The University of Arizona athletic department announced some troubling news last month in Tucson.
Because of the COVID-19 pandemic, the Wildcats said they faced $45 million in losses and were forced to make job cuts, including 21 layoffs.
Athletic director Dave Heeke called it “a difficult day of very tough decisions.”
“These challenging economic times have affected all of us,” Heeke said then.
Less than six weeks later, the Wildcats didn’t seem quite as broke. After his football team lost its 12th consecutive game dating to 2019, Heeke fired coach Kevin Sumlin and put Arizona on the hook to pay Sumlin $7.3 million to buy out his contract, half of which is due to Sumlin within 30 days of his termination.
This is part of a surprising trend in recent days. Despite claiming financial trouble during the pandemic, several major college football programs found the huge sums of money necessary to fire coaches for not winning enough games during a truncated season filled with disruption.
Schools in the Football Bowl Subdivision (FBS) already are on the hook for as much as $75 million in contract buyout costs after firing eight head coaches this season and putting dozens of their assistant coaches in limbo, according to a USA TODAY Sports estimate. That includes $21 million to fire coach Gus Malzahn at Auburn and $15 million to fire Will Muschamp at South Carolina.
Coach Gus Malzahn is owed $21 million after Auburn fired him. (Photo: Mickey Welsh, USA TODAY Sports)
This kind of spending, at this time, for this reason, has elicited criticism and some astonishment from those who monitor and work in college sports.
“We were certain there would be a limited number of changes, and they would come with retirements or guys going to the NFL, but we really didn’t anticipate people would pay multimillion-dollar buyouts in this environment,” said Todd Turner, president of Collegiate Sports Associates, which assists colleges in coaching searches.
It was supposed to be a mulligan year for coaches, according to this theory. Because it was a short, troubled season and because schools were supposed to be strapped for cash, the expectation was schools would give losing coaches a pass this year instead of paying them so much not to coach.
That has not been the case.
Auburn fired Malzahn after eight seasons and a record of 68-34, including 6-4 this season. He is owed $21 million for the school breaking his contract, half of which is due to him in 30 days and the rest payable over four years. In November, a university official said at a board of trustees meeting that athletic revenues were down $62 million. In July, Auburn athletic director Allen Greene issued a letter to season-ticket holders saying “we are evaluating every expense” in response to the impact of the pandemic.
“Your contributions will help Auburn weather this crisis,” he stated. Auburn didn’t immediately respond with a comment when asked about the situation.
South Carolina owed Muschamp $15 million after firing him last month, when his record after four-plus years was 28-30. In September, athletic director Ray Tanner reported the Gamecocks were facing a $58 million revenue shortfall. His department has taken pay cuts, furloughs and other measures to reduce expenses. In June, university president Bob Caslen also issued a dire message to faculty and staff.
“The budget outlook before us is more serious than any the university has faced since the Great Recession, and the loss of revenue next fiscal year could surpass the recession in terms of a single year impact,” Caslen said. “It will require a new level of creativity and shared sacrifice from our entire campus community.”
South Carolina didn’t immediately respond to a request for comment.
Illinois owed fired coach Lovie Smith $2.5 million after he went 17-39 in five seasons. In August, athletic director Josh Whitman addressed financial challenges his department faced, which included more than $300 million in debt, at least 15 job cuts and at tens of millions in lost revenue. “I think we only have so many levers to pull,” he told reporters then. Illinois said the buyout will be absorbed in the operations budget for fiscal year 2021 and any shortfall at the end of it will have to be made up over time.
Arizona fired Sumlin after he went 9-20 in three seasons. Asked how his buyout costs square with the financial challenges there, Arizona athletics referred USA TODAY Sports to a statement that said the university will honor Sumlin’s contract “including all buyout provisions, with funding from athletics-generated revenue and sources.”
Arizona fired coach Kevin Sumlin and must pay him more than $7 million despite the school facing tough financial problems. (Photo: Joe Camporeale, USA TODAY Sports)
Some of the buyout money owed to fired coaches can be spread out over time. It also can be reduced if these fired coaches get new jobs and use their new pay to mitigate the buyout pay from their previous employers. But that is not always required and often is just a small fraction of what the coach will be owed by his firing school. In Malzahn’s case, Auburn owes him that full amount regardless if he gets a new job.
Even if they're partially reduced, such buyouts still add up to a huge and questionable expense, demonstrating why the Knight Commission on Intercollegiate Athletics recently advocated a breakup between FBS football programs and the NCAA. The independent group pushes for reforms that strengthen the educational mission of college sports.
“The unseemly spectacle of colleges paying excessive buyouts to football coaches at a time of significant cuts and dwindling revenue erodes public trust in college athletics and is a good example of why the Knight Commission has recommended separating FBS football from the NCAA,” said Nancy Zimpher, incoming co-chair of the Knight Commission and chancellor emeritus of the State University of New York. “The first necessary step of getting a grip on spending is to fix the dysfunctional governance of college sports, including the fragmented governance of FBS football. Once that happens, a new, fully accountable FBS football organization can explore solutions to control spending.”
Turner, the search executive, previously served as athletic director at several schools, including Washington and Vanderbilt. He said athletic directors are looking “past the pandemic and how we’re going to recover from this,” with football still the primary driver of that.
That means getting fans and alumni excited about a new coach after the current one fell short.
In Arizona’s case, Sumlin at Arizona got canned after a 70-7 loss against rival Arizona State.
Even if this season deserves an asterisk, school presidents and athletic directors are still hearing complaints from alumni and donors if their team loses like that and doesn’t win enough.
“They could never make a commitment that it was a mulligan year, because the alumni never were going to treat it that way,” said David Berri, a sports economist at Southern Utah. “If you’re going to play the game, there were going to be losers and whoever lost was going to lose their job.”
So then how are they paying for it?
“It’s the big cigar guys with big dollars who are willing to spend it, because it suits them and because they can,” Turner said of donors. “Universities get held hostage over that, and it just takes courage on the part of presidents and other leaders in higher ed to say that’s inappropriate.”
Berri notes that the big universities have billions of dollars and that these severance packages are nothing in comparison. At Auburn, the university system had a proposed budget of $1.4 billion for 2019-20.
He also said athletic directors deal with problems as they come and prioritize according to what their constituency considers to be important.
“You didn’t have ($7 million) last month” to save those jobs, Berri said. “Yeah, that was a different problem on a different day. This is a new problem on a new day. My problem today is people are yelling at me (about firing the coach). It turns out I have ($7 million) to spend on that problem.”
Public pressure plays a big role. And football has a much bigger constituency than the athletic department staff members who lost jobs or suffered pay cuts.
“If the president would have gotten calls from hundreds of people about those 15 furloughed positions," Berri said, "then it wouldn’t have happened.”
Contributing: Steve Berkowitz
Follow reporter Brent Schrotenboer @Schrotenboer. E-mail: [email protected]
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