Universities can easily end up on the losing end of a negotiation to hire a winning coach – something that a North Carolina system committee recognized on the first day of its work to identify the best ways to ink contracts with coaches and athletic directors.
Tuesday marked the first meeting of the system’s Committee on Best Practices for Head Coach and Athletic Director Contracts. The group originally planned to meet on March 12, the same day the NCAA issued a postseason ban and other penalties against North Carolina’s football program for multiple violations, including academic fraud, impermissible agent benefits, ineligible participation and a failure to monitor. The committee cancelled that session, as its chairman, former North Carolina Athletic Director Dick Baddour, dealt with the NCAA fallout.
The panel was convened by North Carolina system President Tom Ross in January as the NCAA investigation lingered. Ross said he wanted the group to consider what elements, such as academic measures, should be included in coaching contracts. The panel is made up of athletic directors, university attorneys and former Board of Governors Chairman Jim Phillips, a Greensboro lawyer.
On Tuesday, the committee began to sift through the pitfalls in a world where successful coaches are the objects of bidding wars and multimillion dollar deals.
The “fast and furious” nature of those deals is problematic, committee members said.
“The market for coaches, whether you’re at a BCS school or a mid-major, moves at the speed of light,” said Eileen Goldgeier, general counsel at N.C. State University. Too often, she said, deals are done in the heat of competition with other bidders, hours or days after the end of football or basketball season. The processes in place aren’t nimble enough to allow the university to act expeditiously enough, Goldgeier said.
Terry Holland, athletic director at East Carolina University, agreed. “The rush is a big problem,” he said. “It can become very chancy in terms of a losing a coach.”
Also, preliminary hiring agreements, known as memoranda of understanding, can be tricky. Typically such documents specify only the basics such as term of employment, salary and bonus structure. That can leave universities in a bad bargaining position with coaches, Goldgeier said. “The devil is in the detail,” she said.
Coach hires are subject to a vote by campus boards of trustees. But the system’s Board of Governors has a policy spelling out that contracts should include general principles on academic values, compliance with NCAA rules and standards for outside compensation and sources of funding available for salary. No automatic extensions are allowed and all contracts are public records, the policy stipulates.
But the North Carolina system president and the Board of Governors do have some say over specifics in coaching contracts, including deferred compensation and buyout clauses. The board can consider the university’s ability to pay buyouts, the sources of funding to be used and whether such payouts will harm a university.
Phillips said the policy, updated in 2007, was meant to protect campuses because “some schools might have eyes that might be bigger than their stomachs.”
Such buyouts, including the one for the fired former North Carolina football coach Butch Davis, have been controversial. Davis was fired without cause, which meant that he was eligible to receive a payout.
Laura Fjeld, general counsel for the North Carolina system, suggested the panel discuss whether the allegation of a major NCAA infraction is too high a bar for a university to find “cause” to fire a coach.
“It’s healthy for us to be discussing (the issue) in this context,” Fjeld said after the meeting.