During Steve Spurrier’s first interview for a college football head coaching job, there were no lawyers or agents or advisors in the room. It was just Spurrier and Duke athletic director Tom Butters having a pleasant, one-on-one conversation.
The subject of money never came up.
“(Butters) said, ‘We want to hire you. Go back and talk to your wife Jerri,’ ” Spurrier said. “He called me back and I said, ‘I’m ready to come.’ So we had the press conference the next day. After the press conference, he said, ‘Come by tomorrow morning and I’ll tell you what you’re making and all your assistant coaches are making.’ I said, ‘OK.’ ”
Just like that, Spurrier took the job not knowing how long it would be for or how much he’d be making.
“I had no idea,” he said. “I walked in and he said, ‘The last coach here made $74,500. I’m going to bump you all the way up to $75,000 even.’ So I got $500 more than Steve Sloan. That was it. It was a one-year deal.”
That was back in 1987, 31 years ago. But it might as well be 100 years ago now, given how much has changed with the business end of college football since then.
We are now in the era of the mega, multi-year, multi-million dollar coaches’ contracts, where agents are involved and the money figures soar every year. And with the big contracts have come big buyouts that either go to the coach or the school if the contract is ended prematurely by one of the parties.
Following a 2017 season that saw 14 FBS coaches fired or forced out, schools are on the hook for almost $70 million in combined buyouts to coaches. The University of Florida is in for a $7.5 million chunk for parting ways with Jim McElwain.
The buyouts have become the next big thing in college football.
In negotiations between agents and athletic directors, the buyout clauses are now more difficult to settle on than the actual salary, says Martin Greenberg, a Wisconsin-based attorney who has specialized in college coaches’ contract formation and termination for more than 25 years.
“The truth to the matter now it’s not what the package number is, it’s the buyout number that is really important,” Greenberg said. “That’s where most of negotiations are going these days. You can pretty much determine the market rate for what a package is for a coach, based on the conference he plays in and the competition. It’s these backend deals, the exits, that have become the biggest negotiation points in college athletes.”
This is a fairly new trend.
Back in the day, Spurrier did not have a buyout clause in a new Duke contract he’d signed after the 1988 season. When Florida, his alma mater, came calling at the end of the 1989 season, he still had two years remaining on his contract, but there was no doubt he was leaving.
And Butters wasn’t about to try and stop him. Instead, he shook Spurrier’s hand and wished him good luck.
It doesn’t happen that way today.
Now, when a coach leaves for another school before his contract is up or he is fired without cause, money is going to flow to either to the coach or to the school.
Sometimes very big money — like the $10.4 million Texas A&M owed Kevin Sumlin for firing him without cause after last season.
Sometimes ridiculous money — like the $35 million Clemson would owe Dabo Swinney if the school did the same to him this year.
And sometimes it flows in the opposite direction — like the $8 million Jimbo Fisher had to pay Florida State in December for breaking his long-term contract to sign a guaranteed 10-year, $75 million contract with Texas A&M.
What it all means is that in college football, there is no sure thing when it comes to these lucrative, long-term contracts. Because either side — the school or the coach — can end it at any time if they are willing to pay the price, often a heavy one.
“We’re fooling the public (with these long-term contracts),” Greenberg said. “What we should really be saying is this is a contract where there’s no real reason anybody has to stay because both sides have the right to walk away from a committed term. All it takes is money. We know that recipient universities participate in the payment of basically the coach that we ultimately want. It’s like a revolving money circle.”
(The buyouts have also grown big in college basketball. Duke’s Mike Krzyzewski has a $30-million buyout if he is fired without cause, while Kentucky coach John Calipari’s buyout is $19,570,000. At UF, Mike White’s is $8,822,917.)
The buyouts are critical for both sides.
In this era where ADs seem quicker and quicker to pull the plug on a coach when things aren’t going well on the field, the coaches are looking for some sort of financial security if they are fired without cause.
At the same time, the ADs are looking to hold onto successful coaches by making them pay if they choose to leave for another school before their contract ends.
“The buyout is one element of any agreement,” said former Florida football star and Gainesville-based agent Trace Armstrong, who represents several prominent college coaches, including Urban Meyer, Kevin Sumlin and Tom Herman. “There are multiple elements to them. You try to get something that’s balanced and works for both parties.”
There are two buyouts in every contract: one that goes to the coach if he’s fired without cause, the other to the school if the coach leaves for another school while he’s still under contract.
“I think with schools, as they look at a coach that maybe is not succeeding, there is the thought of, ‘What will it cost me to fire him?’ And that’s where those guarantees come in,” Armstrong said. “And there’s the other cost, what it costs the program (if a struggling coach is kept). Fan support and attendance and sponsorship sales, etc. A lot of times, they will look at coaches like this and just make a business decision (to fire them).”
Schools can fire coaches at any time without cause.
According to the Marquette Sports Law Review, termination without cause “usually involves a failure to win games, lagging tickets sales, dwindling attendance, unhappiness among boosters, loss of interest in the program, changes in atmosphere.”
Coaches fired with cause typically do not get a buyout.
“For cause, it implies some type of wrongdoing: moral turpitude, violation of NCAA, conference or university rules,” Armstrong said. “Losing games is not (considered a cause).”
That’s why coaches and agents try to negotiate significant buyouts. It provides some financial backup should a coach get fired for not winning enough.
When Texas fired Charlie Strong after the 2016 season, he gained some financial security in the form of a $10 million buyout to be paid in two installments over two years. But he said money is not what’s on a coach’s mind after he’s fired.
“You wonder if you’re ever going to coach again,” he said. “You still want to coach. It’s that more than anything else.”
Strong was not unemployed long. Two weeks after he was fired, he was hired as South Florida’s head coach.
Some of the buyouts appear outrageous — like the $40 million Clemson put on the first year of Dabo Swinney’s new contract last August. Armstrong said those big numbers can be deceiving because buyouts decrease over the course of the contract as the contract’s overall value becomes less.
“You say 40 million. But that’s someone that’s literally just signed a contract,” Armstrong said. “When you start looking at it from a practical standpoint, it’s really what happens after year two or year three in the agreement. That number is probably in reality, not quite as high. Most of these deals, many of them include offset litigation for a school has the opportunity to recoup some of its other losses.”
Texas got slight relief in the Strong buyout. The school had a 50-percent offset in Strong’s buyout if he landed another job. His first-year salary at USF was for $1 million, which means the buyout was reduced by only $500,000 for each of the two yearly installments.
As for coaches seeking financial security, Florida athletic director Scott Stricklin suggests they should start by looking in the mirror instead of at their buyout in their contract.
“From the school’s perspective, the guaranteed money for a coach who is not successful, that’s the one I wish we would all be smarter about,” Stricklin said. “You’re in effect, paying someone for failing. An agent or a coach will come back and say, ‘Well this person needs security.’
“Security is be successful and do your job well. That’s the only security any of us in life have. If you do well, and if you’re productive, then you have security. And if you don’t, you’re probably not going to have security.”
Boosters rarely contribute to a school’s buyout to a coach, but some of the cost can be passed on indirectly to the fans in terms of increased booster fees and raised ticket prices.
“In some ways, the fans would probably do their school more of a service if they just said, ‘We’re going to trust whoever you get, and go get the best guy and save us as much money as possible in the meantime,’ ” Stricklin said. “Because the fans end up paying for it in terms of tickets and donations.”
The way things are now, big money is changing hands with almost every coaching change.
The McElwain drain
The University of Florida could be a case study for the high cost of hiring and firing football coaches. And how quickly it can snowball.
The Gators have fired three of their last four coaches without cause — Ron Zook, Will Muschamp and McElwain — at a combined buyout cost of $15,150,000.
The biggest financial drain occurred over a three-year period and involved only one coach.
To hire him away from Colorado State, Florida’s University Athletic Association had to deal with his $7 million buyout. After three days of negotiations, UAA agreed to pay CSU $3 million over six years and agreed to play the Rams in The Swamp (that game will be played this season), with UAA paying CSU $2 millon for the game, which is about $1 million more than the usual rate for guaranteed games. McElwain owed $3 million out of his own pocket.
To part ways with him last November, UAA agreed to a $7.5 million settlement with McElwain that will be paid to him over the next four years. It could have been worse. McElwain’s buyout was for $12.9 million, but it was negotiated down after both parties agreed to go their separate ways.
If you add up McElwain’s buyout, settlement and salary, the total is $22,350,000 for less than three years of employment. That comes out to $1,015,909 per win.
UAA has already paid McElwain two installments on the $7.5 million settlement: $3.75 million on Dec. 1 and $250,000 on Feb. 15. The next payment, $1 million, is due July 1.
School officials told The Sun that the athletic department’s outstanding buyout balance is currently at $12,247,557 for McElwain, assistant coaches and staff members.
“Florida is a good example (of what can happen), because they seem to be making mistake after mistake and it’s costing a lot of money,” Greenberg said. “But don’t believe for one second that Florida is the only one that is on the hook. There’s a replete list of universities that have suffered these consequences. Florida is just interesting because they seem to do it time after time.”
Former UF athletic director Jeremy Foley hired Zook, Muschamp and McElwain and fired the first two.
“These buyout numbers are consistent with what you see across the landscape of college football,” Foley wrote in an email to The Sun.
Stricklin is hoping UF’s recent trend will change with the hiring of Dan Mullen. Stricklin not only knows and trusts Mullen from their days working together at Mississippi State, but Mullen is a proven winner in the SEC who has shown he has staying power based on his nine seasons in Starkville.
Mullen’s MSU buyout was only $500,000. His buyout at UF is $12 million, so UF would be on the hook again if he does not work out. If he leaves for another school before the end of his contract, his buyout to UF is $2 million.
In the meantime, for the next four years, UF will be paying two coaches — Mullen and McElwain. The athletic department also still owes Muschamp $792,000 that is due in November.
“I’ve been asked the question, ‘how do you prevent getting in this situation?,’” Stricklin said. “You prevent getting in this situation by hiring successful coaches you don’t have to start paying buyouts to. Making bad coaching decisions end up being very costly.
“I’m looking forward to the day that we’re not paying off anybody and we’re able to take the money that we were paying to buyout coaches and reinvest it in things that benefit our athletes and our fans.”
That day isn’t here yet.
Don’t poach my coach
Back in 2012, when then Colorado State athletic director Jack Graham hired McElwain, he came up with a plan that he hoped would help keep his new coach on board for at least five years.
During negotiations, McElwain agreed to a $7-million buyout if he left before the end of his five-year contract. The entire sum would be due within 30 days.
“I felt like that was a significant enough deterrent that it would take him off the marketplace,” Graham said.
Unfortunately for the Rams (and, perhaps the Gators), the hefty buyout did not deter Florida from swooping in.
But a similar big buyout may have worked at Iowa State last season.
With all those coaching jobs coming open late last season, the name that kept popping up as a possible leading candidate was the Cyclones’ Matt Campbell, a young up-and-comer who many have predicted could be the next Urban Meyer in college football.
But Iowa State athletic director Jamie Pollard did not receive a single phone call from other ADs expressing an interest in talking to Campbell.
Was his big buyout — $9 million — the reason?
“Perhaps,” Pollard said. “But I also know that, as we always say in the industry, when someone contacts you it’s over. It’s too late. When they’re contacting you it usually means it’s over. You really don’t want anyone to contact you. That’s usually just the end, not the beginning.”
Usually when the call doesn’t come, it’s because the coach has told his agent he’s not interested in leaving for another school.
Campbell and Pollard had been talking about a new contract throughout the season, and it was negotiated in late November — six years for $22.5 million with a $7-million buyout.
“I knew he had things he wanted to accomplish here,” Pollard said. “How it all played out, it was neat in this day and age where not a lot of people actually do what they say they’re going to do. He said he was going to stay. He said, ‘Don’t worry about it, I’m not leaving, so don’t worry about it at all.’ I really wasn’t, but he reinforced that for me at the end of the year by not having done anything.”
Shortness of the long-term deal?
Clemson made headlines and sent a clear, strong message to its coach and the school’s fan base when it announced last August that it had rewarded Swinney, who led the Tigers to a national championship seven months earlier, with a new eight-year, $54-million contract that included the $40-million buyout, the biggest in college football.
That contract, and that buyout, shows Clemson’s commitment and faith in their coach.
Commitment to him. Faith that he will remain at the school long term.
“Absolutely,” Clemson athletic director Dan Radakovich said. “It’s our commitment to him. To his family. To our football program. We’re in this for the long haul, and we want him to lead our program for a long time.”
The big contract and buyout certainly have given Clemson and its fans a secure feeling about their coach staying. That, of course, could change at any time.
Swinney played football at Alabama and Nick Saban isn’t going to coach forever. If the job comes open, speculation is the Tide will target Swinney. If that happens, he’ll be free to leave if he chooses, at a price.
His buyout to the school if he leaves in 2018 is $6 million. It drops to $4 million in 2019. His buyout if he is fired without cause lessens by $5 million each season.
The potential Tide threat is a bit unnerving for the Tigers, but Radakovich said he thinks Swinney’s love and loyalty for Clemson would be a factor if Alabama comes calling.
“I think Dabo is happy here,” he said. “He’s built this program his way, with his belief system, the way he wants to run a program. And there’s a lot to be said for having built it yourself.
“We’re going to continue to support him when we have needs or areas of improvement. We think there’s something pretty special here at Clemson.”
The Jimbo jilt
Seminole fans feel the same way about Florida State. But that, along with a lucrative long-term contract that ran through the 2024 season, was not enough to keep Fisher in Tallahassee.
Texas A&M threw unprecedented money at him in December ($75 million over 10 years, guaranteed) and he jumped at it. He paid FSU about $8 million to buy out of his contract.
It’s pretty rare for a highly successful coach at an elite program like FSU to make the leap to a program that is still striving to become elite.
This situation was different. A&M, at the moment, has what FSU does not — ridiculous money to spend on a coach and palatial facilities.
“I guess I wasn’t totally surprised (that he left),” FSU athletic director Stan Wilcox said. “I knew that Jimbo had a pretty good situation here. There were things here that were very attractive for him to stay. I knew there were things that were very, very attractive for him at Texas A&M.
“It’s a matter of when you look at the resources of an athletic department, sometimes you are maybe not at par with somebody with the resources they have, so you’re somewhat limited in what you’re willing to do, because you have a fiscal responsibility to the university.”
Like Clemson with Swinney, FSU showed its commitment to Fisher with a huge buyout in his contract should he be fired without cause — almost $40 million. But in the end, it didn’t matter.
“Over the years, we continued to make modifications to help him feel as comfortable as he possibly could to stay here,” Wilcox said. “At some point it gets to a point where we can only do so much, and he has to make that decision.”
Jimbo went for the money.
The money train
Agents and ADs agree on one thing: these lucrative contracts with the big buyouts are only going to grow.
“(There is no ceiling) as long as college football is still the most marketable sport in the country,” said Armstrong, who has been negotiating a new contract extension for Meyer with Ohio State. “I think when you look top to bottom, you look at fan attendance and support, viewership, the market for college football is still really, really strong. And that looks to remain constant for certainly the near future.”
Said Stricklin: “It’s an interesting ecosystem. I don’t know how you back up from where we are. I’d love to see it backed up, but I don’t know how you do that.”
Overall college football attendance was down in 2017, but profits continue to swell. Last month, for instance, the SEC announced that the conference generated $596.9 million in revenue for the fiscal year 2016-17. The payoff to each school is a record $40.9 million.
Greenberg said college football has been aggressive in staying ahead of the curve finding ways to generate more revenue.
“It’s really sort of them adopting the financial techniques of professional football that is now making college football so wealthy,” Greenberg said. “It’s in the form of the enhanced seating, naming rights, the television contracts, the corporate sponsorships, the donor programs that exist.
“It’s a carbon copy of the pro model that they have picked up. So, they have these monies. I’m not saying it’s the best use of the monies. I’m very much opposed to using monies for these large payoffs, but it’s strictly a business decision and now it’s just become part of the game.”
Spurrier, whose old-school first Duke contract is now a distant memory, questions whether all this money will turn out to be too much for some.
“You sometimes wonder if all the money has a way of affecting coaches to think, ‘Well, even if we don’t do very well, guess what, I’ve got the full bundle on the way,’ ” Spurrier said. “I don’t know, sometimes it’s interesting. You would think people that have anywhere between seven and 10 million dollars, how different are their lives if they have 100 million? I don’t know.”
We may find out soon enough.