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The Case for Jim Christian

A basketball article about finance.

NCAA Basketball: Boston College at Notre Dame Matt Cashore-USA TODAY Sports

Boston College’s decision to keep Jim Christian was announced on Monday was immediately jumped on by the Eagle fanbase. It was a decision that drew almost entirely negative response. But truthfully, the more I read, the more convinced I am that the decision makes sense.

There are obviously a lot of questions given the present state of the world. How would a new coach be found, interviewed, vetted, and hired in a world of social isolation and quarantining? Won’t it be near impossible to hire ‘your guy’ next year if there’s a only a couple of firings this year? Can a new coach keep together the recruiting class if he was limited to just FaceTime calls and text messages? These are all good questions, and now we will never know the answers. But looking past them, there’s an undeniable case to be made that keeping Christian makes sense economically.

We know, per our sources, that the Coronavirus pandemic played a part in the decision to retain Jim Christian. That is known. Anything after that, specifically regarding the actual finances, purely speculation.

So with that said, let’s speculate (in a well-informed and reasonable manner).

First, some ground rules/basic assumptions that I hope we can all agree on. Jim Christian makes about $1.375 million right now. That’s the lowest of publicly available P5 coaches. I’m going to go ahead and guess if Martin Jarmond were to replace him, salary would probably have to bump to at least $1.5 million t(and even then, that would only be the second lowest in the P5). In order to be competitive, we’re probably talking closer to $2 million. That’s the number we’re going to use.

Second, we have to talk about buyouts. There’s one for Christian, and one for the head coach you’d be poaching. For Christian, who was extended through 2021-22, I’m going to guess it’s about one year’s salary (though Christian was coming off his best year when he signed, and certainly had more leverage than Addazio when he signed his extension. If it’s not one year’s pay, I’d wager it’s higher rather than lower). If you wanted to poach David Cox from URI, that’s probably another million; at least that would fit in with the high mid-major’s here.

So the price tag on a change of leadership is $4.375 million, give or take. In the long run, that’s probably not a lot for a P5 athletic department. But there’s a number of factors that make that $4.375 million dollars nearly insurmountable at this exact moment.

The Boston College Athletic Department has, as I view it, three main ways to put together those funds necessary to buy out Jim Christian and hire a qualified replacement.

  1. Source it from the operating budget
  2. Fundraise the money from some big donors
  3. Ask Father Leahy for the cash, either in the form of an internal transfer or a loan

And fortunately for Jim Christian and his job, all three are in unique circumstances that prevent them from being leveraged.

So let’s dive into them, in reverse order of probability.

Asking Father Leahy for the Money

Quite frankly, big national colleges and universities are in a pretty precarious position right now. At least, it’s as precarious as it’s been in recent memory. Moody’s just lowered it’s outlook on Higher Education from neutral , to negative, predicting widespread instability due to the Coronavirus pandemic. Nearly a third of the schools Moody’s tracks work at an operating deficit. Even if BC isn’t one of those schools, it looks like Nationally budgets are going to be strained in higher education in the near future. Schools are on the hook for signed contracts for expenses but are refunding room & board paid by students. They’re further investing in the infrastructure to teach students from home. Those budgets will be under more pressure if COVID-19 (or even it’s threat) doesn’t subside by the start of the fall semester.

The pandemic is also coming at a time where a lot of smaller factors squeezing higher education were starting to converge. First, there are simply less students applying to college: with the exception of 2006 & 2007, birth rates in America have declined every year since 2003. This will almost certainly squeeze smaller and less prestigious colleges first, but it seems almost certain to me that Father Leahy and the Board are aware of the risks it could pose.

Second is the increasingly unsustainable nature of higher education in this country. Cost of attendance at BC this year was an absurd $72,736. Sticker shock has already set in for many American families. We are fortunate that BC remains a need-blind institution, and has increased its financial aid budget at rates consistently higher than its tuition increases. But those in higher education are “pretty terrified.” And those aren’t my words. They’re from Vice Provost for Enrollment Management John Mahoney, BC ’79, who last year stressed that BC’s commitments to being need-blind (an exclusive club of about 38 schools in the US), “are lofty principles to live up to—[they’re] very expensive [principles] to live up to.”

With all this in mind, the idea of any money coming to the athletic department to buy Jim Christian out or find his replacement is unlikely and imprudent. That money, as much as I love sports, can be better used elsewhere.

The Private Donors

BC has many successful, big donors. But I don’t see them buying out Christian and funding a replacement at this moment in time. The markets have lost a third of their value and volatility is at an all time high. People are anxious, and these donors (or their money people) are trying to get their assets reorganized to either shield from further losses or take advantage of a fiscal stimulus powered recovery.

They’re probably not willing to liquidate $4.375 million of assets that were worth nearly $6 million in January. Besides, Jarmond can’t even do any fundraising trips right now because he’s sheltering-in-place.

Get it out of the Operating Budget

One would think that BC might have the ability to meet out the financial obligation of replacing Christian out of its operating budget. And if I had to guess, it probably could. But the cancellation of March Madness and every spring sport does not in-significantly reduce BC’s revenue streams.

Obviously, the big dog is March Madness. Even though the Eagles haven’t participated in the Big Dance in a decade, they benefit greatly by the ACC’s typical performance in it. That’s why joining a power conference gives a program such a benefit. The payouts are distributed in a complicated formula that the Washington Post can better explain, but for simplicity’s sake each game appearance (including the first round) is worth $1.67 million (distributed over 6 years) to the conference. The ACC looked poised to send about five programs this year, and based on seeding I would wager about 13 wins. That’s a total of $30.06 million the ACC and just over $2 million for each of it’s fifteen members. That’s about 5% of the annual basketball revenue, per the Department of Education’s Equity in Athletics Data Analysis. That may not seem like a ton, but BC is a team that needs every dollar to be competitive. And we have yet to take into account the TV money in the BC lost from the cancelled ACC tournament.

Nor have we taken into account the lost revenues in other sports, from Men’s Hockey to Women’s Lacrosse. And while BC can likely avoid somes of the expenses associated with the Spring season, they can’t avoid the costs of scholarships nor staff associated with those sports. They also lose the entirety of the $7 million in revenue these sports bring. You can’t be making capital upgrades to your basketball team in that world, especially when you consider that the smaller sports are subsidized by around $2 million a year by the big sports. It’s just a losing equation.

We are fortunate Boston College is not a mid-major or G5 school. For the schools in those conferences, especially those hyper-reliant on basketball to fund their athletic departments, there is genuine fear they could see major reorganizations and program cuts in their future. Every school is in trouble if there’s a COVID-19 resurgence in the fall that wipes out the football season, the real money making sport for these schools. But we will cross that bridge when we come to it. Martin Jarmond may have that in the back of his mind, but right now his goal is on making up nearly a full year’s costs on part of the revenue. There’s simply not $4.375 million to spare.

In the end, this is just an instance of the perfect storm. Nobody here is making the wrong decision. Father Leahy, Martin Jarmond, and everyone in between are being responsible stewards of their respective finances. I understand it. I’m not willing to replace him as Head Coach if it meant cuts to a smaller sports program or student aid.

There is a case that says that this year, pending the grad transfer market, could very well resemble the 2017-2018 team that was Christian’s best. The Eagles have look to have three capable guards and some solid athletes off the bench and in the front-court. Only the five spot looks uncertain, and the Eagles could very well go small in crunch time. It’d also be the first time that this Eagle team had some consistency in his upperclassmen.

Besides, maybe 7th time really is the charm.