Let me say that I know Coach Baker and I believe him NOT to be a racist. With this said, he has shown incredibly poor judgment. This must be dealt with and I am afraid that it will lead to his job. That may be tough to swallow but you can't have role models saying things like this. We are held to a higher standard , right or wrong.
As to the meaning of the word, I don't care what the dictionary says about it. I know how it is used in our society today. Many people take offense, that is why it should NEVER be said.