Yesterday, I posted a link to the term sheet that Urban Meyer and Ohio State agreed upon, which sets forth the basic terms of Meyer’s employment as head coach (and will be replaced by a formal contract at some point).
Here are a few notes and observations regarding the term sheet:
There is no buyout clause mentioned in the term sheet. Instead there are three retention bonuses, payable to Meyer if he is still employed as the head coach as follows:
- January 31, 2014 – $450,000
- January 31, 2016 – $750,000
- January 31, 2018 – $1,200,000
Similar to a roster bonus in professional sports, a retention bonus rewards a coach for remaining at the school on a given date (after the hiring season has come and gone). A retention bonus would ideally replace a buyout clause. Unlike buyout clauses, enforceability is not an issue for the school. Moreover, some schools prefer the concept of rewarding a coach for staying put rather than punishing the coach for leaving while under contract.
Ohio State retains exclusive rights to its camps. Although it is somewhat unclear from the term sheet, it appears that Meyer can be involved with other football camps to earn supplemental compensation.
One of the most common, and most lucrative, arrangements allows the coach to own, operate and receive all profits from the camp. The school provides the facilities and often some equipment for a specified fee. Ownership also allows the coach to control every aspect of the operation, from hiring coaches to entering agreements with local vendors. The camp essentially becomes a separate business venture for the coach. However, there are many legal issues to consider.
NCAA Academic Requirements
Meyer may also earn annual bonuses tied to academic measurements, such as Academic Progress Rate (APR) and Graduation Success Rate (GSR).
- APR of 990-999 – $100,000
- APR of 1000 or above – $150,000
- GSR of 70-79.9% – $100,000
- GSR of 80% or above – $150,000
Although academic incentives are typically included in coaching contracts, one could infer that such provisions have taken on increased importance in light of recent and ongoing NCAA efforts to reform Division I athletics.