This is not a business question, but rather a moral/ethical question in my opinion. From a business standpoint, it is absolutely a reasonable contract. Saban was purchased at market value. The return on this investment will likely be tremendous. And the University's pockets are more than deep enough to make such a purchase. So from a pure business standpoint, there is nothing wrong with Saban making $4 million a year because that's just the way these things work.
The real question is more of an ethical question. Does it bother you that a football coach makes $4 million a year, while a fireman, teacher, police officer or other public servant lives paycheck to paycheck? If so, then this is an indictment of our society, not specifically the University or Saban himself. Now, I'm not going to sit here and tell anyone to boycott football or anything of that nature. That would be horribly hypocritical of me. I'm as big of a fan as anybody (otherwise I probably wouldn't be posting on this board). I just think that this question is much more loaded than whether or not Saban is worth the money he's making.