By Jordan Kobritz
On November 26, the University of Tennessee hired Ohio State defensive coordinator Greg Schiano to be its next football coach. Within a matter of hours UT experienced a case of buyer’s remorse, a decision that could cost the University millions of dollars.
Tennessee Director of Athletics and Vice Chancellor John Currie and Schiano signed a Memorandum of Understanding setting forth the basic terms of their agreement. Schiano was to be paid $27.7 million over six years. The Memorandum further stated that it “constitutes a binding agreement between Coach and the University…”
UT backed out of the deal after fans, former players, elected officials, students and alumni created a firestorm on social media claiming Schiano covered up child rape while coaching at Penn State at the same time as convicted child molester Jerry Sandusky. The allegations stem from a deposition given by former Penn State assistant coach Mike McQueary, the star witness for the prosecution in a criminal case against Sandusky that led to convictions on 45 counts of sexual abuse. The August 2015 deposition, taken in a civil suit between Penn State and its insurance company to determine liability for payouts to Sandusky’s victims, came three years after Sandusky was sentenced to 30 to 60 years in prison.
In his deposition, McQueary said Tom Bradley, another Penn State assistant coach, had told him that sometime “in the early ‘90s…Greg had come into his office white as a ghost and said he just saw Jerry doing something to a boy in the shower.” Schiano has denied the allegation, as has Bradley. McQueary’s statement was double hearsay, which is probably why law enforcement never followed up on it. Yet the Tennessee faithful didn’t hesitate to light up social media and sully Schiano’s reputation, killing his chances of coaching the Volunteers. So much for due process. Currie was quickly fired for failing to conduct sufficient due diligence on Schiano.
Two other clauses in the MOU are relevant here. Although Currie and Schiano signed the MOU, there are signature lines for UT Chancellor Beverly Davenport and CFO David Miller, which were blank. The University says their bylaws and “contract policy” require those signatures in order to make the MOU binding. However, the last sentence of the MOU reads, “until such time that the Employment Agreement is executed, this MOU shall constitute a binding employment contract between the parties.” Does saying a document is a contract make it a contract? And if UT had required the additional signatures in order for the MOU to be binding, shouldn’t it have said “when fully executed… this MOU shall constitute a binding employment contract between the parties?”
If Schiano’s attorneys can overcome the lack of signatures, the damages to their client are clear. Paragraph 4 of the MOU states Tennessee may, in its sole discretion, terminate the MOU “without cause.” If the University takes such action, it must pay Schiano 75% of the base pay set forth in the document. If you’re counting, that’s $20.625 million. It’s unlikely Schiano will receive the entire amount without bringing legal action, although you can be sure representatives of the parties are currently engaged in settlement talks that will result in Schiano being paid a significant sum.
In addition to breach of contract, Schiano could sue for defamation, although as a public figure he has a high bar to overcome. Clearly his reputation and brand have been negatively impacted. However, Schiano knows bringing a lawsuit against Tennessee could be detrimental to his chances of obtaining a head coaching job in the future. Schools are likely to view him as litigious, not a reputation that is likely to endear him to a future employer. Furthermore, a lawsuit would require Schiano to testify under oath about what he saw and knew of Sandusky’s activities, opening up a can of worms even further. There’s no upside in that.
The University has much to lose in a lawsuit as well. Having bungled the potential hire of Schiano, it appears to be incompetent in the negotiating arena. Lingering litigation will only serve to emphasize that point. In addition, the public perception of Tennessee’s treatment of Schiano is less than favorable, regardless of what he may or may not have done in the past. Better to move on, even if it costs a pretty penny to do so.
Did Schiano see something 25 years ago that he should have reported? Perhaps. But whether he did or not, his trial and conviction by social media will likely cost UT dearly.
The author is a former attorney, CPA, Minor League Baseball team owner and current investor in MiLB teams. He is a Professor in and Chair of the Sport Management Department at SUNY Cortland and maintains the blog: http://sportsbeyondthelines.com. The opinions contained in this column are the author’s. Jordan can be reached at email@example.com.