The dynamic between the coaches of Division I football teams and the universities that employ them is quickly becoming a hot topic. The ever-increasing popularity of the college game coupled with the vast financial opportunities have thrust coaches into the spotlight. As players only wear the colors of their university for only three or four years, head coaches have become the proverbial faces of their respective collegiate programs.
The desire of universities for a top-flight coach has perpetuated a system of free agency in the coaching industry. Perhaps no coach better represents this trend than Michigan’s Rich Rodriguez.
West Virginia v. Rich Rodriguez: Buyout Clause Upheld
Rodriguez was highly successful leading the West Virginia University football program, implementing a quick-strike, spread offense that made the Mountaineers the toast of the Big East and a nationally ranked team. The success of Rodriguez did not go unnoticed. The once-mighty Alabama Crimson Tide even attempted to lure Rodriguez to roam the sidelines once patrolled by Bear Bryant. Rodriguez waffled before signing an extension with West Virginia.
West Virginia, made fully aware of Rodriguez’s wandering eye during Alabama’s pursuit of the coach, had the foresight to protect itself contractually. The contract extension between West Virginia and Rodriguez contained a $4 million buyout clause, enforceable should Rodriguez leave the university. One year after turning down the Alabama job, Rodriguez accepted the head job at the University of Michigan.
Surprisingly, Rodriguez did not negotiate a reduction of the $4 million payment before departing West Virginia, nor did it appear he had an agreement with Michigan that it would assume the payment. Rodriguez refused to pay the $4 million, claiming that the university broke certain oral promises it made to him, leading to litigation in federal court. The case was recently settled - with Rodriguez (perhaps with some contribution from Michigan boosters) paying the entire $4 million to West Virginia.
West Virginia v. Rodriguez could reasonably be read as a shift in power from coaches to the universities. Although the court was not given the opportunity to decide the case, the fact that the settlement paid West Virginia every penny of the buyout certainly suggests that the court would have found the clause enforceable.
Rutgers’ Greg Schiano and His Secret Escape Clause
Rutgers head football coach Greg Schiano created a stir, or rather a collective sigh of relief in New Jersey by turning down the Michigan job that Rodriguez ultimately accepted. Recently, Schiano created another stir when it was reported that he had negotiated a secret side-deal with Rutgers. The discussion of whether a public university should negotiate a secret deal with one of its coaches is best left to others. However, the actual terms of the contract are of great interest from a sports law perspective. One of the provisions of this side deal is that Schiano, whose contract contains a $500,000 buyout (should he leave after the 2009 season), can leave Rutgers without penalty if the university fails to complete its 14,000 seat, $102 million stadium renovation on time:
We wanted to maintain the momentum of the program…We wanted to keep Greg Schiano as our coach…It is a commitment to the coach that the two phases of the expansion of the stadium will be completed by the beginning of the 2009 football season. -Rutgers University President Richard McCormick
In the Rodriguez case, the coach’s claims that the university broke promises made to him were weak, as the alleged terms were not contained within the four corners of the contract. (A similar situation arose when June Jones left the University of Hawaii to become the head coach at Southern Methodist University). Schiano, however, was able to get these terms in writing from Rutgers and can leave without penalty if the terms are not fulfilled.
An escape clause such as Schiano’s may mitigate the power of universities when it comes time to negotiate a buyout clause with a coach. Also, an escape clause is likely to strengthen an argument that a buyout clause is enforceable, as both parties receive benefits and give up rights under the deal. Accordingly, a court is unlikely to find such a clause unconscionable.
In collegiate football, the top schools may not agree to such clauses. Certain programs – Florida, Michigan, Notre Dame, USC, etc. - possess inherent leverage arising from the universities’ history and success. Thus, these schools may not need to agree to creative contract terms to attract and retain top coaching talent. However, schools like Rutgers, that run the risk of losing their coaches to larger programs, may be forced to accept such terms to keep coaching talent, like Schiano, on campus.