By Robert Boland, Esq.
Director, Master of Sports Administration and MBA/MSA Programs
Ohio University
Principal of Boland Sports Practice, LLC
The University of Minnesota’s contract with recently hired athletic director Mark Coyle is reported to contain toughened and specific morality-based termination language allowing the university to discipline or terminate him in the event he consumes drugs, alcohol or other substances or engages in an act of dishonesty that materially affects his performance as athletic director.
First reported in the Minneapolis- Saint Paul Business Journal http://www.bizjournals.com/twincities/news/2016/05/12/university-minnesota-ad-teague-coyle-contracts.html Coyle’s contract represents a clear and dramatic change from the language contained in the contract of the person he replaces, Norwood Teague, who was removed after allegations of sexual harassment came to light.
Termination language is usually the most challenging and fought over portion of any college coach or athletic director’s contract. It is from the university’s perspective the area where they have the most “skin in the game” because of both the public nature of the employee, and the length and the dollar figures involved in these contracts. Coyle’s Minnesota contract calls for base compensation of $850,000 a year, bonuses of $150,000, deferred retirement payments of $100,000 and a buyout of $500,000-going to buyout Coyle’s prior contract with Syracuse University, where he had served as athletic director for only 11 months. Given that Minnesota has as much as $1.6 million invested in Coyle, who returned to the Twin Cities where he had previously served as an associate athletic director and was well-regarded, in just his first year, it is understandable that the university would want to have strongly protective language in its contract with him.
Comparing the contracts of Teague and Coyle, Teague’s executed in 2012 had just five bases of for-cause termination, including two catch all provisions for inability to perform his duties and for any undefined act of moral turpitude. Coyle’s 2016 contract has seven bases of for-cause termination, including specifically worded provisions allowing termination for: material fraud or dishonesty in the selection process; use or consumption of alcoholic beverages, drugs or other chemicals (except as prescribed by a physician) that materially affect the performance of his duties; and the violation of any university policy or law.
But does toughened language protect a university’s investment and will we see similar language in other contracts? The answer, at least from the perspective of someone who studies this market, is not necessarily. Rather than representing a deeper examination of the market, duties and trends of athletic leadership, the enhanced Minnesota termination provisions are a reaction from recent negative experience and unlikely to be replicated broadly across the nation, even as commonsensical as they may be. It is worth stating now that this analysis is not in any way an express or even implied criticism of the University of Minnesota, its counsel or Mark Coyle. This contract is merely used as an illustration of market forces and as a point of analysis on how this market is in need of greater consideration from the university side both in the hiring and contract processes.
As one experienced in-house counsel said, when asked for this article, “many provisions contained in contracts aren’t always helpful or enforceable, but rather are a reaction based on the client’s [in this case a university] recent experience.” This attorney went on to say that, “being in-house counsel is a service practice and there are times when language in a contract is there because the client has asked for it.”
Universities will continue to try to immunize themselves from scandal or bad acts by highly paid, very public employees with carefully worded contract terms. But an examination of market forces and applicable law indicates this may not provide much protection.
The Market Driven Reasons
Mark Coyle’s own journey from the leadership of the athletic departments of Boise State, Syracuse and now Minnesota in less than a year, indicates that athletic directors, now like coaches, are operating in a market that is increasingly fluid and national in scope. What this means is that overreaching or unfavorable language in one school’s contract can put an athletic director back into the market and there will be another institution willing to pay more and write a more favorable contract.
The athletic director market is not in an absolute race to the bottom (or the top if you look at it from an AD’s point of view). But assessing it in purely economic terms, it is one that is churning quickly. It is one that favors successful incumbent athletic directors. Also as coach pay rises due to a small number of highly skilled representatives or agents having superior economic and contractual information of the market compared to the universities bidding on their services, this trend has been mirrored among athletic directors, who are now frequently represented and they, themselves, have very strong market knowledge. That Minnesota is paying Coyle twice what his predecessor made $850,000 to $422,000 in base salary reflects this trend nearly perfectly. Getting a successful candidate costs money and the market is tilted to the candidates, which makes it difficult for universities not at the absolute top or destination point of the market to gain much advantage through the imposition of draconian termination language.
In making the move from Syracuse to Minnesota, Coyle described it as being for family reasons, returning to a place that had great meaning to him so there is little doubt that both he and the university hope his to be an enduring tenure, however, just the notion that Coyle still makes less than the average Big 10 athletic director indicates that there is room in the marketplace for him to make another move upward, at least financially. http://www.startribune.com/new-gophers-ad-mark-coyle-comes-home-to-many-challenges/378997881/
Coyle and Minnesota are just the latest illustrations of a market that is changing and one where actions taken in one contract can be felt across the entire market place. This is something universities commonly and unfortunately overlook in their hiring and contracting practices but they are all interconnected. Certainly no school wants difficult or painful acts emerging from the athletic director’s office and even less want to be financially responsible to an athletic director who caused embarrassment to the institution. But given this market direction this is most effectively addressed in better vetting and investigation of candidates before hire, rather than trying to contractually manage it after the fact. This is especially true when the terms of such contracts nearly automatically give rise to litigation by parties who are already represented and the sums involved make litigation worthwhile.
It’s Always About the Money
It is important to remember that broadly universities do get to pick their highly compensated athletic leaders. Where they begin to tie themselves in knots financially and in terms of litigation is when they over complicate the process contractually with issues like termination language that is slanted favorably to the university. Such language either has a negative market outcome as discussed above or gives rise to conflict when the contract ends. It is difficult to think of a university that has walked away from a battle with a coach or AD cleanly. The real issue with compressed athletic budgets is how freely or inexpensively universities get to move on and how much righting a listing ship will cost after a crisis. But trying to contract certain behaviors beyond adjudicated violations of law and NCAA violations are very difficult and actually give slack to clever agents and attorneys to use in arguing for their clients.
Rather than trying to impose tighter termination language, better investigation, more strategic renewal or bonus provisions, arbitration as a sole remedy, and even perhaps more enlightened contract lengths, such as shorter duration but “evergreen” contracts- common on university campuses, where for example the employee is deemed to be in the first year of a self-renewing three year deal, unless specifically not renewed, which limits liability and duration under the contract to two years, might be better strategies for handling such a fluid market.
State Law & Public Employee Rights
The most complicated term in the new Coyle deal is the alcohol provision. It is natural that in light of recent events, perhaps most notably at the University of Southern California where head football coach Steve Sarkisian was terminated after making public appearances where he may have been under the influence of alcohol, it is understandable that a university might want to have strong contractual language on alcohol or drug use. But the lawsuit Sarkisian filed, alleging he was illegally terminated under California disability law, recently sent to arbitration, was public and ugly enough to have harmed everyone, when truly only money was at stake. http://www.latimes.com/sports/usc/la-sp-usc-steve-sarkisian-lawsuit-20160302-story.html
Similarly, at a public institution, like Minnesota, an athletic director like any employee may have a web of administrative and due process steps to entangle or delay anything that might be gained by inserting a specific clause like the alcohol or drug clause contained in the Coyle contract. That contract specifically made him a public employee and subject to university policies. So when discussing schools where the athletic director is subject to university policies or public employee laws, that in most cases now provide for rehabilitation and treatment prior to termination, the enforceability of such a clause may be limited or entirely unenforceable.
That Sarkisian was able to bring a state law claim against a private university, which has not to date proven successful, but has certainly been troubling and caused embarrassment for the employer and in part led to the retirement of athletic director Pat Haden, should give pause to state or public institutions seeking to enforce similar language. Even the most cursory survey of public employee rules or policies nationally would indicate such a provision would be difficult to enforce.
Moving Forward
A holistic rethinking of the hiring and contract process for coaches and athletic directors is an important, perhaps crucial step that needs to take place across this market place. But trying to close the barn door contractually after the horse is out does not accomplish much and perhaps actually causes harm to the parties. Rather than trying to contractually close that door, universities need to reconsider their candidates and remember that they are not really trying to legislate behavior but rather trying to manage the costs of moving on most cost efficiently and thus simplify a highly complicated process.
