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| Thursday, November 30 Coaches are key to football and fiscal success By Darren Rovell ESPN.com |
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When Tommy Bowden walked into the office of Clemson athletics director Bobby Robinson two years ago, the prospective coach from Tulane brought someone with him -- his agent. Although Robinson wasn't surprised, he admittedly had little experience in agent dealings. "Five years ago, I had never dealt with an agent," said Robinson, who has been the athletic director the school for the past 15 years. "Now coaches have to get all that legal stuff out of the way."
Then come the typical perks -- a healthy housing and car allowance and a good retirement program. Finally, the buzzword of the free agent coaching market comes into play -- the buyout, or in simple terms, the cost to move or be removed. It's ironic that negotiating the settlement for breaking a contract is one of the most talked about elements of a new deal. The origin of the buyout clause can be traced back to Warren Powers, who became Washington State's third coach in as many years in 1977 and, after leaving following the season, was successfully sued by the school for a reported $55,000. To protect schools from coaches who leave early and eventually to protect the coach from contract termination, the buyout gradually made its way into contracts. The prices have come a long way since Powers' day, though. If a coach leaves a university on his own, he must pay a buyout price -- which for elite programs is usually in the $750,000 range. However, sometimes coaches have a list of schools that have no buyout or smaller buyouts, just like some schools can have a higher buyout. And while the new school -- perhaps with some help from boosters -- almost always picks up the tab, a hefty buyout clause could scare some people away. "If the amount is high enough, it is definitely a deterrent," said Eric Hyman, TCU's athletics director. "When you sit down with your coach, you have to get it to the point where it is a win-win situation for the coach as well as the university. There are good buyouts that exist that tell your constituency in black and white that there is a commitment there." Hyman obviously negotiated the buyout in Dennis Franchione's latest contract, which extends through the 2005 season. The contract has four schools that have a lower buyout than the others: Notre Dame, Texas, Texas A&M and Arizona State. For others, the buyout could reportedly be as much as $1 million -- which would be among the highest in college football.
But with Alabama now reportedly offering Franchione the job despite the possibility of a huge buyout, some of the big programs might see the settlement as a necessary expenditure. "Alabama has been running profits from its football program at around $10 to $15 million per year," said Richard Sheehan, a Notre Dame business economist. "If they slide to $5 to $10 million -- that's a big budget hit to the university. With a potential multimillion dollar loss in revenue, buying out a coach's contract can be viewed as a good investment." And it shows the program is serious about getting better -- fast. "If a program is going through some turmoil and need something to bail them out, they might be willing to assume the baggage financial or otherwise because they are in dire straits to make a statement," said David Carter, professor of sports business at USC. Another statement made in the negotiations is the length of the contract. Yes, both parties hope the contract will go the distance, but much of it is essentially "window dressing" for recruiting purposes. "During the last decade, coaching contracts have typically been for at least five years to ensure that the coaches, sitting on America's couches, can in good faith say to a recruit 'We're in this together' and say that with a straight face," Carter said. Great recruiting is usually the foundation of a great program and coaches and athletics directors know that. By the start of the 2001 football season, it is likely that 20 to 25 football coaches will be making over $1 million a year in total pay. But with coaches getting paid three times as much as the school president and ten times as much as a highly paid faculty member, is hiring a new coach at that price fiscally responsible? Clemson's Robinson thinks so. He said that before a price was settled upon with Bowden, school officials discussed what the return on their investment would be. "In our case it was pretty easy to quantify (the potential return on investment)," said Robinson, who before the season rewarded Bowden with a five-year extension worth $825,000 a year. "We did a graph and found that if we did well in athletics, interest in applications go up and so does the athletics fund and general fund." As long as the big bowl picture remains healthy and the payouts are on the rise, it appears as though the majority of programs will continue to dish out the dough for the chance to land the right coach. "If you had a coach that could guarantee a national championship, how much would Nebraska or Ohio State or Alabama be willing to pay?" Sheehan asked. "You are going to get a bloody big number there and until college coaches start catching up with that number, then we will continue to have their salaries escalate." And that means those athletic directors better get used to seeing agents walk through their doors. Darren Rovell covers sports business for ESPN.com and can be reached at Darren. Rovell@espn.com. |
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