Buy out clauses: article in today's Demozette

[HognotinMemphis]

Good editorial in today's Demozette on Bret's buyout and the confusion surrounding it. The editorial plainly says that football coach pay packages are too high with emphasis on the buyout part. Losing games excessively should be a "for cause" event that does not cause the buyout to kick in. Put it in the contract if need be: You lose "x" percent of your conference games and you can be fired with cause. Think a coach like Morris moving up in the coaching ranks would not sign it?

Where would Morris have gone if Arkansas has agreed to everything in the contract that is paying him at least $3.5 million for 6 years except for the buyout language? I mean no buyout at all. He would be free to leave for another job at any time without having to pay Ark anything but he could be fired at any time and would get nothing in the way of a buyout. Would Morris have stayed at SMU if no buyout? I doubt it. A chance to almost double his annual income. A chance to move from the AAC to the SEC. He was not going anywhere else so it was stay at SMU or come to Arkansas and have no buyout clause. He would have signed it. So much money at college football in the SEC that $15 million for a buyout is same as monopoly money...not real. 

[HogBreath]

Yep, doing your job very poorly does seem like a "for cause" termination.

[grayhawg]

Yep, doing your job very poorly does seem like a "for cause" termination.

In most jobs it is.

[Vantage 8 dude]

In most jobs it is.

You're totally correct. However, we all have to take into account that far too often in the "la-la land" that is D1 college football failure has its own rewards. Then again, we also see it often times in corporate America when "suits" at the top are thrown out on other rears for helping run a company into the ground. Witness someone like Jeff Immelt at GE who was "canned" earlier this year with only a $21.3 million severance package. Gosh, hope the poor guy can survive. Then again, perhaps he and Bret can grab a beer together and swap stories of how tough things are all over. 

[jcbville]

The problem you have with trying to change it now is the agents specifically negotiate buyouts that exclude losing from the list of "for cause" offenses. With the reason being to protect the coach from crazy and fickle fans, boosters, and ADs who get nervous and pull the trigger and fire a coach due to crazy fans and boosters.

[The NewEra]

Barry Alvarez had it right.  When the AD's become smarter than the agents then this will change.

[Tusks]

Barry Alvarez had it right.  When the AD's become smarter than the agents then this will change.

As long as the AD's keep coming from academia that will never happen.

[opineonswine]

Coaching salaries are out of control.  They are ridiculous.

Having said that, when executives (head coaches) in large businesses (P5 Conference schools) are relieved of their jobs, 99% of the time (unless they did something illegal) they are paid large severances to leave quietly.  It really is very similar.

It's just the price you pay to be competitive in the market.

And, there is another side to the argument.  Coaching at this level, (similar to Fortune 500 companies) is a high stress, high risk profession.  Supply, demand and the marketplace determines compensation levels.  (and of course negotiation skills on both sides plays into the details of the agreement/contract).

I don't see it changing dramatically in college sports or in the business world.

[hogsanity]

Problem with this is are you going to put specific win/loss numbers in the contract? The coach has to know what is acceptable or not, just like with bonus clauses. With bonus clauses it is clear cut what the coach must do to receive the bonus. If you want to make too many losses a for cause event, the contract is going to have to be pretty specific, not just some broad statement, otherwise schools could use any # of losses as for cause and no coach is going to sign up for that.

[k.c.hawg]

Coaching salaries are out of control.  They are ridiculous.

Having said that, when executives (head coaches) in large businesses (P5 Conference schools) are relieved of their jobs, 99% of the time (unless they did something illegal) they are paid large severances to leave quietly.  It really is very similar.

It's just the price you pay to be competitive in the market.

And, there is another side to the argument.  Coaching at this level, (similar to Fortune 500 companies) is a high stress, high risk profession.  Supply, demand and the marketplace determines compensation levels.  (and of course negotiation skills on both sides plays into the details of the agreement/contract).

I don't see it changing dramatically in college sports or in the business world.

A few salaries can be justified. Nick Saban is underpaid. Where he has put the Alabama football program and the national exposure it has gotten for that University over the course of his tenure would easily be worth $15-$20 million per year. It is coaches making 70% of Saban pay, for continual mediocrity that have blown the pay structure up. Especially when the get fired and then land another job. Charlie Weis made $24.6 million for not coaching and was still drawing Notre Dame pay after being fired by Kansas with another buyout!!

[Redhogs]

In most jobs it is.

Except a coach or weatherman..apparently. 

[MuskogeeHogFan]

Good editorial in today's Demozette on Bret's buyout and the confusion surrounding it. The editorial plainly says that football coach pay packages are too high with emphasis on the buyout part. Losing games excessively should be a "for cause" event that does not cause the buyout to kick in. Put it in the contract if need be: You lose "x" percent of your conference games and you can be fired with cause. Think a coach like Morris moving up in the coaching ranks would not sign it?

Where would Morris have gone if Arkansas has agreed to everything in the contract that is paying him at least $3.5 million for 6 years except for the buyout language? I mean no buyout at all. He would be free to leave for another job at any time without having to pay Ark anything but he could be fired at any time and would get nothing in the way of a buyout. Would Morris have stayed at SMU if no buyout? I doubt it. A chance to almost double his annual income. A chance to move from the AAC to the SEC. He was not going anywhere else so it was stay at SMU or come to Arkansas and have no buyout clause. He would have signed it. So much money at college football in the SEC that $15 million for a buyout is same as monopoly money...not real. 

I would agree that dismissal for non-performance should be spelled out in a contract with a HC. But for that to be a factor the contract needs to specifically state what those expectations involve. For instance, in a situation where truly big money is being paid (say top 25 money in P-5 as an example) failure to achieve at least a .500 win percentage in conference games in any 2 out of 3 year period after the initial 2 year period of time of a contract "is" grounds for dismissal for non performance and in such cases, any buy-out provision of said Head Coach in cases of termination for non performance, would cease to be in effect. The expectations would have to be clearly defined if you wanted to use this as a termination "for cause".

The thing is, all schools would need to agree to word contracts in this way or else HC's might balk at agreeing to such provisions. If they don't have to, they won't because it puts them at a distinct disadvantage and really puts the onus on the coach to perform.

Of course you could also include provisions for a significantly reduced buy out in these cases, which would be another way around having to pay huge money to rid yourself of a non performer and perhaps might still be more agreeable to a potential new HC.

[12247]

I believe there are ways to couch a contract whereby it is fair to the coach and still gets the University a fair deal.  Set reasonable winning expectations in black and white.  If the coach feels he cannot do that, then don't hire him.  Once some school stops the stupid handouts, others will follow.  Because of a bad decision by the AD, we got clocked by Bret.  And Bret, the good fellow, will not hand back anything toward being fair and just.  Just watch.  All that teaching Kids to be good citizens was just talk.

[MuskogeeHogFan]

I believe there are ways to couch a contract whereby it is fair to the coach and still gets the University a fair deal.  Set reasonable winning expectations in black and white.  If the coach feels he cannot do that, then don't hire him.  Once some school stops the stupid handouts, others will follow.  Because of a bad decision by the AD, we got clocked by Bret.  And Bret, the good fellow, will not hand back anything toward being fair and just.  Just watch.  All that teaching Kids to be good citizens was just talk.

Your first four sentences made up a really good post. Then you couldn't leave it there, you just had to go personal vs. Bielema. That really detracts from the quality of the first part of your post. The man is gone and we have a new HC, the time for being petty is over. Let it go. And not just you, but anyone who feels that they just have to continue to take shots at Bielema. Nothing is accomplished by this.

[hawgon]

I would give someone a $10 million buyout and reduce it by a million dollars a loss based on a 12 game season.  Thus if you went 11-1 and got fired, you get $9 million.  At 4-7 like we went this year, he would have gotten $3 million.  That is a nice chunk of change that would give anyone a little security for a few years, but it wouldn't financially cripple the program.  On the other hand it would be plenty high enough if a coach got unjustly fired after winning eight or nine games.

[Stu]

I would give someone a $10 million buyout and reduce it by a million dollars a loss based on a 12 game season.  Thus if you went 11-1 and got fired, you get $9 million.  At 4-7 like we went this year, he would have gotten $3 million.  That is a nice chunk of change that would give anyone a little security for a few years, but it wouldn't financially cripple the program.  On the other hand it would be plenty high enough if a coach got unjustly fired after winning eight or nine games.

I actually like this idea.  Not sure what all the ramifications of putting this into practice is (i.e. what unintended consequences might happen if this was in place?)

[WJBilly]

I would give someone a $10 million buyout and reduce it by a million dollars a loss based on a 12 game season.  Thus if you went 11-1 and got fired, you get $9 million.  At 4-7 like we went this year, he would have gotten $3 million.  That is a nice chunk of change that would give anyone a little security for a few years, but it wouldn't financially cripple the program.  On the other hand it would be plenty high enough if a coach got unjustly fired after winning eight or nine games.

OR it could be made progressive, full 10 for nine wins, 9 for 8 wins, 7 for 7 wins, 4 for 6 and a losing record you get nothing.

[Karma]

I believe there are ways to couch a contract whereby it is fair to the coach and still gets the University a fair deal.  Set reasonable winning expectations in black and white.  If the coach feels he cannot do that, then don't hire him.  Once some school stops the stupid handouts, others will follow.  Because of a bad decision by the AD, we got clocked by Bret.  And Bret, the good fellow, will not hand back anything toward being fair and just.  Just watch.  All that teaching Kids to be good citizens was just talk.

Contracts are contracts. It's not wrong to enforce your contractual rights.

[ricepig]

Contracts are contracts. It's not wrong to enforce your contractual rights.

Two parties entered into an agreement, seems simple enough.

[Hawgzinbowlz]

Two parties entered into an agreement, seems simple enough.

It's too complicated for some...Pay the man so he will get on down the road.

" GO HOGS "

[twistitup]

We could have kept JLS, been in the same football situation and saved tons of money....sad but true. Hope things work out better w this hire.

[Flrazrback]

Agreed.. pay the man and lets learn from the experience.

[NuttinItUp]

I would give someone a $10 million buyout and reduce it by a million dollars a loss based on a 12 game season.  Thus if you went 11-1 and got fired, you get $9 million.  At 4-7 like we went this year, he would have gotten $3 million.  That is a nice chunk of change that would give anyone a little security for a few years, but it wouldn't financially cripple the program.  On the other hand it would be plenty high enough if a coach got unjustly fired after winning eight or nine games.

Good luck getting a decent coach with those terms. Most coaches know you will have an occasional off year every now and then. Especially if you are coming into a rebuilding situation.

[hawgon]

Good luck getting a decent coach with those terms. Most coaches know you will have an occasional off year every now and then. Especially if you are coming into a rebuilding situation.

I forgot to add that for the first three years, it is $10 million with no reductions.  That gives a coach time to get established before it is tied to wins.

If a coach is scared of that sort of arrangement, he isn't the guy you want anyway.

[NuttinItUp]

I forgot to add that for the first three years, it is $10 million with no reductions.  That gives a coach time to get established before it is tied to wins.

If a coach is scared of that sort of arrangement, he isn't the guy you want anyway.

Makes more sense, but it would lead to coaches jumping ship after 3-4 years for another guaranteed contract.  (not that they do not do that already)

[hawgon]

Makes more sense, but it would lead to coaches jumping ship after 3-4 years for another guaranteed contract.  (not that they do not do that already)

After three or four years, you'll likely know if you want to keep them or not.

[Phil D]

Your first four sentences made up a really good post. Then you couldn't leave it there, you just had to go personal vs. Bielema. That really detracts from the quality of the first part of your post. The man is gone and we have a new HC, the time for being petty is over. Let it go. And not just you, but anyone who feels that they just have to continue to take shots at Bielema. Nothing is accomplished by this.

Beat me to it Muskogee!

[NuttinItUp]

After three or four years, you'll likely know if you want to keep them or not.

So, useless to put that in the contract in other words?

[RebHog]

Barry Alvarez had it right.  When the AD's become smarter than the agents then this will change.

Unless the NCAA creates a cap rule or something to this nature of performance based contract rule it doesn't matter how smart the AD is. This is a cutthroat business with a lot of money involved. No AD can put performance based incentives in a coaching contract of a coach who is drawing multiple interest cause the next AD in the mix will offer the same without. You can call them dumb but most are very smart think of it like piranhas in a tank with only so much bait to go around.

[TexArkHogFan]

Agents are usually the culprits in all of this.  Simple solution is to outlaw agents from representing coaches.  Agents do nothing to enhance the sport, the only thing they enhance is their own fat pocketbook.  They are responsible for these overblown salaries for coaches and athletes.  Professional sports is in decline, especially football, all caused by greed and it starts with the agents.

[southeasthog]

  All that teaching Kids to be good citizens was just talk.

What we need to do is find out how Beliema was able to talk the Fayetteville PD and the Washington County Sheriffs office from arresting guys on the football team since so many of you say they get their jollies from arresting athletes.

How many guys were arrested while he was here again?

Not very danged many.

[hogsanity]

Agents are usually the culprits in all of this.  Simple solution is to outlaw agents from representing coaches.  Agents do nothing to enhance the sport, the only thing they enhance is their own fat pocketbook.  They are responsible for these overblown salaries for coaches and athletes.  Professional sports is in decline, especially football, all caused by greed and it starts with the agents.

No one has ever held a gun to the head of an AD and made them sign any of these contracts. The agents only get their clients what the schools are willing to give them.

[Wild Bill Hog]

What we need to do is find out how Beliema was able to talk the Fayetteville PD and the Washington County Sheriffs office from arresting guys on the football team since so many of you say they get their jollies from arresting athletes.

How many guys were arrested while he was here again?

Not very danged many.

They knew they couldn't out run the cops.

[12247]

One thing I believe needs to be in every contract.  The exact same amount that the University must pay in buyout should also be accessed the coach if he decides to leave, quitting on the contract.

Another thing a coach needs to worry about and should be addressed is the fact the University has ways to affect the wins and losses.  For example, we don't like the Guy and wan't him gone but he is performing too well.  So they schedule difficult OOC teams and cause losses. 
They limit what can be paid to assistants to a point the HC cannot get the better assistants.  They can limit the recruiting budget or raise the academic requirements.

[oldhawg]

Two parties entered into an agreement, seems simple enough.

Yes, but what is the oversight for contracts for college football coaches? (I am asking, I really do not know for sure).  Other than the AD, who has to approve the contract?  The BOT?  The Razorback Foundation?  If so, there should be enough intelligence there to negotiate and approve a contract with reasonable buyout clauses for both parties involved.  Based upon his performance, not sure how Bielema's buyout got so high, just seems like someone dropped the ball.  Not discussing the legality or morality of the contract, just the mechanics and practicality of allowing a buyout to get so high for a mediocre coach.  Collusion between coach and AD?  Friends on the BOT?  Or just business as usual for D-1 athletic departments?   

[ricepig]

Yes, but what is the oversight for contracts for college football coaches? (I am asking, I really do not know for sure).  Other than the AD, who has to approve the contract?  The BOT?  The Razorback Foundation?  If so, there should be enough intelligence there to negotiate and approve a contract with reasonable buyout clauses for both parties involved.  Based upon his performance, not sure how Bielema's buyout got so high, just seems like someone dropped the ball.  Not discussing the legality or morality of the contract, just the mechanics and practicality of allowing a buyout to get so high for a mediocre coach.  Collusion between coach and AD?  Friends on the BOT?  Or just business as usual for D-1 athletic departments?   

The contract with the University with Bielema was signed by Bielema, Long, Gearhart, and Bobbitt on behalf of the BOT. It appears Rochell and Bielema signed the personal services contract with the RF. As to the negotiations, you would assume his agent, and Long/legal counsel for the University.  Was the buyout too high, yep, but Morris' is about the same, maybe a little higher than Bielema's original contract.

[SquidBilly]

Coaches are quickly becoming like prostitutes.  You pay them to leave.