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Cash Strapped States Pay Millions for Basketball Coaches

When Kentucky Gov. Steve Beshear announced in February that his state was taking nearly $3 billion in federal stimulus cash, he described the decision as necessary to save jobs, preserve "quality of life" and a "strategic investment ... to position Kentucky for the future."

Little did Beshear know that two months later, as teachers, police and other municipal workers breathed a collective sigh of relief that their jobs had been saved — at least for now — the state's primary institution for higher learning would "invest" $32 million in a well-traveled but highly successful basketball coach.

John Calipari, who for nine seasons had pushed the University of Memphis to the pinnacle of college basketball, was introduced Wednesday as just short of a savior for a University of Kentucky program that — by local standards — had fallen on hard times.

"I do not walk on water," Calipari told reporters and eager alumni who had gathered at a packed news conference in Lexington. But his proven ability to walk on hardwood is everything the university's administration asked for, and it decided Calipari was worthy of an eight-year, $31.65 million investment — about $4 million a year.

Little was made of the fact that months earlier the state, citing revenue shortfalls, had cut $20 million in aid to the university, and that its trustees voted to cut 15 staff members and eliminate 170 unfilled jobs.

UK students, who face a 5 percent hike in tuiton, also might be asking: How about a little money for us?

Kentucky Athletic Director Mitch Barnhart, possibly smelling a taxpayer backlash over paying a basketball coach more than 35 times what the governor earns — after Beshear took a 10 percent pay cut — introduced Calipari in a lengthy opening statement that stressed how Calipari and other Wildcat coaches were not paid out of state funds, but from revenue generated by the school's basketball and football teams.

"We do not use state appropriation or university funding to pay our coaches," Barnhart explained. "Except for his base salary of $400,000, the bulk of this compensation is derived from our multimedia rights contract that includes radio and television agreements, other sponsors and conference revenue sharing."

But at a time when President Obama declares that "everyone's got to have some skin in the game," the game of big-time college sports appears immune.

At the same time states across the country are facing huge budget shortfalls, job cuts and reductions of programs and services, basketball and football coaches at top taxpayer-funded universities are pulling down Wall Street CEO salaries.

In Minnesota, for instance, where lawmakers are struggling to erase a projected $4.6 billion budget shortfall over the next two years, University of Minnesota basketball coach Tubby Smith collects at least $1.75 million annually. Smith's seven-year contract — the largest for an employee at the university — is also laden with incentives, including $500,000 for winning a national championship. Tim Brewster, the university's football coach, currently receives at least $1 million annually under his five-year deal.

Both of those salaries easily eclipse that of Minnesota Gov. Tim Pawlenty, who earns a comparatively minor-league sum of $120,303. The Republican governor announced last month that he intends to use his state's $2.5 billion share of the $787 billion stimulus plan to restore education cuts he once proposed. Nowhere in Pawlenty's plan, however, was a proposal to adjust the salaries of Brewster and Smith, whose paycheck is more 14 times the governor's.

Citing the struggling economy, Pawlenty announced Tuesday, alongside Wisconsin Gov. Jim Doyle, that their states will collaborate on more than 80 projects to streamline government operations.

"We face this uncommon economic challenge by trying to find common ground in saving our taxpayers some money and helping, hopefully, to provide better service," Pawlenty told reporters.

According to Doyle, whose state faces an estimated $5.7 billion budget shortfall, "every little bit helps." So why not ask state employees who earn huge salaries to give some of their money back?

Dr. Richard Lapchick, director of the Institute for Diversity and Ethics in Sport, said Calipari's record deal will likely anger employees at state universities nationwide, particularly employees asked to accept furloughs and others at risk of losing their jobs due to budget constraints.

"No rational person can say paying a single coach $4 million a year is just compensation when unemployment levels are where they're at," Lapchick told FOXNews.com. "Even in good economic times, it'd be hard to justify the salaries coaches and professional athletes earn."

Lapchick, the son of the legendary New York Knicks and St. John's University basketball coach Joe Lapchick, said Calipari's contract will likely lead to renegotiations at campuses nationwide, including at the University of Florida, which pays its men's basketball coach, Billy Donovan, a cool $3.5 million annually. Other top-paid basketball coaches at state-supported schools include the University of Kansas' Bill Self, who earns $3 million a year, and Michigan State's Tom Izzo, whose contract includes a guaranteed $1.7 million plus incentives.

"There's no doubt people close to [those contracts] will all be going to their [athletic directors] and say, 'Here we are,'" Lapchick said. "There will be coaches who will use this as a benchmark."

But Kentucky's Barnhart defends the huge salaries, calling Calipari's deal an investment.

"The marketplace that we operate in, to be the premiere basketball program in America, you want the best coach, you must pay a premium price.... If done correctly, the investment in a coach will pay for itself and yield returns for the overall program in general."

It's not like Calipari was earning chump change before arriving at the Lexington campus; Memphis was paying him a cool $2.35 million a year. But his Kentucky deal also has AIG-style bonus incentives, including $3 million if he stays at the nation's all-time winningest basketball program through 2016, as well as two "late model, quality automobiles" and membership in the country club of his choice.

Calipari also can look forward to collecting $375,000 if his team wins the national title — and $175,000 if it makes the Final Four but doesn't go the distance.

But with one out of every 10 Kentuckians unemployed and the state in such dire fiscal straits that Beshear took that 10 percent salary cut in December, Calipari's contract could be hard for some to swallow. Meanwhile, the state's other celebrity basketball coach, Rick Pitino of Louisville, pulls down $2.25 million a year.

"Is it fair?" asked Lapchick. "No, but this is the sports system we've created in this country. Like America itself, in difficult times, the rich get richer and the poor get poorer, and that's what we're going to see in college sports."

Tom Osborne, who won three national championships as head coach of the University of Nebraska's football program, told FOXNews.com that salaries for college coaches have "escalated tremendously" since he earned $600,000 in 1997, but he defended larger athletic programs like football and men's basketball as critical to a university as a whole.

"People have decided that the most fiscally disadvantangeous thing you can do is to have your program fall apart and people no longer want to come to your games," Osborne said. "It affects all sports. Maintaining a strong viable program is in the best interests of the athletic department and the university."

Osborne, who served six years in Congress after leaving the Cornhuskers' coaching job and has returned to the school as its athletic director, said football is the only one of the university's 23 sports that is profitable. Coach Bo Pelini signed a contract extension on Monday that boosts his salary to $1.85 million a year, the sixth-highest paycheck in the Big 12 Conference.

"We do live in a competitive, free-market society for the most part," Osborne said. "Certainly, these salaries are high, but it's really expensive if you lose your coach and it's really expensive if you start having empty seats."

Asked if coaches like Calipari and the University of Connecticut's Jim Calhoun, who makes $1.6 million a year, should consider working for less in light of budget crunches in their states, Osborne replied: "If their school is tremendously impacted, it might be a nice gesture. I can understand the concern and where some people feel it's gotten out of hand, but in some ways, the market will drive it and it could go either way on us at some point."

During a postgame press conference in February, following an easy win over South Florida, a political activist asked Calhoun about his salary.

"Coach, considering that you're the highest-paid state employee and there's a $2 billion budget deficit ... do you think ...?" Ken Krayeske reportedly said.

"Not a dime back," Calhoun replied. "I'd like to be able to retire someday. I'm getting tired."

After telling Krayeske to "shut up," Calhoun defended his salary, saying the UConn's men's program generates $12 million for the university.

But coaches like Calhoun and Calipari are the exception, according to NCAA spokeswoman Jennifer Kearns. Of the tens of thousands of full-time and part-time coaches in all three collegiate divisions, Kearns said fewer than a couple hundred coaches at top Division I institutions make $1 million or more a year. She said a Division I tennis coach makes about $44,000 annually; a golf coach earns about $42,000; and a gymnastics coach makes approximately $80,000.

According to the latest NCAA Gender-Equity Report, the average Division I head football coach earned $552,000 in 2005-06. In basketball, that figure was $409,600 for men and $187,300 for women.

"Coaching salaries are determined by economic forces at the individual school and market value," Kearns wrote to FOXNews.com. "It is important to note these same forces apply to hiring professors and other faculty members. Market-value reality means coaching compensation packets can be worth millions of dollars."