Donovan Incident Brings Focus Back to Coaching Contracts

Sep 14, 2007

After the incident with Billy Donovan, in which the University if Florida head basketball coach signed a contract with the Orlando Magic before changing his mind and returning to Gainesville, there is increased scrutiny of coaching contracts.
“Clearly, what happened with Billy Donovan raised awareness among athletic directors,” said Dutch Baughman, the executive director of the Division 1A Athletic Directors’ Association.
Baughman added while the problem of coaches leaving schools in early to mid-contract is not new, athletic directors are embracing an emerging set of tools designed to prevent such scenarios from unfolding in the first place.
Preeminent among those tools are the buyout clause. While these clauses can be expensive, they are becoming increasingly necessary in the case of high-profile coaches.
Baughman said the frequency of such clauses in contracts is rising. And to make such clauses more palatable, schools are offering a new wrinkle, or what Baughman terms “the Get Out of Jail Card.
“This allows the coach to break the contract and avoid the buyout clause, if they choose one of the following institutions. That’s a real departure from what has been done in the past,” he says. “The contract will actually specify the schools or the professional ranks.”
The Carrot Instead of the Stick
Of course, most schools hope to avoid losing the coach to begin with. While a buyout and non-compete clauses presuppose the possibility of a departure, the tool of choice with many athletic directors these days is the retention clause.
In August, the University of Texas System Board of Regents recently approved a contract for UT Head Football Coach Mack Brown that would not only increase his base salary to $2.81 million over the next ten years, but make him eligible for $300,000 in retention bonuses.
Such bonuses aren’t new.
On July 14, 2006, the University of Louisville announced that it had given Bobby Petrino a new 10-year contract, which included retention bonuses of $1 million in 2007, 2010 and 2013, and a $2 million retention bonus in 2015. Six months later, Petrino was coach the Atlanta Falcons in the NFL.
Another such instance was played out on April 18, 2003 when the University of Kentucky gave then-UK Head Basketball Coach Tubby Smith a contract extension and pay raise. Further down in the announcement, Kentucky noted that Smith would receive retention bonuses following the 2007 and 2011 seasons. Smith would leave shortly after the SEC tournament for the University of Minnesota. One of the then unstated reasons for his departure was his desire to leave the pressure cooker for a better quality of life.
“That can be enormous factor,” said Baughman. “We’re seeing decisions about family dictate not only whether or not coaches remain in their current job, but also athletic directors.”
The quality of life factor could be seen last spring when Creighton University’s head basketball coach Dana Altman accepted a similar position at the University of Arkansas last spring. Many who knew Altman were stunned; not because the Razorbacks’ position wasn’t a good one, but because Altman “fit” at Creighton. Altman ultimately went to the press conference and reneged on the verbal agreement.
Similarly, it has been well-chronicled how Donovan has created a near-perfect environment for both himself and his family in Gainesville. That much was borne out in his prepared statement after reaching an agreement to sever his ties with the Magic: “Although this has been a difficult time for everyone, for which I am profoundly sorry, in my heart I know that this is the right thing for the Magic and for me.”
This factor can also influence existing coaching situations, even involving small-market coaches, who are being courted by the majors.
Bill Carr of Carr Sports Associates, Inc., an executive search firm focused exclusively on college athletics, notes that factors, such as comfort level, are becoming increasingly influential when it comes to retaining a quality coach as well as attracting one from a small program. “You can no longer assume that a financial package is the only factor in a coach’s decision.”
For Donovan, who could have effectively doubled his salary, it took returning to Gainesville the Friday before his basketball camp to realize that.
“This decision in a roundabout way, which I am not happy about, has crystallized in my mind where I need to be,” Donovan said a week after signing the Magic contract. “I couldn’t get to that decision before getting to that point.”


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