Former Colorado State athletic director Jack Graham was fed up with the Rams’ reputation as a “stepping-stone program” in December 2011, so when entering contract negotiations with newly hired head football coach Jim McElwain, Graham hatched an idea to fix it.
The proposal: If McElwain wanted out of his 5-year contract before it expired, he would owe the university $7.5 million to be paid in full within 30 days.
“I felt like that was a significant enough deterrent that it would take him off the marketplace,” Graham said.
Oh, how things have changed.
If college football fans learned anything this season, it’s that no dollar amount is too high when breaking a head coach’s contract; even if the financial penalty rests on the shoulders of the university that initiates the split. A collection of seven big-name head coaches dismissed in recent weeks — Nebraska’s Mike Riley, Arizona State’s Todd Graham, UCLA’s Jim Mora, Texas A&M’s Kevin Sumlin, Tennessee’s Butch Jones, Arkansas’ Bret Bielema and McElwain at Florida — are reportedly owed a combined $69.1 million for the early termination of their contracts.
That’s an average of nearly $10 million per coach to simply go away.
“We ought to be able to find a better system,” said Martin Greenberg, a Wisconsin-based attorney who has specialized in college coaching contract formation and termination for more than 25 years.
In the case of McElwain’s contract at CSU, a last-minute amendment signed by university president Tony Frank allowed McElwain to reduce the buyout by $500,000 and eliminate the 30-day repayment period when he bolted for Florida in 2014. Today, McElwain and Florida still owe CSU a combined $3,000,001.
However, buyout figures have soared nationally since then. In 2013, Texas A&M and Kevin Sumlin agreed to a fully guaranteed six-year, $30 million contract extension that included a $10 million buyout to be paid within 60 days if the Aggies terminated his contract without cause before its completion. That didn’t stop A&M from giving Sumlin the axe last week when the Aggies finished 7-5.
“The thing to be learned for sure is that in college, a contract is really not a contract,” Greenberg said. “If you think there’s a five-year contract, you’re wrong. If you read that contract closely, the coach and the university have a way to cut that contract short of its full term as listed.”
That wasn’t always the case. Before the financial boom of television rights infiltrated college sports, coaches and universities were apt to stick it out through difficult times. Joe Paterno coached 46 seasons at Penn State, Bobby Bowden lasted 34 years at Florida State, Frank Beamer accrued 28 seasons at Virginia Tech, and the list goes on.
But the influx of money has since allowed impatience to be rewarded, where powerhouse programs have revenues nearing $200 million dollars a year.
“It’s sort of a two-way street,” Greenberg said. “If the coach isn’t performing up to expectations, it may be cheaper from the standpoint of overall revenues to basically take the chance of getting rid of him at whatever cost to bring in something new and exciting.
“It’s a circle of money that’s finding its way into college coaches and it’s not being utilized for how it should be utilized, and that is for educational purposes.”
So how might this trend impact the futures of CU’s Mike MacIntyre and CSU’s Mike Bobo? While it is currently expected both will return for next season, all parties involved are subject to serious financial penalty should the university fire without cause or if the respective coach is hired elsewhere.
Per the terms of MacIntyre’s 5-year/$16.25 million extension signed last summer, his buyout is reduced in each of the next several years — 2017: $13.15 million, 2018: $9.975 million, 2019: $6.725 million, and after 2020: $3.4 million.
In December 2014, Bobo agreed to a 5-year/$7.75 million contract that also included a staggered buyout — 2017: $3 million, 2018: $1.5 million, and 2019: $1.75 million (prorated from termination date to contract end date).
However, those figures pale in comparison to the biggest names in college football. In 2017, according to USA Today, nine coaches had buyouts that exceeded $20 million: Texas’ Tom Herman ($20.4 million), Michigan’s Jim Harbaugh ($20.5), Ohio State’s Urban Meyer ($21.3), Penn State’s James Franklin ($21.8), Iowa’s Kirk Ferentz ($22.5), Alabama’s Nick Saban ($26.9), Washington’s Chris Petersen ($30.6), Florida State’s Jimbo Fisher ($39.1) and Clemson’s Dabo Swinney ($40).
“When you look at these contracts, it’s not so much important for how guys get paid, it’s how well he’s protected backing out,” Greenberg said. “The termination provisions of the contract can be more significant than the amount that he’s making.”
It’s impossible to guess when or if Bobo, MacIntyre, or their respective schools will be forced address these buyout terms, but one thing remains clear. The college football world has certainly embraced a motto branded by legendary rap group Wu Tang Clan in the 1990s: C.R.E.A.M.
Cash Rules Everything Around Me.
Paid to go away
A breakdown of high-dollar buyouts owed to college football coaches who were recently fired, per media reports
School, Coach Buyout
Arizona State, Todd Graham: $12.3 million
UCLA, Jim Mora: $12.2 million
Arkansas, Bret Bielema: $11.8 million
Texas A&M, Kevin Sumlin: $10.4 million
Tennessee, Butch Jones: $8.3 million
Florida, Jim McElwain: $7.5 million
Nebraska, Mike Riley: $6.6 million
