Report: Schiano can leave without penalty if project not finished

Updated: July 23, 2008, 2:47 PM ET
ESPN.com news desk

A clause in Rutgers football coach Greg Schiano's contract allows him to leave without financial penalty if the university does not complete the 14,000-seat expansion of Rutgers Stadium by 2009, The Star-Ledger of Newark, N.J., reported Wednesday.

The side deal, which university president Richard McCormick disclosed to the newspaper Tuesday night, followed an earlier Star-Ledger report that Rutgers quietly guaranteed Schiano an additional $250,000 on top of his salary. The newspaper reported that payment never appeared on the school payroll because it was funneled through the university's sports marketing firm.

According to the terms of his deal, Schiano is required to pay $500,000 for breaking his 10-year contract if he leaves following the 2009 season. However, an addendum to that contract, which was never made public, releases him from those same damages if the stadium construction is not completed on time, the newspaper reported.

According to the report, McCormick apologized for the university's "lack of transparency" involving Schiano's contract and said Rutgers should have made all of its terms public. He did not say why the university chose not to disclose the entire contract when it was signed.

"I'm not sure why we didn't, but I regret it," McCormick said, according to the newspaper.

Neither Schiano nor university athletic director Robert Mulcahy, who negotiated the deal, responded to requests for comment, The Star-Ledger reported.

Schiano, who helped build Rutgers into an emerging college football power, has reportedly been sought by a number of high-profile programs in the past few years.

Schiano was paid $1.6 million in salary and guaranteed compensation last year, not including the $250,000 payment or bonuses and other incentives that totaled $205,000, according to the report.

Those bonuses included $50,000 for being invited to a bowl game, $100,000 for a record in ticket sales and $25,000 for the team's academic progress rating, the newspaper reported. The university, which sold Schiano a piece of property, also gave him an $800,000 interest-free loan to buy a home, which is being forgiven at a rate of $100,000 a year so long as he remains at Rutgers.

According to records obtained by the newspaper, Rutgers arranged for Nelligan Sports Marketing, the university's exclusive marketing agent, to pay Schiano $250,000 from sponsorship revenue. Those payments went into a limited liability corporation which Schiano established shortly after his contract extension was announced in February 2007.

The company's chief executive, T.J. Nelligan, said payments made through his business are a common practice at top football schools.

"Not one dime has come from the state taxpayers. In fact, due to the increased revenue, Nelligan Sports Marketing has helped generate over $22 million in total sponsorship revenue since 2000-2001," he said, according to the newspaper. "This has significantly helped to pay expenses for the athletic department and thus offset the costs that would have had to be paid by taxpayers."

Rutgers officials say the first phase of the $102 million stadium renovation, which will add about 1,000 "premium" seats, will be completed by the Sept. 1 home opener against Fresno State,. But officials said earlier this month bids on the second phase -- adding another 13,000 seats to the stadium -- came in $18 million higher than anticipated, the newspaper reported.

"It is a commitment to the coach that the two phases of the expansion of the stadium will be completed by the beginning of the 2009 football season; more specifically, that one of them will be completed in 2008 and the other one in 2009," McCormick said, according to the report.

"We wanted to seize the moment, take advantage of the opportunity to expand the stadium," he said, according to the report. " It was all part of a common set of goals that we had."