Tag Archives: ucla

Crean’s Buyout Suggests He’s at IU for the Long-Term

August 9, 2013
Crean’s Buyout Suggests He’s at IU for the Long-Term

Indiana’s buyout cost to early terminate their head men’s basketball coach dropped last month from $16 million to $14 million

Oftentimes the end date of a coaching contract has little meaning. This is due to termination provisions and the frequency of amendments and restatements. However, if Tom Crean tells a recruit, “I’m staying with Indiana for the long haul and vice versa”, his employment agreement with the school would appear to support his words.
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Parrish Misses the Mark on Critique of UCLA, Alford Buyout

July 9, 2013
Parrish Misses the Mark on Critique of UCLA, Alford Buyout

Today Gary Parrish of CBSsports.com staunchly critiqued the contract between UCLA and men’s head basketball coach Steve Alford in his piece, “Why UCLA’s buyout in Steve Alford’s contract makes no sense for UCLA“. Parrish writes:
Continue reading Parrish Misses the Mark on Critique of UCLA, Alford Buyout

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Battle of the Buyouts: UCLA vs. Minnesota

March 22, 2013
Battle of the Buyouts: UCLA vs. Minnesota

LNH clears up some misinformation on Howland’s buyout costs

It’s been reported multiple times over the past week that Howland’s contract runs through 2015 and that a buyout of his contract would cost the school $2.3 million. Both of these are claims are inaccurate.

SHORT VERSION
Ben Howland is under contract as head coach for UCLA through the 2016-17 season. If the agreement was terminated in the next week and a half, the buyout costs for the school would be $3.2 million. That amount could be reduced in the future depending on the future employment of Howland.

ENHANCED VERSION
The expectations of Ben Howland and Tubby Smith could not be more different. A review of their respective employment agreements makes it clear from the employers’ perspective. The media and fan bases of these two programs leave no question about who must deliver more.

The results demanded from Ben Howland are far higher than Tubby Smith. However, any reasonable financial valuation model will conclude that the value of Tubby Smith’s contract is higher than that of Ben Howland’s.

If interested in how the termination provisions in Howland’s contract compare to that of Minnesota Gophers head coach Tubby Smith’s, see our February 2013 article “Tubby Smith’s Buyout: Approximately $3.25 Million.

Let’s now narrow the focus to UCLA’s costs if they were to terminate Ben Howland without cause.

Components of the $3.2 million are:
(1) Base pay for the remainder of the contract – $1.2 million ($300,000 per year X 4 years                          remaining on contract); and
(2) Guaranteed fee for one year – $2.0 million.

The guaranteed fee is effectively what is commonly called supplemental compensation. UCLA is on the hook for the remainder of the fee in the year that a termination is made plus one additional year. The $3.2 million assumes a scenario under which a termination would occur just before April 2, 2013.

Contract years begin on April 3 and therefore April 2 becomes an important date. If UCLA fired Howland on or before April 2, 2013, component (2) would be approximately $2.0 million. If they terminated his employment on April 3, 2013, component (2) would be $4.0 million.

Unlike many coaching contracts, the school would not immediately pay out the $3.2 million. Rather, UCLA would continue to pay certain amounts in equal monthly installments, similar to as how they would pay the amounts if Howland were still employed.

A key provision is that if Howland found other employment, the payments from UCLA would be reduced by his income from the other source(s). The contract wording could be firmed up and might be open for legal challenge, but the intent is that in year one after termination Howland would receive $2.3 million and in years two through four he’d receive $300,000 per year.

That said, if Howland were fired in the next week and a half you might expect him to take a year off from working in basketball (includes not only coaching, but promotional/endorsement work, consulting, etc.). If he went to another school to coach next month, his new income will reduce what he’d be receiving from UCLA. (i.e., if the new school pays him $1.8 million, UCLA’s cost in year one would be only $500,000 and in future years – assuming he’s still employed – $0.)

In summary, Ben Howland is under contract through the 2016-17 season and his current buyout would be $3.2 million. However, that amount could be reduced by as much as 100%.

NOTE: Certain financial information and legal interpretations above provided by the consulting firm Pleasant Avenue Athletics.

Follow @LateNightHoops on Twitter.

UCLA Bruins adidas College Impact Camo Logo T-Shirt – Mens – Bruin Blue

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Gophers vs. UCLA

Some articles will be posted here at LateNightHoops.com, while others will be at GopherHole.com. Check back often and follow @LateNightHoops and @JBBauer612 for updates.

Game Preview: Gophers vs. UCLA 3/22/13
Analysis of the four factors and other miscellaneous notes in advance of Friday night’s game.

Gophers vs. UCLA: Getting to Know the Bruins
Player previews for the UCLA Bruins

Fact Check: Forbes says Tubby can earn $2.75 million from team’s performance in NCAA tourney. Are they correct?
Smith’s contract is very generous.. but not quite THAT generous.

Battle of the Buyouts – Fact Check re: Ben Howland’s Contract Length & Termination Provisions
Howland under contract through 2016-17 season

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