Despite the fact that he has never won a championship, the University of Michigan is rumored to be offering Jim Harbaugh $42 million for six years to return to his alma matter and become the highest paid coach in college sports.
Harbuagh has said that he doesn’t want ”to talk about any other job than the one I have,” which is the head coach of the San Francisco 49ers. Michigan hopes that his lack of a statement is a sign of possibility. For a former Michigan quarterback, it’s a homecoming he has to be considering, especially with that kind of superlative salary on the line. Bruce Feldman at Fox Sports One is claiming that the $8 million dollar number “isn’t even close.”
If Michigan really wants to make sure that Harbaugh returns to Ann Arbor, it shouldn’t be.
With the potential upside that he would bring to the program, Michigan could offer Harbaugh $2-3 million more and still breaking even on their investment in one year.
Having been the big man on Stanford’s campus as their coach from 2007-10, Harbaugh knows college football. At Michigan, he would be a formidable recruiter, able to evoke the tradition of his former iconic coach, Bo Schembechler. With a .700 career winning percentage as a coach in college and the NFL, Harbaugh is a winner. As the rumors have swirled, former players have come out stating that Harbaugh turns losers into winners.
Michigan needs that touch: in the first bowl season in a post-BCS world, Michigan had a losing season for only the third time in the last 45 years. At 5-7, Michigan wasn’t anywhere close to the first-ever college football playoffs. As if that wasn’t bad enough, they’re also being forced to watch their natural enemy, Ohio State, play in the Sugar Bowl against Alabama. If the Buckeyes beat Alabama, the Michigan torture would continue with an OSU national title shot.
The reported Harbuagh offer is indisputably a Hail Mary full of cash, and one that has made Michigan football part of a December college football discussion, even if it’s not for what’s happening on the field. More than 100,000 people have watched a YouTube video of Harbaugh-at-Michigan highlights with Matthew McConaughey's voiceover from the Lincoln commercial. A homecoming for Harbaugh would instantly put Michigan back into spotlight of the billion-dollar industry known as College Football, and provide a fresh start to one of top brands in the game.
In addition to the negative on-field attention, off-the-field problems were just as bad this year. In his second year as athletic director, former Domino’s CEO and former Michigan backup QB David Brandon pushed a bottom-line-first agenda that alienated alumnae and current students. It got so bad, that the school resorted to “Groupon-like services” to fill seats. Brandon stepped down before the season was over.
Beyond the embarrassment, missing bowl games carries a real economic cost. An appearance in even a third-tier bowl is worth a couple million dollars. For their trip to New Orleans against Alabama, Ohio State is bringing in a cool $17 million. If they get to the 2015 National Championship game, that’s another $24 million. While the current Big 10 revenue share agreement would limit Michigan’s direct share of playoff bowl payout to only a few million, it would cast a halo worth many millions more on the school and program. One area that would immediately benefit is revenue from ticket sales.
While they suffered from a lackluster home schedule that didn’t include Ohio State or Michigan State, according to TiqIQ, Michigan football tickets on the secondary market finished this season with an average price of only $85. That’s 54 percent less expensive than 2012, the last season neither of their top two rivals visited the Big House.
With Harbaugh at the helm, however, even expectations for a marginally winning season and a bowl birth could have an outsized impact. According to TiqIQ data, the most expensive average price for a college football team on the secondary market this season was $237 for none other than Ohio State. Over the past three years, Michigan has had an average price close to $200 on the secondary market. Harbaugh could easily increase that to $250. At a capacity of 109,000 fans each game in Michigan Stadium, that would be almost $18 million of market value created for every game compared to this season.
Even if Michigan claims just 10 percent of the economic impact, though, it could grow the program’s regular-season bottom line by $10-$11 million. That would be enough to cover the salary they’re rumored to have offered Harbaugh and even a bit more.