With Salaries Rising, Are There Better Ways To Construct Coach’s Contracts?

December 14th, 2016 | by Ronnie Burton Jr
With Salaries Rising, Are There Better Ways To Construct Coach’s Contracts?
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Contracts

Another year has gone by and once again football coach’s salaries have increased. With lucrative TV deals, the facilities arms race, shoe contracts, and conference realignment we are seeing a wave of money flowing down to coaches. According to publicly available data, the SEC had the highest median coaching salary at $4,172,500, followed by the Big 12 ($3,540,788), the Pac-12 ($3,102,960), the Big Ten ($2,753,100) and the ACC ($2,562,485). With so much at stake, finding innovative ways to construct contracts that are athletic department friendly but competitive in today’s marketplace have become increasingly complex.

Martin Greenberg, a Milwaukee-based sports attorney states, “There’s such tremendous pressure to generate revenues and win that basically these universities are sort of bending over contractually to get these coaches in the door. Euphoria sometimes overtakes objectivity and intelligence.” There is always a possibility a coach will not succeed. With many buyouts reaching the eight figure mark, schools have to account for lost revenue on top astronomical payouts to coaches and staff. One way to construct contracts is rewarding coaches based on performance instead of huge guaranteed sums. Recently, one athletic director rewarded a Power 5 head coach with an incentive heavy deal that is fiscally friendly to the university just in case he is terminated.


This past week Sheahon Zenger, athletic director at the University of Kansas awarded head football coach David Beaty with a contract extension. Beaty, who is now is under contract through the 2021 season, will receive $1.6 million in 2017 and $100,000 raises each subsequent year. His new contract contains incentives where he will receive $50,000 for every FBS win and $100,000 for any BCS or Power Five victory. Kansas who over the past ten years has struggled to find a long tenured head coach has decided to move away from what the market dictates and will compensate based on performance incentives.

Coach Beaty’s New Contract: 2 year extension through 2021, $1.6 Million in 2017, increases $100,000 per year

FBS Win$50,000
BCS/Power 5 Win$100,000
Big 12 Championship$100,000
Non CFP Bowl Game$200,000
Non CFP Bowl Win$100,000
CFP Bowl Game$250,000
CFP Bowl Game Win$500,000
AP National Coach of the Year$50,000
Big 12 Coach of the Year$50,000
KU Buyout if fired without cause$ 3,000,000

Since 2009, KU has paid out former head coaches Mark Mangino ($3 million), Turner Gill ($6 million), and Charlie Weis ($5.4 million). With history as a backdrop Beaty’s contract ensures that if he wins he will be rewarded. If he doesn’t, his compensation will remain relatively the same. In an era of huge buyouts and guaranteed compensation Beaty’s deal represents a stark contrast to many other Power 5 schools.  Even though KU hasn’t been successful on the gridiron this contract represents a new way to look at compensation when creating a multi-year deal for a head football coach.

Ronnie Burton Jr About Ronnie Burton Jr
Ronnie Burton Jr., is an emerging professional within collegiate athletics and higher education. Prior to writing for CollegeAD Ronnie worked in administrative and coaching positions at California Lutheran University, Arizona State, and Michigan State. A 2015 graduate of Arizona State’s Masters in Sports Law and Business Program he looks to be an asset for organizations making decisions in the areas of regulation and revenue generation. A former college baseball player, Ronnie’s passions reside at the intersection of higher education and athletics.

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