Golden Parachute – Reward for Failure

Followers of the national news probably expect this to be a rant about the government bailout of failed financial institutions, and the huge bonuses paid to those responsible for the problems. Those in tune with recent events in Kentucky are more likely to guess the actual topic. Although the total overall dollar figures are less, ($6 million instead of $170 million), when it’s all going to one loser instead of divided among many, it seems far more outrageous.

My employer and alma mater just “fired” another basketball coach. The word “fired” is in quotation marks because, in the Wonderland world of college athletics, “firing” has a different meaning than it does in normal employer/employee relations. Most fired employees cease drawing paychecks. But there’s a strong possibility that we will continue paying our “fired” basketball coach $1.5 million per year, for a total of $6 million. So being fired is actually a benefit. Instead of having to work for obscene amounts of money, he gets obscene amounts of money for doing absolutely nothing. Tough job, but somebody has to do it.

At a time when we’re facing severe financial straits, this is even more outrageous. Budgets are being cut. Staff haven’t gotten a raise in three years. Some have been laid off. Students have been faced with tuition increases every year, frequently double digit percentages, although they managed to keep it down to 9 percent this year. In the face of all of this, it seems hard to justify paying somebody $6 million for nothing, in addition to what we’re going to have to pay to whomever takes his job.

In hopes of avoiding a lynch mob, our president and athletic director are going to try to “settle” for some amount less than $6 million. Their excuse is that the coach did not have a “contract”, just a “memorandum of understanding”. Apparently what that means is when the coach was hired two years ago, everybody signed a piece of paper that promised him the world with no strings, until such time as they could work out a more formal “contract”. The coach, although he’s a drunken buffoon, has a smart lawyer, and for two years he has refused to sign anything with stricter terms than the original “memorandum”. Attorneys interviewed by the local media all agree that the “memorandum” walks like a contract and quacks like a contract, and will probably be upheld by any court. When asked about the possibility that the coach will be a nice guy and let us off the hook, the coach’s attorney says “Litigation is what I do for a living”.

Outsiders who are not aware that basketball is the largest organized religion in Kentucky may not be aware just how newsworthy all this is. Yesterday, the coverage in the local newspaper included 5 full pages inside the front section, plus most of the front page, plus the front page of the sports section. The worship of the coach started even before he was hired. Hosannas were heard throughout the land when his hiring was announced. But fanatic followers are as fickle as they are fervent. In just two years, the adoration has given way to Facebook groups calling for his crucifixion. Some of the media throngs swarming the campus interviewed a German visitor who didn’t understand the religion. When it was explained to her that the coach was being fired for losing games, she said “You mean they don’t change the players?”

Actually, the official line is that the coach wasn’t fired for losing, he was fired for being a jerk, or “not the right fit” as the press releases stated. One popular example, constantly repeated by the media, was his refusal to speak to the local Rotary club. From everything I’ve heard, he really is a jerk. But he was a jerk when we hired him. He’s always been a jerk. But nobody noticed (or cared) that he didn’t “fit” until we got shut out of the NCAA tournament this year. Then suddenly we needed a coach who was more gracious. (Rick Pitino was a jerk too, although a little more polished. And the only thing that made people hate him was that he left while he was winning.).

So now, for being a jerk, our ex-coach gets to continue drawing a huge paycheck while enjoying a life of leisure, or while simultaneously drawing another huge paycheck for being a jerk at some other school that needs a coach because they fired one for losing games. I’ve occasionally been accused of being a jerk, but nobody’s ever offered to pay me $6 million for it.

I’ve never understood why it’s common practice for colleges to offer coaches the kind of “contracts” they do. The word “contract” is in quotation marks here because unlike most contracts, the standard coaching “contract” does not seem to be binding on both parties. We agree to pay a coach some huge amount of money for some number of years, regardless of whether we win or lose. Then, if we lose a bunch of games and decide we’d rather hire another coach a huge amount of money, we’re obligated to continue paying the loser (or the jerk) for the remaining term of the contract. On the other hand, if we win so many games that some other school decides they’d like to fire their existing coach and hire ours for even more than we’re paying him, the contract provides no penalty if he breaks it and leaves before the contract expires. Well, I guess there is one penalty. If he leaves voluntarily, we don’t pay him for the remaining years that he’s not working for us. So that makes getting fired seem like a better deal than leaving voluntarily. At one point, we were paying three football coaches: the one who was actually currently coaching our team, and the one that had just been fired, and the one who had been fired previously but whose contract was still in force when his replacement was fired. And this year I’ll get another nice letter from our president thanking me for all my hard work and expressing his extreme disappointment that the current financial situation once again prevents him from offering me a raise, although we have millions to pay some jerk for leaving.

Defenders of our bloated athletic system will hasten to point out that the athletic department’s budget is totally separate from the campus budget, and draws nothing from the general fund. It’s totally self-supporting, and actually generates a profit from ticket sales, donations, media contracts, merchandise licensing, etc. Some of that excess actually benefits the academic sector, as it is fed into scholarship funds. And all of that is true. But at a time when we are losing state funding, and desperately considering all possibilities for raising revenue or cutting expenses, it might seem reasonable to consider milking a little more out of the athletics cash cow. And now, even if somebody was blasphemous enough to consider that, there will be $6 million less to milk.






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