Economics of Buyouts

[Rex54]

I don't understand the economics of buyouts. The leverage should all be on the schools side right? Unless you're going after a Meyer, Saban, elite guy.

But for a Moorhead type hire or most hires in college football shouldn't the convo be:

"Buddy were about to make you rich enough that your family will never be for want. Take this offer of 3M a year with a 1M buyout or go kick rocks at your 900K current salary. If you succeed you won't ever have to worry about anything. If you go 0-12 year 1 you're now 4M dollars richer"

[shannondawg]

I've thought that all along, I have thought at times, the hugh buyout clauses for untested head coaches was an ego thing for the school.

We pay you 3 mil which is 2.1 mil a year more than you making now, if you do good job we continue and possible raises, if you **** it up, we fire your ass. Its all up to you.

[Cowbell]

I started a thread about this a few weeks ago. It makes absolutely no sense to me. Especially with a guy like Morehead. It's crazy that a guy can put your school on probation and have a losing season and you have to buy him out at almost full value of his yearly contract

[msbulldog]

2 causes: Good Agent/Inexperienced AD.

[the_real_MSU_is_us]

I 100% agree. I get big buyouts for an established coach like Mullen who has options... Joe cant get a P5 job if his life depended on it, so why does he get a big buyout? Same with Matt Luke- they paid him double what he would have taken and gave him a decent buyout for no reason. Same thing at SC- absolutely nobody was wanting to poach Muschamp but they gave him like a 12M buyout and couldnt fire him this year.

I also made a thread about this and I still dont get it. All I hear is "big buyouts show commitment to the coach and make recruits feel like that coach will be there a while, thus it helps with recruiting". BUT, 1) recruits comit to lane duck coaches all the time. For example 95+% of our fanbase expects Joe to be gone next year and we still got 100% of our commits to sign early. 2) recruits see schools pay huge buyouts all the time so how much security do they really feel like it gives? 3) every recruit knows they need to look 4-5 years down the road, and no matter how good a coach looks now or how big the buyout is anything can happen by then. 2 bad years in a row and the coach is gone from any SEC school not named Vandy. So I just dont buy they big buyouts help with recruiting much at all.

But then again, I cant believe that every AD in the country is an idiot who throws money at HCs when they dont have too so there must be something I'm missing

And I also agree that we should be able to say, tell Grantham "we aren't sure about making you the full time HC, but were willing to let you be the interim for a year at 2.5M woth a 1M buyout if we dont make you the full time HC. You bring your own offensive staff and can hire the LB coach, but we feel good about the rest of the defensive staff. Win 8 games and well make you the full time HC. Win 7 and were not sure. Do bad and at least you've gotten 3 years of DC level money and can still get a DC job elsewhere".

Can anybody tell me Grantham would say no?

[Dawgology]

2 causes: Good Agent/Inexperienced AD.

This plus it’s AD’s trying to create an image for themselves and the school. Additionally, it’s the current market. All colleges would have to stop doing it but they won’t so it will continue.

[ckDOG]

Seems to me like we hear Jimmy Sexton thrown around ALL THE TIME. My guess is that him and a small handful of other agents are controlling a massive portion of the coaching talent. So really, we aren't negotiating with a coach that is one of many. We are negotiating with a coach that is one of a few via a small population of representation. And that drives up salaries and buyout terms drastically.

[Maroonthirteen]

I'm no attorney but I'm sure it is business/contract law 101.

There isn't a "buyout" payment. There is a contract that you sign with a coach. 4years $3MM. Then when he is fired people call the remainder of his contract a "buyout".

Or if you are saying schools should draw up the contract to say, "we will pay you $xMM but if you meet performance standards. If you don't meet the standards, we owe you nothing". I'm not sure State contract laws would allow that. I don't know though. Just guessing.

[TheLostDawg]

I 100% agree. I get big buyouts for an established coach like Mullen who has options... Joe cant get a P5 job if his life depended on it, so why does he get a big buyout? Same with Matt Luke- they paid him double what he would have taken and gave him a decent buyout for no reason. Same thing at SC- absolutely nobody was wanting to poach Muschamp but they gave him like a 12M buyout and couldnt fire him this year.

I also made a thread about this and I still dont get it. All I hear is "big buyouts show commitment to the coach and make recruits feel like that coach will be there a while, thus it helps with recruiting". BUT, 1) recruits comit to lane duck coaches all the time. For example 95+% of our fanbase expects Joe to be gone next year and we still got 100% of our commits to sign early. 2) recruits see schools pay huge buyouts all the time so how much security do they really feel like it gives? 3) every recruit knows they need to look 4-5 years down the road, and no matter how good a coach looks now or how big the buyout is anything can happen by then. 2 bad years in a row and the coach is gone from any SEC school not named Vandy. So I just dont buy they big buyouts help with recruiting much at all.

But then again, I cant believe that every AD in the country is an idiot who throws money at HCs when they dont have too so there must be something I'm missing

And I also agree that we should be able to say, tell Grantham "we aren't sure about making you the full time HC, but were willing to let you be the interim for a year at 2.5M woth a 1M buyout if we dont make you the full time HC. You bring your own offensive staff and can hire the LB coach, but we feel good about the rest of the defensive staff. Win 8 games and well make you the full time HC. Win 7 and were not sure. Do bad and at least you've gotten 3 years of DC level money and can still get a DC job elsewhere".

Can anybody tell me Grantham would say no?

I think that we may be looking for an AD in a year or two if you're interested

[Lord McBuckethead]

Couldn't we just fire him for tutorgate?

[HoopsDawg]

I've heard Cohen and tons of message board posters say you had to extend him after last season for recruiting purposes. I totally disagreed at the time, and I still disagree. Moorhead should not have been given an extension after last season. Our recruiting class would have been the exact same.

[HoopsDawg]

Couldn't we just fire him for tutorgate?

nah, he could sue us for wrongful termination by showing it was the administration's fault, not his.

[Maroonthirteen]

I've heard Cohen and tons of message board posters say you had to extend him after last season for recruiting purposes. I totally disagreed at the time, and I still disagree. Moorhead should not have been given an extension after last season. Our recruiting class would have been the exact same.

Yeah In this day and age of 24/7 instant information, everyone knows which coach is on the hotseat and which isn't. Regardless of years remaining on a contract. I don't get extending him.