x
Breaking News
More () »

Sean Miller doesn't ask Arizona for raises, but he keeps getting them

Sean Miller never requested all of this.

Sean Miller never requested all of this.

Five times since his hiring in 2009, his bosses at the University of Arizona have amended his coaching contract with sweeteners, including multiple pay raises and 15 more hours of use per year on a charter jet.

In 2013, they even talked about increasing his salary by another $100,000, but Miller said he didn’t need it and declined. A year later, they awarded him a stake in a privately donated investment deal currently valued at nearly $4 million.

“I’m being proactive,” said Miller’s boss, Arizona athletics director Greg Byrne. “I don’t believe he’s asked for it one time.”

Unlike other top coaches in college basketball, Miller doesn’t even have an agent to help maximize his earning potential. He doesn’t need one, apparently, because he’s already got all the leverage he needs — even if he’s never quite reached the Final Four of the NCAA tournament, including this year, when his team was bounced in the first round.

Coaches with credentials like his are in high demand — beneficiaries of a pay market that keeps spiraling upward, according to a USA TODAY Sports analysis of documents it acquired in conjunction with the Sports Capital Journalism Program at Indiana University-Purdue University Indianapolis. This year, Miller was one of 24 coaches in the tournament making at least $2 million, up from 11 in 2011.

DATABASE: Salaries for every tournament coach

And that creates a dilemma of sorts for Arizona, just like other top programs with big budget challenges: They can say enough is enough and risk starting over with a cheaper coach. Or they can keep upping the ante, hoping to keep their coach from leaving for greener pastures.

Arizona has made its choice, providing a case study on the challenges of how to pay for it all while tensions rise in the quest for revenue.

In recent years, the school has tried to keep up by foraging for new money streams on campus and off, leading to creative enticements this year that helped make Miller one of the five highest-compensated coaches in the tournament. USA TODAY Sports’ analysis measured his compensation value this year at $4.9 million, up from about $2.3 million in 2011, thanks largely to an unusual deferred compensation package derived in publicly traded units of an oil pipeline and storage business.

Meanwhile, Arizona’s bottom line is still stretched enough that the school has considered imposing a new $200 fee on students to help fund football stadium upgrades.

“There are limits to this in my mind, to how far (the market) goes, and we just haven’t really hit them yet,” Arizona Board of Regents Chairman Jay Heiler told USA TODAY Sports. “But at some point I think things will settle down a little bit, and we won’t be in such a white-hot, overheated environment of escalating coaching salaries. We haven’t gotten there yet. So far we’re still riding the delta upward.”

Supply and high demand

Growing up in western Pennsylvania, Miller lived in a middle-class home and spent much of his time on the court with his father, John, the legendary former coach at Blackhawk High.

“We weren’t going on big vacations,” John Miller said. “We were in the gym most of the time.”

It paid off. Sean Miller, the oldest of four siblings, played for his dad before moving on to play at Pitt. His brother, Archie, did the same before playing at North Carolina State, where Sean was an assistant coach. Both followed their father into coaching and are still picking golden apples off its tree.

As the head coach at Dayton, Archie, 37, just received an undisclosed pay increase and a third consecutive contract extension from the private school after making his third appearance in a row in the NCAA tournament.

For Sean Miller, 47, his star rose after four 20-win seasons at Xavier, leading him to Arizona, where he and his family have a 6,800-square-foot home purchased for $3.25 million shortly after his hiring in 2009, according to property records. He has a 308-108 career record and is one of the best active coaches never to have made the Final Four, falling short four times in the Elite Eight.

“Arizona has reached out and really made it pretty darn good,” John Miller said. “Now if he would leave, I guess I would have to say maybe more towards an NBA thing, you know? But knowing him the way I know him, I just don’t know if he’s meant for the NBA. Some guys aren’t quite meant to do all the traveling and game after game after game. He’s more of an in-the-gym guy.”

Through a spokesman, Sean Miller declined to comment for this story. So did his attorney, who reviews the contract improvements initiated by Byrne.

Byrne and John Miller say money is not a motivator for Sean. But ambition can be even more influential. John Miller has noticed that some of his son’s friends have moved on to coach in the NBA, particularly former Florida coach Billy Donovan, now with the Oklahoma City Thunder, and former Arizona star Steve Kerr, now with the Golden State Warriors.

“I don’t know if that’s maybe got him looking,” John Miller said. “At this point, I don’t know. I haven’t really discussed it with him too much lately. I think he’s happy where’s he’s at, and I think he has his mind set on getting into that Final Four.”

Maryland nearly lured him away in 2011, a dalliance that was followed by the first of his five contract amendments at Arizona, which included a two-year extension, a pay raise and more time on the jet for recruiting. It was “close,” Byrne said of Miller’s decision in 2011.

Like many of his peers in similar situations, Byrne doesn’t want to risk losing the head of a successful program that accounted for $22 million of $87 million in total operating revenues for Arizona athletics in fiscal year 2015, according to the school.

“Coach Miller obviously is a high-demand coach in his sport,” said Heiler, chairman of the regents that oversee the state’s three public universities and approve such contracts. “It’s driven not only by the rest of the college basketball world. It’s also driven by the professional basketball world. Scarce leadership resources puts constant upward pressure on compensation. … We deal with it like any board would in any industry in any setting regarding its top leadership talent.”

They also know there are limits out there. Just ask Arizona students.

‘Negative feedback’

Arizona is one of the last holdouts in the Pac-12 Conference — one of only two public schools in the league that didn’t receive funding in athletics last year from student fees.

“Philosophically, it’s something I’d prefer not to do,” Byrne said.

But he’s starting to wonder if he might have no other choice. After in-state rival Arizona State recently added a mandatory $150 annual student fee to fund athletics, Arizona is under pressure to enter that race for revenue. This year, Arizona officials considered adding a $200 student fee to help fund football stadium upgrades and might push for it again next year.

Huge television contracts have dramatically boosted the revenues of college sports, helping Arizona’s operating revenues more than double from $40 million in 2005, not adjusting for inflation. At the same time, the rising revenues of college sports have fueled escalating expenses.

In Arizona’s case, athletics had about $78.2 million in generated operating revenues last year, compared to $80.7 million in operating expenses, which ranked sixth among public schools in the Pac-12.

To bridge the shortfall, Arizona receives university subsidies much like most of its public-school peers in the Power Five conferences. In Arizona’s case last year, that came in the form of $1.5 million for utilities, plus $7.4 million in tuition waivers from the state board of regents to help pay for athletics scholarships, a benefit also given to ASU.

By adding a student fee, Arizona would be keeping up with the competition in one respect. It would be gaining opposition in another.

“I’ve heard overwhelming negative feedback from students (on the student fee),” said Joe Zanoni, an Arizona student and senator for the university’s Associated Students. “Lots of students, especially in engineering, are here for five years and they’d be paying $1,000 to the athletic department. That’s a big chunk of change for our generation, especially because we’re getting buried in student loan debt, too.”

Byrne said the football stadium needs the funding, arguing that parts of it are nearly 100 years old and need to be updated to stay operational. Such improvements also are relevant to the whole athletics department because football is its biggest cash cow and one of at least two critical sources Byrne cites for increasing revenue and funding rising expenses.

The other is fundraising, one of Byrne’s strengths and the biggest reason Miller’s compensation value jumped so high this year.

Creative solution

It’s called the Longevity Fund. Byrne said it comes from a private donor who offered a gift of 500,000 units in a master limited partnership to be used at the discretion of university President Ann Weaver Hart. Of that amount, a block of 175,000 units each is allocated to help in retaining Miller and football coach Rich Rodriguez, with another 100,000 going to help retain Byrne.

Financial Times identified the donor as Jeff Stevens, the CEO of Western Refining Logistics, a limited partnership in El Paso. Stevens didn’t return a message seeking comment, and the school has declined to identify the source of the fund. The full value of Miller’s Longevity Fund is nearly $4 million, according to the unit price this week.

“We thought that was a creative solution and one that also incentivized staying at Arizona,” Byrne said.

The university added the fund to Miller’s contract with amendment No. 4 in 2014, stipulating then that he could become vested in a quarter of the fund’s value by this year and then receive a cash equivalent of the fund’s full value if he stayed at Arizona through May 2022. The contract also said he would receive the vested value of the fund even if he were fired “without cause” before then, which usually means getting fired for not winning enough games.

On the other hand, he doesn’t get any of the fund’s value if he voluntarily leaves for another job. A separate retention fund in his contract gives him $2.1 million if he stays at Arizona through April 30.

That means if Miller were to leave Arizona before the end of next month, he’d be forfeiting about $6 million. Last week, Miller quickly squelched speculation about returning to his alma mater, which recently had an opening.

“I have one of the great jobs in college basketball at Arizona,” Miller said in a statement. “I have no interest in becoming the head coach at Pitt.”

The longevity and retention funds provide an incentive to stay, but just in case it wasn’t good enough in 2014, Arizona reworked his contract in 2015 with amendment No. 5. This time, the contract was changed to let him collect on the full value of the Longevity Fund in 2020 instead of 2022. It also vested him at two-thirds of the units’ value last fall instead of one-quarter, accounting for a big one-time bump in his compensation value this year.

Miller “knows that President Hart and I have been very pleased with the job he has done as our men’s basketball coach, and we’ve tried to reflect that by keeping him between four and five years on his contract,” Byrne said.

Asked why the university accelerated the vesting and payout dates for Miller last year, Byrne said, “That was a discussion between Sean and myself. … We were looking at the marketplace and thought this was a good solution and the best chance to have our team in place during this time frame.”

‘Not sustainable’

Another way to explain it is that Miller simply had the upper hand. The leverage comes from his record and the market. And the market will keep going up until it can’t, possibly because of legal, political or economic factors.

Legal challenges continue to seek the possibility of more compensation for college athletes, who can receive scholarships and money for expenses but not salaries. The more money coaches make, the more it seems unfair that the players don’t share more of the wealth.

Sports economist Andrew Zimbalist called it an artificial market.

“The reason why the coaches are able to command those salaries is because the players aren’t getting paid,” Zimbalist said. “The coaches are getting paid for the value of the players they are recruiting.”

And when subsidies and student fees are being used to balance the books and fund other expenses, the market starts looking like a bubble destined to burst, Zimbalist said.

“Politically, it’s not sustainable," he said. "Legally, it’s not sustainable. Economically, it’s not sustainable. And it’s going to be changed.”

Heiler, the chairman of the Arizona regents, said he wonders where the ceiling might be.

“I think institutions are going to have to … realize there’s something to be said for having coaches who at some point feel like they are being adequately compensated to reach all of their goals and aspirations,” Heiler said of the market in general. “How much is enough, you know, to be a collegiate coach in basketball and football and to be happy and fulfilled and to live a wonderful life?”

PHOTOS: Top 15 highest paid men's NCAA hoops coaches

Contributing: Jodi Upton

Follow sports reporter Brent Schrotenboer on Twitter @Schrotenboer. E-mail: bschrotenb@usatoday.com

Before You Leave, Check This Out