Football
Why Mike Gundy is underpaid at $3.45 million
Mike Gundy is pretty valuable to the success of Oklahoma State.
USA Today came out with its annual college football coaches salary database on Wednesday and Mike Gundy was near the top of the list. His $3.45 million salary sparked some pretty intense feelings on Twitter.
He’s overpaid!
Pay him more so he won’t leave!
I can’t believe he can’t afford a jacket he’s not ashamed to leave untucked!
OK, so not the last one but it does raise the question of whether or not Mike Gundy is paid properly. As Deadspin pointed out, you’re worth whatever somebody will give you but that’s not a very fun answer so let’s look deeper.
I want to show you why why Mike Gundy is underpaid at $3.45 million.
To do so let’s take another school in the Big 12 that has traditionally been pretty good at basketball and not that great at football.
Hmmm…let’s look at Iowa State.
In 2012 Iowa State’s athletic department generated $55 million in revenue, $12 million of it in ticket sales.
That’s a lot, but nowhere near what OSU generated. That same year OSU generated $87 million in revenue, $23 million of it in ticket sales.[1. We’re presuming that the majority of collegiate revenue is basketball/football related and really, if we’re honest, football related. I don’t feel like this is a stretch, especially with tickets.]
The catch is that Iowa State has a bigger basketball arena and a football stadium that is more or less the same size. I wasn’t great at statistics in college but the difference in what the two schools generated ($32 million) seems to be greater than Mike Gundy’s salary $3.45 million.
Now I know what you’re saying.
Boone did that!
Holder did that!
Heck, Weeden did that!
And those things are true, to disparage what hundreds of other folks have done to make OSU successful is trite, but remember most of those people are under the guidance of Gundy.
Let’s look at OSU’s football record compared to ISU’s record over the last few years.
Last three years
OSU: 31-8
ISU: 17-21
And football attendance records over that same timespan…
OSU
2012 — 56,000
2011 — 57,000
2010 — 51,000
ISU
2012 — 55,000
2011 — 54,000
2010 — 45,000
OSU with a slight lead, but here’s the thing. OSU is charging way more for its season ticket packages than Iowa State is. The simple reason: It can, because of that “Big 12 Champions” banner hanging in the east end zone.
Really, take a look:
Here’s Iowa State…
Here’s Oklahoma State…
OSU charges as much for recent graduates as Iowa State does for donors!
Winning matters when it comes to the elasticity of ticket sales (let’s look back at this if Iowa State wins 30 games over the next three years) and Gundy is at the head of all that.
But look at how many more donations OSU has gotten than Iowa State, you say. That’s true, but if you don’t think that’s Big 12 title-related, you’re kidding yourself.
Football is the axis upon which this business model swings and Gundy is killing it right now. In 2005, the year Gundy took over, OSU’s revenue was $51 million with total ticket sales at $13 million. The increase of that alone to $87 million in 2013 means that Gundy is wildly underpaid at $3.45 million.
But inflation, you say. What about it?
$87 million in 2013 dollars is still $73 million in 2005 dollars so even if you think Gundy is responsible for, say, 25% of athletic department revenue AND take inflation into account, he’s still worth more than $3.45 million ($73 million – $51 million * 25% = $5.5 million).
I’m totally ignoring the fact that Gundy could be replaced with somebody just as competent who could have done the exact same thing — this is the great equalizer for athletic directors and why they’re all praying Texas doesn’t do something stupid like blow the market on Saban at $10 million a year.
And before we start thinking any fool could coach Weeden and Blackmon to a Big 12 title, remember that Mack Brown only has two conference titles at Texas in his time there (I believe the nerds call this “value above replacement”).
Gundy is one of only seven coaches of the 11 highest paid to have a conference title. Going to the BCS is no joke and Gundy turned the trick in just six years as the head coach at Oklahoma freaking State.
And he might do it in two of his first eight.

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