The cost of changing coaches
Agent Neil Cornrich worked hard over the past couple days to hammer out the details of Mike Stoops five-year contract to become the University of Arizona's new head football coach.
Given the win-at-all-cost pressure placed on today's college coaches, severance agreements are the golden parachutes that offer financial security. Frank Solich, the now former Nebraska football coach, and John Mackovic, who was ousted at Arizona five weeks into the season, were both bought out for big dollars. And it's not just for the coaches at the larger programs. Mike Kruczek, who now no longer coaches at Central Florida, and Chris Tormey, who was fired by the University of Nevada on Sunday, are owed hundreds of thousands of dollars.
"The whole enterprise has gotten out of proportion," said Bill Carr, the former athletic director at Florida (1979-1986) and Houston (1993-1997) whose company, Carr Sports Associates, now consults with schools interested in hiring new college coaches. "It's absurd that this type of money is being paid out, but that's the function of the marketplace."
Save for Tom Cable, whose contract as Idaho's football coach expired at the end of this season, every Division I-A football coach fired this season had at least one season left of his contract -- meaning every one of them was owed money after he packed up his office, assuming he wasn't fired for just cause, including NCAA violations.
|A look at the status of the contracts of Division I-A coaches who were fired this season:|
John Mackovic, Arizona
Contract through June 2006
Mike Kruczek, Central Florida
Contract through 2007 season
Tom Cable, Idaho
Contract through 2003 season
Buyout: No severance
Jackie Sherrill, Mississippi State
Contract through 2005 season
Buyout: Being Negotiated
Frank Solich, Nebraska
Contract through June 2006
Chris Tormey, Nevada
Contract through 2004 season
Rick Minter, Cincinnati
Contract through 2006 season
Gary Nord, Texas-El Paso
Contract through 2007 season
Buyout: Being Negotiated
Cooper got a lump sum payment of $1.8 million when he was booted as Buckeyes coach in 2000. Jim Donnan, who was Georgia's head coach for five seasons, received $2.4 million when he was fired that same year. Bob Toledo is collecting more than $1.3 million over a six-year period after being fired by UCLA last year.
Among this year's crop of coaching casualties, Solich received one of the biggest buyouts. Despite the fact that Solich's Cornhuskers reached the national championship game in 2001, he went 16-12 over the past two seasons and school officials bowed to pressure from Nebraska's boosters and exercised the buyout clause in Solich's contract. With three years remaining on the deal, plus a $24,585 bonus for the Huskers' invitation to a bowl game, Solich is due $786,693.
Tommy Tuberville would have topped the list had Auburn dumped him as the Tigers' coach. Auburn president William Walker and athletic director David Housel apparently were willing to pay the $4 million Tuberville would have been owed, given that they secretly courted Louisville coach Bobby Petrino just two days before the Tigers played cross-state rival Alabama on Nov. 22. Auburn won the game and, after meeting with Walker on Monday, Tuberville said he will return to coach the team next season.
"I know people will use this against us in recruiting, but they better be recruiting hard because they're going to be recruiting against me," Tuberville said.
The not-so-bitter goodbye
Getting ready to be ushered out is simply part of the job.
Expectations everywhere have been raised and with the "win today, not tomorrow" attitude on the minds of the fans, the pressure that school executives feel from boosters to field a winning team has resulted in lowering the average tenure throughout college football.
Eight of 11 head coaches in the Big 10 have been with their teams for no more than seven seasons. With the exceptions of Bobby Bowden at Florida State and Mike Bellotti at Oregon, there are no other coaches in the Atlantic Coast or Pacific-10 conferences with five years' tenure at their schools.
Having a winning season, though, is no longer good enough. Donnan lasted only five years at Georgia, despite compiling a 39-19 record. Cooper had a .703 winning percentage over 13 seasons, but lost to Michigan 10 out of 13 times.
Clemson's Tommy Bowden, who seemed as good as gone a month ago, received a three-year extension on Tuesday thanks to his team's strong finish. Now Clemson officials won't have to sweat over his $750,000 buyout for a while.
The proliferation of agents representing college coaches over the past decade has helped boost coaching salaries and severance pay. More than 25 college football coaches make at least $1 million per year and many are scheduled to make that kind of money should they get canned.
"When coaches got hired, they used to only worry about how much they would make each year," said Jimmy Sexton, an agent who represents 10 college football coaches, including Tuberville, LSU's Nick Saban and Miami's Larry Coker. "Now they are worried about how much the school will pay them if they get fired. That's the nature of the business these days."
A coach's tenuous tenure
Buyouts have become commonplace partly because coaches who are fired without "just cause" must be compensated, just like everyday business executives.
|INSIDE THE CONTRACTS|
TOMMY TUBERVILLE, AUBURN
Base salary: $185,000
Entertainment allowance: $25,000
Terms of settlement:
4g. "In the event Auburn terminates this agreement prior to the expiration of five years (Dec. 31, 2007) for reasons other than violation of Auburn, SEC or NCAA rules and regulations or the personal conduct clause discussed herein, Auburn will be required to pay coach within 60 days $1 million, plus interest."
18. "Should Auburn elect to terminate this agreement without just cause then Auburn will be liable to coach for the payment of liquidated damages in the sum of $3 million. This amount will be paid in three annual payments of $1 million each, with the first payment due one year after the date of termination."
FRANK SOLICH, NEBRASKA
Base Salary: $295,010
Estimated endorsements: $460,000
Terms of settlement:
13. "It is understood and agreed that any and all claims which may arise in coach Solich's favor against the university and its board members, administrators, employees and agents by reason of such termination of employment, shall be strictly limited to an amount of liquidated damages to be determined by multiplying the number of full months remaining in the term of this contract at the time of any such termination by the then current monthly salary It is further understood and agreed that in the event of such termination of employment by the university, the university shall pay such amount of liquidated damages to coach Solich in a single lump sum payment within 30 days of termination of his employment."
MIKE STOOPS, ARIZONA
Base Salary: $350,000
Public Relations: $50,000
Terms of settlement:
18. "In event of such termination, university shall pay to coach an amount equal to one-half of the sum of his then-current program salary and related compensation, but not less than $400,000 per year, or a pro rata portion thereof for the remaining period of the contract, as liquidated damages in lieu of any and all other remedies or equitable relief."
RICK MINTER, CINCINNATI
Base Salary: $165,000
Terms of settlement:
18. "If the university for its reasons chooses to terminate the contract prior to the completion of the contracted date (Feb. 28, 2006), the university will be not only responsible for the fulfillment of the base salary term, but as part of the severance recognize the prior years of service by the coach by adding $10,000 for each completed football season of service."
One of O'Hagan's clients, Kruczek at Central Florida, was fired on Nov. 10 and is now owed $740,000 -- the amount of the combined base salary he would have received over the next four seasons. UCF gave Kruczek a three-year extension in April that would guarantee his base salary through the 2007 season, but let him go after the Golden Knights lost seven of their first 10 games this season.
That isn't unusual. For recruiting purposes, colleges routinely extend a coach's contract to at least three years and, more typically, four or five. If a coach's term is running out, opposing schools can use that in recruiting battles -- implying that the coach might not be around to see the recruit play his senior year.
"These buyout fees have been boosted by the fact that a school can't afford not to extend a coach's contract because of the perception when it comes to recruiting," said Gerald Scully, a sports economist and author of "The Market Structure of Sports."
Opposing Big Ten coaches, for example, could use the fact that 76-year-old Penn State coach Joe Paterno reportedly only has one more year remaining on his contract, in a negative recruiting campaign. That Penn State lost nine games for the first time in school history this season only fuels speculation that his days are numbered.
Tuberville's five-year contract is only nine months old. Under the terms, if Tuberville left for another school, he would owe Auburn $3 million. But if he is fired at any time under the contract, Auburn would have to pay him at least $4 million over a three-year period.
Schools that haven't signed coaches to new contracts often have a rollover that automatically gives a coach a one-year extension at the end of every season.
South Carolina athletic director Mike McGee estimates that 50 percent of current head football coaching contracts include the rollover.
"Then if you don't automatically roll it over, it looks like you have no confidence in your coach," said McGee, who is known for being judicious with extending coaches' contracts and often will not do so after a team has a losing season.
McGee, however, recently agreed to extend Lou Holtz's contract another year though 2008 -- even though the Gamecocks finished with only five wins this season. But there's a payoff to the extension -- there's no buyout if Holtz leaves for another program or if McGee decides to terminate the veteran coach at any time.
While some lower-profile schools let their coaches' contracts expire -- Idaho's Cable was not renewed on Nov. 22 -- some prominent schools involved are guaranteeing coaches more money than ever before, thanks to the NFL. NFL teams guarantee coaching contracts, while college contracts typically only cover a coach's base salary. In order to compete, some schools have had to guarantee outside income, including money from shoe companies and coaches television shows.
"You have to agree on a fixed amount that you'll pay if you fire your coach," said Bill Byrne, athletic director at Texas A&M who spent a decade as athletic director at Nebraska. "I'm not ever going to pay off the national debt just to make a coaching change."
Byrne negotiated Solich's contract with Nebraska. Instead of being guaranteed all the revenue he would have received if he completed the terms of his contract through June 30, 2006, Solich would receive only his annual minimum through the life of the contract. Solich makes about $1.1 million per year in total compensation, but his minimum salary through the university is $295,010.
Several coaches who have been fired from universities have earned their severance pay by accepting other jobs at the school.
In March 2001, when Louisville basketball coach Denny Crum agreed to resign a year before his contract was up, the university covered the $2 million buyout fee and agreed to pay Crum about $5 million more to serve as a consultant to the school for the next 15 years.
Former Texas A&M head football coach R.C. Slocum was reassigned last year to serve as special advisor to the school's president.
Rick Minter, who was fired by the University of Cincinnati this week, has been offered a job within the athletic department. Minter, though, has not said whether he will take the job.
"Bill Parcells once told me to remember that I came to a school to coach and do nothing else," former Georgia head football coach Jim Donnan said. "So when they fired me, it was in my contract that I couldn't be reassigned."
Lee Owens, who was fired as head football coach from the University of Akron on Nov. 16, was scheduled to be paid the last two years of his contract -- $240,000 in total -- to be the assistant to the vice president of public affairs and development.
But on Wednesday, Owens took the head coaching job at Division II Ashland, for a reported $80,000 per year, and the University of Akron is now off the hook for the total severance owed to Owens.
"A lot of people start to think about what else you could have done with all that money," said Arizona athletic director Jim Livengood, who gave Mackovic's predecessor Dick Tomey the last payment of his $600,000 buyout in January. "They think it's like getting a speeding ticket and having to pay $150. You just threw $100 and a $50 bill out your window and you got nothing for it."
Over the last decade, Georgia athletic director Vince Dooley has agreed to pay millions of dollars to send coaches on their way.
"In an ideal world, I wouldn't want to do buyouts, but this is part of the competitive world we live in," Dooley said. "These are things we have done in the quest to win football and basketball championships."
Since 1995, three former men's basketball coaches have been paid more than $1 million not to coach -- Hugh Durham ($370,000), Ron Jirsa ($382,000) and Jim Harrick ($256,166). Donnan's predecessor Ray Goff was paid $577,187 upon his early termination.
"I understand fans are sometimes upset when they realize that this money is being given out when the school might have to cut back on professors," said Donnan, who said he turned down more lucrative jobs at North Carolina and North Carolina State while he was still coaching the Bulldogs. "But those people have to look at the money that the football program is bringing to the school."
Financing the settlement
Although contracts by public universities are subject to the approval of a state's Board of Regents, most of the athletic departments paying big buyouts are separately funded and don't use any university funds.
A particular school's boosters might help put pressure on the athletic director to give the coach the boot or offer their private plane for the coaching search, but boosters are usually not paying for the severance package, Livengood said. At Arizona, severance pay money comes out of the athletic department budget, which Livengood says has never lost money since he became athletic director nine years ago.
Coaches' buyouts don't even come close to mirroring the biggest buyouts in corporate America. CEO's and presidents of large companies often get severance packages worth more than $10 million, and New York Stock Exchange chairman Dick Grasso was forced to resign this year, after it was revealed that his severance package would be more than $140 million.
"For the most part, a CEO or president's buyout is in the media once, maybe two times," Livengood said. "A coach's buyout is in the paper over and over again, and that plays a big part."
Although several athletic directors have sought to eliminate pricey severance packages, don't expect those who have taken a stand to become trendsetters.
"The bottom line is, you can't change the pay scale unilaterally," Carr said. "If certain schools just decide that they won't pay this kind of money, it's competitive suicide for the university and political suicide for the university president. College sports is a cartel, everyone benefits from each other's successes."
And if you're a college football coach, there has never been a better time to be fired.
Darren Rovell, who covers sports business for ESPN.com, can be reached at email@example.com.