Tanner working to negotiate Muschamp’s buyout. One factor puts him in a bad spot
When he first spoke publicly after Will Muschamp’s firing, Gamecocks athletic director Ray Tanner mentioned the process of negotiating an arrangement for the coach’s lengthy buyout.
The most recent contract available calls for the coach to be paid out for 75% of his salary for the rest of the deal, which runs through the end of 2024. Tanner on Monday said he’s started the process of negotiating.
“This hasn’t been a situation where I’ve involved our board leadership or chairman of the board, and President (Bob) Caslen,” Tanner said. “But I’ve started to have some conversations, without that yet, without those entities being involved because I don’t think we’re at a point that I have something to bring to them. So those conversations will be occurring — but otherwise, you guys know what the contract is.”
That contract points to one issue that will likely make Tanner’s negotiations harder with the school set to owe Muschamp more than $13 million across four years.
Tanner has spoken about “mitigation” as a standard part of the school’s contracts. It was mentioned when several reporters spoke to him about Muschamp’s buyout after a late-season loss in 2019.
Mitigation means that when a coach takes a new job, his new salary is subtracted comes from the former school’s buyout payment. It’s intended to discourage a coach from double-dipping with income from previous and current employers, and lessen the financial burden on the school that just fired him.
Muschamp’s contract does not have any such mitigation language.
The State had his contract and subsequent amendments to it reviewed by a pair of experts in the field of sports contracts — Anita Moorman from University of Louisville and Marty Greenberg from Marquette — and both said the language of the deal says South Carolina would almost assuredly not be entitled to paying less money if Muschamp gets a new job.
“The termination without cause sections do not mention mitigation expressly,” Moorman wrote in an email.
Several calls made and emails sent to USC officials seeking clarifications and comment for this story were not returned.
Greenberg explained that most contracts in the sport require the fired coach to make a good-faith effort to find work, which in turn reduces what the former school has to pay as part of a buyout. Without that, the buyout is relatively straightforward in favor of the coach. He’s owed the payout even if he’s not working next season, which doesn’t leave a ton of room for negotiation.
These parts of the contract have evolved through the years to protect schools, as coaches would get fired from one job and then still get paid a full buyout while drawing a paycheck from a new school. (Muschamp himself did this when he was fired by Florida and then became the highest-paid assistant in the country at Auburn.)
Looking to limit such situations, universities have used increasingly strong and sophisticated language in some deals, as coaches found different ways to take new jobs that would still leave more of the salary bill for schools that fired them. (Former Gamecocks coach Lorenzo Ward did this, taking a below market-level deal after USC let him go.)
Former South Carolina defensive coordinator Travaris Robinson’s contract, which was signed the same year as Muschamp’s, has that mitigation language, right down to a specific element put in to prevent someone from doing what Ward did. Muschamp’s deal did not.
That aspect is standard for most contracts, Greenberg explained, but some don’t have it, including a significant majority of public school head coach contracts in the SEC.
“If you look at the contracts for [Gus] Malzahn at Auburn, [Dan] Mullen at Florida, [Mark] Stoops at Kentucky and [Jeremy] Pruitt at Tennessee, they don’t have that either,” said Greenberg, who does negotiation work for some coaches. “That’s an item that’s negotiated” when coaches are hired.
That absence of that language means that when any of those coaches, or Muschamp, is terminated without cause, as happened last month to the former Gamecocks coach, he’ll get all the money listed as “liquidated damages” in the deal.
Based on the contract amendment spelled out and voted on in a December 2019 university board of trustees meeting, that total is more that $13.2 million, to be paid out to Muschamp until 2024.
All those coaches, including Muschamp and new Gamecocks coach Shane Beamer, are represented by powerful agent Jimmy Sexton.
Having mitigation language that prevents double-dipping can be a tool in the kind of negotiations Tanner is in the midst of. An example of that is South Carolina’s biggest addition last offseason, offensive coordinator Mike Bobo.
The former Colorado State head coach was set to be owed a total of $5.5 million when he was fired by the Rams, which was to be paid in monthly installments across three years, subject to this mitigation. His separation agreement dropped that total to only $1.825 million, but it removed the mitigation requirement. Bobo then turned around and signed a two-year deal with South Carolina worth up to $1.2 million a season.
Bobo’s USC deal has mitigation, meaning that if he isn’t retained by South Carolina as part of Beamer’s new staff and is hired elsewhere, the Gamecocks will owe him the difference between $1.2 million and 75% of whatever the coach he replaces made in their last year.
Greenberg explained that a lack of mitigation language is rare across the hundreds of contracts he’s looked at. According to a presentation of his, more than two-thirds of Power 5 head coaches whose contracts were available had mitigation requirements.
“This has become now a negotiated item,” Greenberg said. “Your power or leverage coaches … they are in some instances, negotiating, essentially no mitigation of damages. They fire you, (the school is) on the hook for the entire amount.”
Muschamp was originally signed to a five-year deal that made him one of the lowest-paid coaches in the SEC. After a nine-win season in 2017, he was given a sizable raise and extended to six years. A season later, one more year was added to the deal to keep it at six years.
That change, coming off a 7-5 regular season, added more than $3 million to the buyout.
“The back end of the contract, the termination provisions may be more important than the payment package that the coach gets at the front end,” Greenberg said. “This is a field where you get hired to get fired.”
This story was originally published December 9, 2020 at 9:25 AM.
