Coaches’ buyouts are no bargains
Unless you’re comparing Mike Macintyre’s $10.3M parting gift from CU with others, that is.
BOULDER» If you got heartburn watching former Colorado football coach Mike Macintyre walk away from the storm with his framed bison under one arm and $10.3 million under the other, imagine the indigestion they’re feeling down in Louisville, Ky., right about now.
The Cardinals fired Bobby Petrino on Nov. 11. And handed him $14.1 million as a going-away gift.
“I’m sure we’ve been shaking our heads now for some time,” chuckled Chuck Neinas, the Boulder-based athletics consultant and a longtime mover-and-shaker in big-time college sports, when asked about buyouts. “It’s just the price of doing business.”
And that price keeps going up. Of the nine public universities whose football teams are listed among the top 10 of the College Football Playoff rankings, their coaches have contracts with buyout clauses that cost an average of $20.9 million as of Dec. 1. An estimated $75 million was spent by Football Bowl Subdivision schools last fall in order to pay former coaches to, well, not coach. CU ($10.3 million), Louisville ($14.1 million) and Maryland ($5.1 million) owe nearly $30 million to Macintyre, Petrino and DJ Durkin, respectively, all fired in recent weeks.
“Let’s say you want to reward and maintain a coach who you feel has been successful and you want to continue to be with the program,” Neinas said. “You take a risk.”
And sometimes, you get burned. Stephen Tebo heard rumblings about Macintyre’s future — and, specifically, what it would take to get out of Macintyre’s contract — more than three weeks ago, as the Buffaloes (5-7, 2-7 Pac12) went from 5-0 and a top-25 ranking into a tailspin.
“I just thought to myself, ‘You really wonder who negotiates these contracts up front,’ how (a school) can leave so much on the table,” said Tebo, a Boulder real estate developer and a longtime Buffs booster. “I’m in business,
and it’s all about production for me.”
Macintyre is owed $10.3 million after CU prematurely ended his contract, which had been extended in June 2017 and runs through Dec. 31, 2021.
“That makes me even more furious,” said Joanne Belknap, a professor of ethnic studies at CU and a Buffs alum. “It’s horrible business to me. I’m someone who donated a ton of my money to the university because I want more students to be able to afford college. I love teaching. I love my students. And this just makes me sick.”
The funds to pay off the contract will come monthly from the athletic department, according to CU, which added that no money funneled to Macintyre — who won 30 games over six seasons — will be pulled from tuition, taxpayer dollars or the campus general fund. It’s times like these when athletic director Rick George sometimes has to pass the hat to the program’s wealthiest and most loyal donors. Oregon has Phil Knight. Oklahoma State has T. Boone Pickens. CU has George Solich, the president and CEO of FourPoint Energy and an alum who was a point man in the pursuit of then-cincinnati football coach Butch Jones in December 2012.
Tebo said neither chancellor Phil Destefano nor George came to him, caps in hand, for help covering the cost of Macintyre’s buyout. “Nope, it’s not in my budget,” Tebo laughed. “So hopefully, it’s in theirs.”
“It permeates American culture”
Not every university winds up on the hook for the last penny of every coaching buyout. George stressed that if Macintyre finds “employment in the National Football League or as a college head coach,” the $10.3 million owed will be reduced — although he didn’t say by how much.
“One of the problems is the length of the contracts,” Neinas said. “No coach is going to come without a five-year contract. I understand that, because it takes you time to build a program. It used to be, ‘Hey, give guys five years (to win),’ then it’s four years. Now, basically, you see a lot of them are done after three years. Let’s say I sign a fiveyear contract that (if I’m gone) after three years, I get two years of pay be- cause that’s what my contract calls for.”
But sometimes even the best, and most fiscally responsible, intentions of college administrators turn to dust.
As the athletic director at Colorado State from 201114, one of Jack Graham’s first tasks was to pump life — and dollars — into a sinking football program. Graham fired football coach Steve Fairchild and brought in Alabama offensive coordinator Jim Mcelwain, and later worked out a contract extension with Mcelwain worth $15 million over 10 years. Both sides also worked out an interesting exit contingency, a buyout of $7.5 million that was going to be paid out either way — on Mcelwain’s end if he left early, or by the school to the coach if it fired him before those 10 years were reached.
“I called it a prenuptial agreement,” Graham explained. “If either one of us wants to get divorced, it’s going to be extremely painful on either party.’ ”
That divorce came anyway, as Mcelwain jumped to the head coaching position at Florida in December 2014. The prenup also featured a provision that allowed CSU president Tony Frank to reduce or waive the buyout for “extenuating circumstances.” Mcelwain wound up paying $2 million out of his own pocket, while Florida’s University Athletic Association chipped in for $3 million over six years and the Gators’ athletic department agreed to a $2 million guaranteed game between CSU and Florida to be played between 2017 and 2020.
“I remember telling Tony Frank, ‘No. 1, if we want to get the kind of coach you’re talking about, it’s going to cost us $1.5 million (a year),’ ” Graham recalled. “And I said, ‘No. 2, when we move down this process, you’re going to gulp really hard because that’s what it takes to succeed in college football today.
“You have to remember, at CSU it’s an under-funded athletic department. The notion that you could point to the fans and say, ‘We need to raise $2 million to $3 million to fire the football coach,’ with this fan base, that’s a nonstarter right there. It may exist at some universities. It may exist at CU. But that does not exist at CSU.”
Graham, a former Rams quarterback, cut his teeth in the business sector. He said the golden-parachute escape hatch for big-time college football coaches is no different than those extended to Fortune 500 CEOS or major celebrities.
“It’s not unique to athletics; Megyn Kelly got $30 million from NBC,” Graham said. “It permeates American culture.
“And from my perspective, it’s a huge problem, because we’ve always been a meritocracy, and (with) these people we expect to lead our businesses and lead our universities, we violate our own values when we make these agreements. I think it’s a huge conflict.”
“Really, it’s our fault”
It’s not so much the first prenup as it is the second. Or the third. The cycle is rote at Power Five schools these days: Lose big within your first three seasons, and the coach’s seat heats up considerably in Year 4. Win big within those first three or four seasons, however, and the old contract is quickly replaced with a new one with more years and more dollars.
“You’ve had a great year and the rumors start, and your guy’s saying, ‘I don’t really want to go, but gosh, there’s (another offer),’ ” said former CSU athletic director and current Big 12 deputy commissioner Tim Weiser. “So you’re kind of backed into this situation where either you believe him or you don’t.
“And then he leaves and on the way out the door, he says, ‘I talked to (the AD) and I was hoping he was going to give me a counteroffer, but he didn’t say a word.’ So now you’re left in a really bad spot because now it looks like he left, in part, because you didn’t do a good enough job of keeping him.”
After the Buffs posted a 10-4 record and won the Pac-12 South in 2016, Macintryre said he fielded job offers from three schools. George and his superiors responded with a three-year, $16.25 million extension that ran through 2021, an extension that was approved unanimously by the board of regents in June 2017, just a few days after the completion of an internal investigation into how CU had handled the domestic violence allegations leveled against former football assistant coach Joe Tumpkin.
“Absolutely I would’ve done the same thing today that I did back then,” George said when asked about the extension. “I have no regrets.”
Since the extension was approved, Macintyre’s teams posted a record of 10-13.
“Really, it’s our fault,” said David Ridpath, a Colorado State alum who’s a professor at Ohio University and president of The Drake Group, a consortium committed to reform in Division I athletics. “You fault the fans, the boosters and everybody. It’s a perpetual cycle of, ‘When we signed this coach, he always has this golden parachute.’ Instead of saying, ‘Fulfill your contract,’ we say, ‘(After a good season), we’re going to sit down and rip this contract up and give you an even better one and a bigger buyout.’ It’s unbelievably stupid. It’s financially irresponsible.”
Blame coaches’ agents, the sport’s other big winners. Blame television dollars — the Pac-12 is projected to distribute at least $33.5 million in revenue to member schools for the 2018 fiscal year.
“All the media money that came into Division I athletics did was to move the decimal point one spot further to the right, to the benefit of the coaches,” Graham said. “It’s absurd.”
Blame university presidents who don’t want to rock the boat.
“It’s just this fear of being irrelevant, I think,” Ridpath said. “And (the administration feeling) a desire that, ‘if we win, everything is going to be great at the university.’ Which we know is not the case. It’s just continually the dog chasing its tail.
“I just don’t think there’s a president that has enough backbone. I think they’re afraid of the college athletic machine swallowing them up and boosters being mad at them. It’s a perpetual cycle. And it’s a pretty (ineffective) cycle, when you think about it.”
Sean Keeler: skeeler@denverpost.com or @Seankeeler