This was on the front page of the Atlanta Journal Constitution's Sports section in yesterday's Sunday paper. When I read it yesterday, I knew I had to share. If you don't like to read, then go away...it's long so you won't like it. But it's pretty informative and I find it rare when the AJC covers anything Auburn, so take advantage of it, assholes.
Buyouts costing colleges, coaches big bucks
Tuberville would owe Auburn $6 million if he left
By TONY BARNHART
The Atlanta Journal-Constitution
Published on: 02/07/08
When Tommy Tuberville's name was being linked to jobs at Arkansas and Texas A&M last fall, there was one person who absolutely, positively knew that he would not be leaving as Auburn's head football coached.
That was Tommy Tuberville.
"Couldn't leave if I wanted to," Tuberville said. "And I didn't want to."
That's because pages 18 and 19 of the contract Tuberville signed with Auburn in 2005 contained very specific language. If Auburn fired him after the 2007 season, the school owed him $6 million. If Tuberville chose to leave for another job he, or his new employer, would owe Auburn $6 million.
"That's a pretty hard number to ignore," Jimmy Sexton, Tuberville's Memphis based agent, said.
The number did exactly what Auburn hoped it would do. It gave Tuberville financial security he wanted but it also made it difficult, if not impossible, for another school to hire its coach.
"We're no different than a Fortune 500 company," Auburn athletics director Jay Jacobs said. "We have made a substantial investment in the leadership of our football program and coach Tuberville has done an incredible job. But the institution also has an obligation to protect that investment. That's why the buyout is there."
Not so long ago, "buyouts" for coaches worked only one way. If a school fired a coach with years left on a contract, the coach would receive a negotiated settlement. If a coach left for another job, he owed the school nothing.
But as the average salary for big-time coaches creeps towards $2 million per year and as schools invest millions into stadium and other facility improvements in order to stay competitive, losing a proven head coach can be a staggering financial blow. The schools now want some kind of protection in exchange for the financial security they give the coach.
West Virginia thought it had that protection when it fought off Alabama in December of 2006 to retain coach Rich Rodriguez. The new contract that gave Rodriguez a raise and other concessions also called for a $4 million buyout should Rodriguez decide to leave for another job. West Virginia expects that $4 million now that Rodriguez has bolted for Michigan. Rodriguez has claimed he does not owe the full amount. West Virginia has filed a lawsuit and is prepared to take him to court to get the money.
"I'm not sure that it will ever go to trial but if it does, everybody will be watching," said Birmingham agent Russ Campbell, whose clients include Bobby Bowden (Florida State) and Bobby Petrino (Arkansas). "They (West Virginia) are really holding his feet to the fire."
Because the investment in college football is so great, large buyouts for coaches, particularly in the first few years of a new contract, are going to become the norm according to a number of agents, athletics directors, and coaches interviewed by the AJC.
"Coaches now have agents and their compensation packages have not only been elevated, they have become very sophisticated," Terry Don Phillips, the athletics director at Clemson, said. "Institutions have decided that if they are going to compensate coaches at that high a level, then the coach has to be willing to accept the same arrangement on his end in order to balance things out."
When Clemson coach Tommy Bowden signed his seven-year contract in December of 2003 he agreed to a $4 million buyout for the first three years. At the end of last season that buyout had decreased to $2.5 million and Arkansas came calling, looking to replace Houston Nutt. Bowden, who is friends with Arkansas AD Jeff Long, came very close to taking the job but decided to remain at Clemson when Phillips offered a four-year extension through 2014 and a nice raise. Bowden's buyout, however, will return to $4 million when he signs the new contract later this month.
"I think it's fair. I think it's the right thing to do," said Bowden, who is beginning his 10th season as Clemson's head coach. "If you're serious about staying, this is how you can show it."
If Bowden had gone to Arkansas, it would have been with the understanding that over time he would have been compensated for the $2.5 million buyout he would have paid to Clemson.
Other schools cannot afford to be so generous. Georgia Tech's deal with new coach Paul Johnson calls for a payment of "up to $500,000" to Navy as compensation for the loss of Johnson's services. If that figure had been $2.5 million, Johnson might not be the head coach at Georgia Tech today.
"Some times you just can't hire a guy and you have to move on to another candidate," athletics director Dan Radakovich said. "It's just one of the realities of our business."
Johnson's buyout at Georgia Tech is $750,000 in the first year and $500,000 in the second year until the end of the seven-year deal.
Georgia's Mark Richt has made it clear that he wants to spend his entire career as the Bulldogs' head coach. Richt backed up that claim when he signed his eight-year deal in January of 2006. Richt agreed to the most basic — and most expensive — of buyouts. If he is fired, Georgia owes him $2 million for every remaining year on the contract. If he leaves, Richt owes Georgia the same amount.
"That's a dollar for dollar buyout," said Sexton, who represents a number of SEC coaches including Tuberville, Nick Saban (Alabama), Houston Nutt (Ole Miss), Philip Fulmer (Tennessee), and Steve Spurrier (South Carolina). "That's amazing."
Richt, whose team went 11-2 last season, is expected to receive a salary increase later this year.
Not every school is following this trend.
Alabama's Saban has the richest contract in the SEC, one that will average $4 million over eight seasons. But the contract does not include a buyout clause of any kind for the coach. Saban can terminate his deal with Alabama at the end of any season with only five days notice in writing.
"It's called leverage," Campbell said of the deal, which was negotiated by Sexton. "Some coaches have the leverage and do not have to agree to a buyout."
At Florida, Urban Meyer makes more than $3 million per season but the maximum amount he would have to pay the school should he leave would be about $500,000, athletics director Jeremy Foley said.
"Some people put a big number in there to make it hard for a coach to move," Foley said. "But if a coach doesn't want to be at Florida we shouldn't try to keep him here. We just put that figure in the contract because there could be some costs if the head coach leaves and doesn't take his whole staff. If the coach takes all the staff his buyout could go down to zero."
LSU coach Les Miles, whose pay will jump to about $3.5 million this season after winning the BCS national championship, has a $1.25 million buyout in his contract that only applies to one school — Michigan. Various media reports had Miles flirting with his alma mater back in December. If he leaves for any other school there is no buyout, according to assistant athletics director Herb Vincent.
Sexton believes that in this ultra competitive environment, if a school really wants to hire somebody it will find a way, buyout or no buyout.
"I personally don't think any coach should agree to a buyout," Sexton said. "Buyouts might help a school with transition costs and it might make sense in the first two or three years of a new contract. But I think athletics directors are starting to see that buyouts won't work to keep a coach at a school if he really wants to leave."
Ironically, if the coach and the school can't agree the buyout may not be enforceable, at least in Georgia. State law stipulates that such buyout clauses in contracts must reflect a "reasonable pre-estimate" of the probable loss. The clause must also provide for actual damages and not as a penalty against the party who terminates the contract.
"The burden of proof falls on the party who breached the contract," said Steven M. Winter of the Buckhead law firm of Weinstock & Scavo. "And in some cases that can be hard to prove."
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