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The 5-Year (or Under) Plan

July 26, 2006

A university gives its new high-profile coach a multiyear contract. He meets with boosters, professors and reporters, and proudly proclaims: This is my dream destination. Two years later, he is gone. Maybe he exceeds expectations and leaves for a more lucrative position at an even more prestigious sports program. Or his team underperforms and he is forced to resign -- leaving the university to honor a hefty buyout clause and search for another coach who demands a large salary and compensation package.

This scenario, in various permutations, plays out across the country at National Collegiate Athletic Association Division I universities with men's basketball and football programs. It's an often costly cycle that few highly competitive (athletically speaking) institutions manage to avoid.

Last week, the University of Missouri Board of Curators received an executive order   drafted by the university's president, Elson S. Floyd, aimed at placing controls on athletic spending and preventing public relations nightmares. According to the guidelines, coaching contracts that are longer than five years require approval by the board.

The move comes less than six months after Quin Snyder, former head men's basketball coach at the university's flagship campus at Columbia, resigned in mid-season. The university came under fire for settling on buyout terms that paid the coach $574,000. Snyder, whose base salary was $195,000 a year, had two years remaining on his contract. If the coach hit all his incentives, his maximum salary would have been $1.7 million, according to a university official. He had been guaranteed more than $1 million per year -- including $120,000 in apparel revenue and $100,000 in annuity.

One board member, Doug Russell, said the terms of a buyout clause for Snyder's replacement, Mike Anderson, differed from the ones that had earlier been brought to the board. "If I have to read about the contract in the Columbia Daily Tribune,   there's a breakdown in the process," he said. The new guidelines, which didn't require a vote by curators, call for more board oversight of the athletics department. The board also approved the creation of a compensation and human resources committee that will look at hiring practices and multiyear contracts given to employees in other areas of the university.

"This is not just a focus on athletics," Russell said. "The board is taking a look at contracts that make substantial commitments (to employees)."

The athletics order states that contracts "should not include buyout clauses calling for the individual to receive more than the balance of the annual base salary the person would have earned under the remaining terms of the contract."

Floyd, the president, has publicly acknowledged that limiting a coach's contract length may put Missouri, which plays in the Big 12 Conference, at a competitive disadvantage. Established coaches often seek job security in a profession where moving every three years isn't unusual.

John A. DiBiaggio, former president of the University of Connecticut and Michigan State and Tufts Universities, said the Missouri regulations could hurt its recruiting of both athletes and coaches, because everyone involved in a program seeks stability.

Winning -- which often starts with attracting big-name coaches -- is too important to most programs, he said.

“It’s an interesting concept," DiBiaggio said of the provision. "But it's not going to be universally accepted (by other Division I members)."  

The issue of costly coaches and benefits packages came up when DiBiaggio was at Michigan State, one of the Big Ten's preeminent men's basketball programs. He said there was often tension between faculty and trustees, some of whom were friends with the coaches.  

“I understand the frustration," said DiBiaggio, who is now a consultant at Academic Search Consultation Services, a search firm. "The fact of the matter is lots of us are concerned about the lengths of contracts and the amount of money being paid. I'm not anti-sports ... but I'm concerned when they become so commercial and out of balance with the university.

"A Nobel laureate is lucky to be paid $300,000, and here we are paying coaches millions of dollars," he said. Much of that money comes from extra benefits that are part of the contract and that the university is obliged to honor. 

Nathan Tublitz, co-chair of the Coalition on Intercollegiate Athletics, a national group of faculty members that monitors issues in sports, said he supports the Missouri resolution and hopes other colleges consider similar provisions.

"It's a step forward in ensuring financial responsibility for athletics and expenditures in future years," said Tublitz, a professor of biology at the University of Oregon. "To make a long-term financial commitment to a coach whose (financial) benefits to a university may be negligible or zero is unwise."

Most public and private universities subsidize their athletics programs, he said, and some have unwritten guidelines about the maximum length of a coach's contract.

In the early 1990s, the University of North Carolina's Board of Governors took steps to stop what it called "painfully embarrassing" episodes of making large severance payments. The board passed rules mandating that all terms and conditions of a coach's contract must be endorsed by the individual campus's Board of Trustees.

Grant Teaff, executive director of the American Football Coaches Association, said he doesn't see anything "strange or abnormal" about a five-year limit on contracts. Teaff said the average college football contract is about four years, and after three years, extensions are common.

Teaff added that it should be the decision of administrators, not the governing board, to set rules limiting a coach's contract. “The board could hamstring an institution if it wants to keep the right person," he said.

 

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