Mark Stoops "buyout

[Big John Stud]

Mark Stoops "buyout" is just his guaranteed salary. There is no lump sum due to him to buy him out of his contract, he is just guaranteed the full term of his contract if fired without cause. He would have 3 years left at 12 million bucks or about 4 million a year due in equal monthly payments. He is due $3.75 million in 2017, $4 million in $2018, and $4.25 million in 2019. That averages out to be $333,333.33 a month. So whether he gets fired or not he will be paid the same from UK, about $4 million a year due in equal monthly payments.

The only exception is if he's fired after Dec 1, 2017 then will get 80% of his salary for the last 2 years. If he is fired after Nov 30, 2018, he will get 60% of his salary for the last year.

 

[TBCat]

That last paragraph you wrote is the most important part. I've been trying to high light that for some time now. The contract was so bad and such a major league screw up that you have no choice but to ignore the buy out completely. You have to fire him even if the number is 100 million. That money is just gone now. There's no saving it. Too many people discussing this subject still don't seem to understand that. He gets 80% regardless. So the choice is fire him now and pay $12 million or fire him in two years and pay $10 million. Also you would have to keep in on staff for that two years and pay his salary the full amount plus other incentives such as paying for what ever other benefits he has such as his radio show. Are you really saving your self any money doing that? At best you save 2 million stretched over 4 years and you will lose about 10 times that in lost revenue. There is no benefit at all in waiting. You will only dig the following coach a much deeper hole.

 

[Los Gatos]

That last paragraph you wrote is the most important part. I've been trying to high light that for some time now. The contract was so bad and such a major league screw up that you have no choice but to ignore the buy out completely. You have to fire him even if the number is 100 million. That money is just gone now. There's no saving it. Too many people discussing this subject still don't seem to understand that. He gets 80% regardless. So the choice is fire him now and pay $12 million or fire him in two years and pay $10 million. Also you would have to keep in on staff for that two years and pay his salary the full amount plus other incentives such as paying for what ever other benefits he has such as his radio show. Are you really saving your self any money doing that? At best you save 2 million stretched over 4 years and you will lose about 10 times that in lost revenue. There is no benefit at all in waiting. You will only dig the following coach a much deeper hole.

Well, except if you fire him now you not only have to pay him the 12M but also have to pay his replacement. So, if you looks at the total money paid to the head coach it does go up. Not by the 12M but by the amount you pay his replacement.

 

[olblue]

That last paragraph you wrote is the most important part. I've been trying to high light that for some time now. The contract was so bad and such a major league screw up that you have no choice but to ignore the buy out completely. You have to fire him even if the number is 100 million. That money is just gone now. There's no saving it. Too many people discussing this subject still don't seem to understand that. He gets 80% regardless. So the choice is fire him now and pay $12 million or fire him in two years and pay $10 million. Also you would have to keep in on staff for that two years and pay his salary the full amount plus other incentives such as paying for what ever other benefits he has such as his radio show. Are you really saving your self any money doing that? At best you save 2 million stretched over 4 years and you will lose about 10 times that in lost revenue. There is no benefit at all in waiting. You will only dig the following coach a much deeper hole.

I ran into a guy recently who knows a thing or two about coaches' contracts. I asked him if the buyout was as big as deterrent as some are making it out to be. He kind of shook his head, rolled his eyes and said "no". While you never want to take a loss, sometimes you have to. And with the extra revenue that SEC schools have now as result of the Network, it makes it easier than in times past.

 

[arobapr]

yea you have to pay him the same money regardless but like the above poster said if you keep him around you don't have to pay another coach 4 million a year . if they fire him now they will be spending 8 million a year on a head coach the next 3 years. that is probably as much or more than what saban and meyer make.

 

[dorkmeister]

The thing is, where will we be in 2 more years? Between recruiting classes falling apart and transfers we will be bottom of SEC again and preseason ranking of mid 80s. After that, it is a total rebuild again.

We lose 12M now or 20M over 2 more years.....your call

 

[Big John Stud]

yea you have to pay him the same money regardless but like the above poster said if you keep him around you don't have to pay another coach 4 million a year . if they fire him now they will be spending 8 million a year on a head coach the next 3 years. that is probably as much or more than what saban and meyer make.

Or our basketball coach.

 

[olblue]

yea you have to pay him the same money regardless but like the above poster said if you keep him around you don't have to pay another coach 4 million a year . if they fire him now they will be spending 8 million a year on a head coach the next 3 years. that is probably as much or more than what saban and meyer make.

Saban is at $7MM and Urban is at $6.5MM - so a $1.5MM delta. UK will lose that much in hot brown nacho sales if they keep the current staff another year.

 

[redbudman]

Or our basketball coach.

How much does NIKE make up of the $7.75 that CAL will make this year! I realize it is off the topic but when Keyser mentioned our coach, I was just wandering if anyone knew! And how much figures in Stoops contract! Does $ just go straight into athletic fund!

 

[The_Godfather_rivals]

It's a pretty simple concept.

It's a lot easier to justify paying a buyout than it is to justify continuing to pay a man to further damage the football program.

 

[KentuckyStout]

This gives me a glimmer of hope that Stoops may actually be fired at the end of the season.

It is a hope that I will cling to until you pry it from my cold, dead hands.

 

[Nuke99m.]

If you added $10 per game per season ticket,( be up front and tell me it's for Stoops buyout) over an 8 game season if you sold 45,000 season tickets, you would make 3.6 million a year extra. I'd be willing to pay $80 extra per season "IF" they got a good coach.

Kind of a "go fund me" for UK fans

 

[TBCat]

Well, except if you fire him now you not only have to pay him the 12M but also have to pay his replacement. So, if you looks at the total money paid to the head coach it does go up. Not by the 12M but by the amount you pay his replacement.

Again that's a cost you have to pay anyway. There is no way to save that cost either. There are only two options here. One is if Stoops works out in which case everything is fine. The other option is that you have to replace him at some point. In the second case you have to pay Stoops 12 million then pay his assistants and then pay the new coach. All of those expense occur the same whether you do it now or in 4 years. There really isn't a way to avoid any of those costs. Even if you wait until the final year of Stoops contract you still have to pay 60% of 4 million. That would be almost 3 million on top of paying 100% up to that point. So even if we wait until the final year of his deal you only spare yourself 1.5 million. There really is no incentive to wait. Either Stoops wins or he's gone.

 

[JHB4UK]

So you people are perfectly happy with the same man who hired Stoops & who negotiated that contract getting to now decide to buy him off & then make yet another hire & negotiate yet another multi million dollar multi year contract. not looking for blame & demanding changes above the head coach's desk is why our program has been & continues to be in the shape we are cursed with.

no thanks, he ain't gonna suddenly become smart in hiring a coach & in laying out the parameters for building a winning SEC program. rather have Stoops keep coaching that Barnhart do anymore hiring/contract writing.

 

[J. Shellacque]

Who were the lawyers that helped Mitch put this Stoops contract together? Was it another "one man search team" type thing, like when he hired Gillispie? The bottom line is that Mitch Barnhart made yet another colossal mistake. This guy seems to get more passes than North Carolina.

 

[USMC Cat_rivals309254]

Again that's a cost you have to pay anyway. There is no way to save that cost either. There are only two options here. One is if Stoops works out in which case everything is fine. The other option is that you have to replace him at some point. In the second case you have to pay Stoops 12 million then pay his assistants and then pay the new coach. All of those expense occur the same whether you do it now or in 4 years. There really isn't a way to avoid any of those costs. Even if you wait until the final year of Stoops contract you still have to pay 60% of 4 million. That would be almost 3 million on top of paying 100% up to that point. So even if we wait until the final year of his deal you only spare yourself 1.5 million. There really is no incentive to wait. Either Stoops wins or he's gone.

No, they don't.

Year 1
Pay Stoops or
Pay Stoops + A new coach

You're paying Stoops regardless, but the expenses don't 'occur the same' at all.

 

[K_TIME]

The thing is, where will we be in 2 more years? Between recruiting classes falling apart and transfers we will be bottom of SEC again and preseason ranking of mid 80s. After that, it is a total rebuild again.

We lose 12M now or 20M over 2 more years.....your call

This is the part of the decision that leans toward no way you keep Stoops if we throw up a 2-10 season.

1. By the time the next coach gets here..>Boom, Juice, Westry, etc.. will be gone (I think Boom leaves this year anyway is my gut).
2. Do you really think JaVonte Richardson, Tyrell Ajain, Alex King, Quinton Bohanna, Phil Hoskins, etc..are going to stick with Stoops knowing he's on a red hot seat and teams are going to vulture these guys away regardless.
3. When you start stockpiling weaker classes together year over year (the class 2 years that fell apart ended up on 50's)...then you're back to the talent level we had when Joker left which was really poor IMO.

I don't think if we win 4 games it's a harder call...but we throw up 2 or 3 wins...you almost can't bring Stoops back as the talent is going to really go back to days of competing against Toledo, Ball St, UAB, etc..for kids.

 

[Big John Stud]

If I see $18 million buyout one more time as if its a lump payment or actually $18 million...

 

[Mojocat_rivals48469]

He gets 80% regardless. So the choice is fire him now and pay $12 million or fire him in two years and pay $10 million.

Your point is a good one, but I think your math is off. If we wait until 12/17 to fire him, CMS gets 80% of his last 2 years' salary, which is 4 million and 4.25 million if the OP is right. 80% of 8.25 million is $6.6 million. So it's either 12 million now or 6.6 in 2 years. If I'm thinking right......

 

[MrLair]

Or our basketball coach.

Pathetic. Leave Cal outta this.

 

[Mojocat_rivals48469]

Once it's become clear someone isn't right for a job, the rational thing to do is cut losses and move on. Second, as everyone says, empty stadiums cost more long term than the up front financial hit.

OTOH, as JBH keeps saying, if the guy doing the screening, selecting and hiring is the same guy that did the hiring before......

I was a long time Barnhart defender. Can't do it anymore. Was going to write a long post about that but, meh, who cares. I just don't have any faith he can find and hire the right guy....

 

[PhattyJ4UK_rivals309166]

Does any of the buyout get negated if stoops gets another job?

 

[kyjohn]

yea you have to pay him the same money regardless but like the above poster said if you keep him around you don't have to pay another coach 4 million a year . if they fire him now they will be spending 8 million a year on a head coach the next 3 years. that is probably as much or more than what saban and meyer make.

Bottom of the SEC again? Sadly UK is at the bottom now.With the defense they have,unless drastic improvement is made on that side of the ball UK may not win one SEC game this year.We will find out this Saturday against the "Cocks."

 

[MrLair]

Anyway we don't have to pay that stupid buyout if the dumbass that wrote it up is fired too?

 

[ville 77]

Mark Stoops "buyout" is just his guaranteed salary. There is no lump sum due to him to buy him out of his contract, he is just guaranteed the full term of his contract if fired without cause. He would have 3 years left at 12 million bucks or about 4 million a year due in equal monthly payments. He is due $3.75 million in 2017, $4 million in $2018, and $4.25 million in 2019. That averages out to be $333,333.33 a month. So whether he gets fired or not he will be paid the same from UK, about $4 million a year due in equal monthly payments.

The only exception is if he's fired after Dec 1, 2017 then will get 80% of his salary for the last 2 years. If he is fired after Nov 30, 2018, he will get 60% of his salary for the last year.

Actually last week it was reported that the buyout for Stoops and his staff at the end of the season would be 23 mil. Much more than what you are talking about. If they are worng and your number is correct you still will have at least 3-4 mil in staff buy outs. The guys hired last year were given 3 year deals.

 

[Deeeefense]

It always cost money when you fire a coach, it's just that if we do it after this season it will be a bit more than normal - we can't do anything about that now. But the question is, if we wind up with say a 3 win season and recurring starts regressing, what plans do they have with that money that's more important than keeping this program from falling into an abyss that will be much more difficult for a new staff to work their way out of?

Look at it this way, we spent nearly $200 Million on making this a first class program, why cheap out over spending a few million more to get the right leader?

 

[Big John Stud]

Actually last week it was reported that the buyout for Stoops and his staff at the end of the season would be 23 mil. Much more than what you are talking about. If they are worng and your number is correct you still will have at least 3-4 mil in staff buy outs. The guys hired last year were given 3 year deals.

Well I took 30 seconds and googled his contract and read it with my own eyes. It is $12 million paid in equal monthly payments thru the life of the contract if he's fired without cause. The $23 million figure is laughable. The staff only gets paid if they don't get other jobs which almost all of them will. In that case UK is only responsible for the difference if they were scheduled to make more at UK than they make at their new job.

 

[Big John Stud]

Anyway we don't have to pay that stupid buyout if the dumbass that wrote it up is fired too?

Umm, we have to pay that buyout unless he's fired for cause. What are you even talking about?

 

[CB3UK]

If you added $10 per game per season ticket,( be up front and tell me it's for Stoops buyout) over an 8 game season if you sold 45,000 season tickets, you would make 3.6 million a year extra. I'd be willing to pay $80 extra per season "IF" they got a good coach.

Kind of a "go fund me" for UK fans

I hear you, but we've overpaid more than our fair share over the years. Barnhart is the one who screwed up royally and he should be the one footing the bill if he wants to show he has the same integrity he places such high value on his hires having.

 

[Dore95]

I'm an employment lawyer and write contracts for employers for a living (although not for sports teams). My advice to my clients (always employers) is to avoid a situation where it is economically difficult/impossible to fire an underperforming executive.

As the OP said, there is no "buyout" or "early termination" provision applicable to terminations that occur before the end of the 2017 season. And, there is no provision allowing the university to "set off" any amounts Stoops might earn from a subsequent employer against what he's owed from UK. It does seem very strange to me that UK is in this position. There should always be a way to get out of the contract for less than the full contract price, and there appears to be no such way here.

 

[bthaunert]

Who were the lawyers that helped Mitch put this Stoops contract together? Was it another "one man search team" type thing, like when he hired Gillispie? The bottom line is that Mitch Barnhart made yet another colossal mistake. This guy seems to get more passes than North Carolina.

A search firm was hired by Mitch for the BCG hire. I still don't mind the hire of Stoops (Tim Couch played a large role in it and was 100% in on Stoops), but the extension and buyout are 100% inexcusable.

 

[AllBall]

That last paragraph you wrote is the most important part. I've been trying to high light that for some time now. The contract was so bad and such a major league screw up that you have no choice but to ignore the buy out completely. You have to fire him even if the number is 100 million. That money is just gone now. There's no saving it. Too many people discussing this subject still don't seem to understand that. He gets 80% regardless. So the choice is fire him now and pay $12 million or fire him in two years and pay $10 million. Also you would have to keep in on staff for that two years and pay his salary the full amount plus other incentives such as paying for what ever other benefits he has such as his radio show. Are you really saving your self any money doing that? At best you save 2 million stretched over 4 years and you will lose about 10 times that in lost revenue. There is no benefit at all in waiting. You will only dig the following coach a much deeper hole.

Just fire Barnhart as well and have Peevy become intern AD until we get things lined out. After that time, pay him what he's due.

 

[JHB4UK]

It does seem very strange to me that UK is in this position. There should always be a way to get out of the contract for less than the full contract price, and there appears to be no such way here.

yes, their should. those who constructed this contract did not see any reason to include such termination provisions & made the whole thing guaranteed. So very foolish.

but who is surprised a stupid contract was written & signed? the same AD hired a basketball coach and frigging failed to get him to even SIGN his contract. FOR TWO YEARS!!! And yet some of you people want to fix UK football by just firing the coach & allowing the same AD to hire another coach & sign another contract in the tens of millions.

SMH

 

[TBCat]

Once it's become clear someone isn't right for a job, the rational thing to do is cut losses and move on. Second, as everyone says, empty stadiums cost more long term than the up front financial hit.

OTOH, as JBH keeps saying, if the guy doing the screening, selecting and hiring is the same guy that did the hiring before......

I was a long time Barnhart defender. Can't do it anymore. Was going to write a long post about that but, meh, who cares. I just don't have any faith he can find and hire the right guy....

Are you adding the salary he gets paid until that point. I'm sure it's way more than 6 million in 2 years. He'll make more than that before we fire him. If he gets 80% of the final 2 years which would be 8 million if we don't fire him then essentially what we are saying is that we are only saving ourselves 2 million. So he would still get 10 million total of the 12. Remember you still have to add the salary he gets up to those final 2 years because he gets 100% of that until the final two years. Waiting 2 years only saves you 20% of the final 8 million.

 

[Mojocat_rivals48469]

Are you adding the salary he gets paid until that point. I'm sure it's way more than 6 million in 2 years. He'll make more than that before we fire him. If he gets 80% of the final 2 years which would be 8 million if we don't fire him then essentially what we are saying is that we are only saving ourselves 2 million. So he would still get 10 million total of the 12. Remember you still have to add the salary he gets up to those final 2 years because he gets 100% of that until the final two years. Waiting 2 years only saves you 20% of the final 8 million.

you're right, of course. I was thinking narrowly of only the size of the check you'd write at the firing (but, as Keyser says, it's not going to be a lump sum payment anyway). You have to add to the 6.6 the salary he'll get paid between now and then to get a true number. what can I say, it was late. you're right, I'm wrong, a blind man could tell you that.

 

[Mojocat_rivals48469]

I'm an employment lawyer and write contracts for employers for a living (although not for sports teams). My advice to my clients (always employers) is to avoid a situation where it is economically difficult/impossible to fire an underperforming executive.

As the OP said, there is no "buyout" or "early termination" provision applicable to terminations that occur before the end of the 2017 season. And, there is no provision allowing the university to "set off" any amounts Stoops might earn from a subsequent employer against what he's owed from UK. It does seem very strange to me that UK is in this position. There should always be a way to get out of the contract for less than the full contract price, and there appears to be no such way here.

Barnhart's whole philosophy - it seems - is to go way overboard to make the coach feel wanted. So, no buyout on his side if he leaves early ("we don't want a guy if he's only staying because he can't pay the fee to leave") and, in other unusual ways, the contract goes in the coaches favor. I think that's all in the name of creating goodwill, so if we have the right guy, he might actually want to stay here instead of taking whatever high profile job is open.

Problem is, if you don't have the right guy - and we haven't to date - it's an approach that makes no sense.

 

[kyjohn]

Barnhart's whole philosophy - it seems - is to go way overboard to make the coach feel wanted. So, no buyout on his side if he leaves early ("we don't want a guy if he's only staying because he can't pay the fee to leave") and, in other unusual ways, the contract goes in the coaches favor. I think that's all in the name of creating goodwill, so if we have the right guy, he might actually want to stay here instead of taking whatever high profile job is open.

Problem is, if you don't have the right guy - and we haven't to date - it's an approach that makes no sense.

UK definitely has the wrong guy and with the contract he was given has zero incentive to improve his abysmal team.

 

[WildCard]

FWIW, this is how I understand his contract and buyout...

2014 - 2016 years are paid and a moot point to the buyout. That leaves the following years and contracted compensation

2017: $3.75M
2018: $4.00M
2019: $4.25M

That is $12M remaining under contract after this year and $8.25M remaining after next year.

If terminated before 1/12/17 (i.e., after this season) he gets 100% of remaining compensation, i.e.,all $12M

If terminated between 12/1/17 and 11/30/18 (i.e., after 2017 season) he gets 80% of remaining compensation, i.e., 80% of $8.25M or $6.6M.

Since paid salaries are a "sunk" cost that looks to me like there is a $5.4M difference in actual termination cost between end of this season versus end of next season. Is it "worth" it? I don't know and I don't have to make the decision.

Probably the best metric in determining is it (financially) worth it the potential impact on season ticket sales. Next year is a 7 home game season. Assuming a $315 season ticket cost another 6,000 ticket decline (would it be that bad???) is ~$1.9M in direct ticket revenue.

Peace

NOTE: Above contract information was extracted from this source and not the actual contract (did not pop up immediately on a Google search). I read the contract a while back and this was my interpretation at that time as well. I assume any terminations would occur NLT immediately following the end of a season.

 

[Big John Stud]

FWIW, this is how I understand his contract and buyout...

2014 - 2016 years are paid and a moot point to the buyout. That leaves the following years and contracted compensation

2017: $3.75M
2018: $4.00M
2019: $4.25M

That is $12M remaining under contract after this year and $8.25M remaining after next year.

If terminated before 1/12/17 (i.e., after this season) he gets 100% of remaining compensation, i.e.,all $12M

If terminated between 12/1/17 and 11/30/18 (i.e., after 2017 season) he gets 80% of remaining compensation, i.e., 80% of $8.25M or $6.6M.

Since paid salaries are a "sunk" cost that looks to me like there is a $5.4M difference in actual termination cost between end of this season versus end of next season. Is it "worth" it? I don't know and I don't have to make the decision.

Probably the best metric in determining is it (financially) worth it the potential impact on season ticket sales. Next year is a 7 home game season. Assuming a $315 season ticket cost another 6,000 ticket decline (would it be that bad???) is ~$1.9M in direct ticket revenue.

Peace

NOTE: Above contract information was extracted from this source and not the actual contract (did not pop up immediately on a Google search). I read the contract a while back and this was my interpretation at that time as well. I assume any terminations would occur NLT immediately following the end of a season.

How hard is it to look at the actual contract? Google Mark Stoops contract and the is a PDF of the contract is linked on the LHL story and every UK's coach's contract is available on UK athletics website. Stoops literally has no buyout, none. There is no penalty to be paid to buy him out of his contract. He is just guaranteed his contract unless he's fired for cause. The causes he can be fired for are listed in the contract and no, being terrible is not a cause. He will get the remainder of his contract in equal monthly payments, period. It takes like 30 seconds to look it up, his compensation if fired is listed in section 8a if you're curious.

 

[TBCat]

FWIW, this is how I understand his contract and buyout...

2014 - 2016 years are paid and a moot point to the buyout. That leaves the following years and contracted compensation

2017: $3.75M
2018: $4.00M
2019: $4.25M

That is $12M remaining under contract after this year and $8.25M remaining after next year.

If terminated before 1/12/17 (i.e., after this season) he gets 100% of remaining compensation, i.e.,all $12M

If terminated between 12/1/17 and 11/30/18 (i.e., after 2017 season) he gets 80% of remaining compensation, i.e., 80% of $8.25M or $6.6M.

Since paid salaries are a "sunk" cost that looks to me like there is a $5.4M difference in actual termination cost between end of this season versus end of next season. Is it "worth" it? I don't know and I don't have to make the decision.

Probably the best metric in determining is it (financially) worth it the potential impact on season ticket sales. Next year is a 7 home game season. Assuming a $315 season ticket cost another 6,000 ticket decline (would it be that bad???) is ~$1.9M in direct ticket revenue.

Peace

NOTE: Above contract information was extracted from this source and not the actual contract (did not pop up immediately on a Google search). I read the contract a while back and this was my interpretation at that time as well. I assume any terminations would occur NLT immediately following the end of a season.

Still not sure how you are coming up with $5.4 million as the difference. He gets %100 of the next two years either way. As I read it what's at stake is $8.25 million of which he gets %80 of. So the difference between terminating him now and terminating him in 2 years is about 1.6 million. Of course in all fairness you have to factor in the new coach and his staff but both costs are on a per year basis instead of a lump sum.

Again I'm not suggesting that this is not a lot of money. It certainly is. I'm just not sold on it being a deterrent.