money than all four previously mentioned first-year coaches.
     This trend towards going to great lengths to hire coaches with little prior experience who have the potential to be great coaches and giving them offers they can not refuse is going to shake up the league.  Although college coaches and relatively inexperienced coaches have not been very successful historically, the recent influx of these coaches, along with their successes early has gotten people talking, and readying their wallets.
     Current Kentucky coach John Calipari has come up a lot in discussions regarding potential NBA head coaching positions over the past few years, most recently just a few days ago with the New Orleans Pelicans.  Think about what it would take to bring Calipari to the NBA.  Every year, Calipari successfully recruits future stars, (add stat about recruiting class rankings) coaches the stars he has, builds a successful team that in many cases is top ranked in the nation and a National Championship contender, and is basically the most popular guy in Kentucky.  Additionally, he leads all NCAA D-I basketball coaches with a salary over $6 million.
     For Calipari to leave the biggest program in the country to coach in the NBA, where job security is basically nonexistent (but more on that later), he would have to be paid an outrageous amount of money, becoming one of the top five highest paid coaches in the league. Even if that happened, there is still no guarantee he would leave Lexington.
     For the sake of argument, I’ll say that Kentucky gets to keep their beloved Calipari.  It’s more likely than not that he stays with the program for a while.  This still leaves many other coaches who have done great things at their programs, but may be looking to snag a job in the NBA.  Additionally, after seeing the contracts given to Donovan and Stevens, these coaches are now becoming more aware of their worth.  The average salary of a coach whose team made March Madness this past season was about $1.5 million, but similarly to the NBA, that average drops closer to $1 million if just a few coaches are removed.  The best of these coaches will be sought after by NBA teams who are now much more open to try different tactics and personnel in order to win.  With all the coaches that are unsuccessful in the league, a team that thinks they may have found a great coach will not be afraid to make moves to lock them up for the future.
     As for the current NBA head coaches, they must be feeling a few things.  First, they can not be pleased that coaches are just jumping into the league and making more then them.  But on the other, it makes sense that if the average coach’s salary increases, they will be soon to follow.  Teams will need to spend more because if they do not, other teams willing to pay larger amounts will steal the best available coaches.  That means the coaches will have more power.  However, the pool of potential coaches is growing, meaning the job is more competitive, and coaches need to keep pushing their teams forward or face being replaced.
     The NBA is at a point in time where it is more popular than ever, and each year is seeing an increase in revenue.  Because large new markets, especially overseas, are being exposed to the game, every team is battling for new fans.  Naturally, this happens by being good.  The teams that are not good are doing everything in their power to shortcut the rebuilding process, rejecting old methods of building an organization from the ground up, and instead opting towards revamping continually changing coaching staffs, luring all-stars during free agency, and even tanking, the one NBA commonplace I despise above all.
     This article, http://www.sbnation.com/nba/2014/5/7/5690420/nba-head-coach-turnover-mark-jackson-fired-warriors, does a great job at showing just how remarkable the NBA head coach firing rate is.  Popovich is the only coach who joined his team before 2008, and now there are only two other coaches remaining (Spoelstra and the Mavericks’ Rick Carlisle) who were hired before 2010.  Going into this season, the average NBA coach tenure without including Popovich (his 18 years is longer than the sum of the tenures of coaches from every individual division), was under two seasons.  The Pacific division’s five coaches began the year with just three years combined tenure at their current positions.  The four coaches currently in the Conference Finals began the year with just four total years with their teams under their belts, and three of those came from the Rockets’ Kevin McHale.
     These numbers only confirm that teams are not afraid to switch things up.  Since the standards in the league are so high, coaches that have shown their ability to succeed, whether in the NBA or elsewhere, are going to be more and more highly valued, and will be able to profit off the desperation of struggling franchises.  This could lead to a system where the biggest names on the market experience a kind of free agency, where they are accept the offer of the highest bidder.
     But enough about all the specifics of the state of head coaches in the league.  From a strictly numerical standpoint, do they deserve to be making more money?  The NBA has the highest average player salary of any sports league in the world at $4.58 million for the current season.  This means that if we include the league’s elite coaches, the average player makes slightly more than the average coach.  First off, that should not be the case.  Sure, at the end of the day, the players are the ones who perform every game, but the coach is responsible for all the training and chemistry and tactics, which can make or break a team.  Regardless, how does this ratio stack up versus other leagues?
     Unfortunately, there is no easy answer to that question.  While most NBA salaries are easily found, the same can not be said for other leagues.  From the salaries of half the NFL’s coaches, I could make a decent guess that the average salary is around $5 million, or over double the $2.11 million average salary for players.  For the MLB and NHL, almost no information is available.
     Whether the increase in salary is justified or not does not really matter at the end of the day.  NBA head coaches, especially the better ones, are going to get paid, so be ready for it.

Readers Comments (1)

  1. Great insight… What will they offer a YMCA coach with an extremely high win percentage? ��

    Reply

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