Mark Alesia reports that Indiana University's $750,000 "please don't sue me" payment to Kelvin Sampson increased the Athletic Department's buyout total to $4,012,000 since 2000. Although Indiana gets today's headlines, Alesia notes that Minnesota coughed up $4.9m to their ex basketball and football coach in 2006. Andrew Zimbalist, quoted in the article, thinks this is madness. It might be simply that, but it's also an interesting puzzle.
Solving the puzzle requires data. Tony Barnhart examines the SEC and ACC football landscape, and provides a list of the coaches' contracts and buyouts. Georgia coach Mark Richt tops the buyout list at a whopping $12 million: $2 million for each of the six years that remain on his contract. But as Barnhart notes:
Ironically, if the coach and the school can't agree the buyout may not be enforceable, at least in Georgia. State law stipulates that such buyout clauses must reflect a "reasonable pre-estimate" of the probable loss. The clause must also provide for actual damages and not as a penalty against the party who terminates the contract.
"The burden of proof falls on the party who breached the contract," said Steven M. Winter of the Buckhead law firm of Weinstock & Scavo. "And in some cases that can be hard to prove."
Rich Rodriguez, the former West Virginia coach who is on the hook for a $4m buyout, may be playing this uncertainty to his advantage. Rodriguez has offered $1.5m to settle the issue, which is the amount former West Virginia basketball coach Beilein settled for last year (although his buyout was only $2.5 million). It seems clear to me that Rodriguez breached a contract he had signed just four months earlier with West Virginia, and perhaps took an ill-considered risk when he signed with Michigan. Even though the price is incredibly steep (imagine working for free in effect, for well over one year of a six year contract), I'd guess the ultimate payment will be closer to $3 million than $1.5 million. But this is pretty murky territory, and the legal environment seems tilted in favor of the coaches, whether they are fleeing or are fired.