Disagree. Sports are not a customary business. The shelf life of a coach is short. You're not going to entice many guys by offering them a $250,000 raise. Taking a new job often requires uprooting your family, and there is always a ton of risk as things may not work out. Moreover, this is a business where salaries are constantly escalating. Paying this guy $3 million right now may easily be a bargain in 4-5 years. And the return on investment can be exponential. Jim Harbaugh, for example, is probably worth 2-3 times what we pay him. If Brad Underwood takes Illinois deep in the tourney at some point in the next 2-3 years, or if they start competing for Big Ten titles, his salary is easily worth it.
Moreover, again, you have to pay a lot because it takes a lot to get coaches to move. If you're Illinois, you're not going to go out and hire a coach with a losing record, right? Why? Because you already have that. So you want a winner. That limits your choices. And guess what? The schools with winners usually pay to keep those guys. Moreover, when you're winning, everyone is happy, right? So again, it's asking a LOT for a coach to leave a good situation where the fans are happy, and come into a new situation where's the no guarantee of success. So you have to pay for that to happen.
Moreover, Oklahoma State to Illinois is a lateral move. Maybe a school like North Carolina could negotiate a little more with a guy like Underwood, in the sense that the UNC job carries with it a ton of prestige, and a possibility of getting elite recruits and winning national championships, whereas the Illinois job really doesn't. But even then, coaches working in the elite jobs expect, and get, top dollar.
Sure, you could always gamble on a small school guy like Bo Ryan and see what happens, but that's exactly what it is, a gamble. And then you risk season ticket holders losing faith in the program, and not renewing. I like what they did, and think it makes sense.