By Thom Park, Ph.D. EADING THE TRANSAIONS COLUMN IN THE play and geography can be a complex research task. daily sports page, studying the waiver wire and Moreover, the higher- level packages get complicated with Rreviewing the latest sports deal on the Internet have salary, CPI escalators, qualitative perquisites, non-W-2 become habits of mine. outside income, appropriate retirement packages, life To the uninitiated, what a good head football coach insurance, annuities and severance compensation, making a should be awarded in his contract might translate only into five-year, $3 million deal a composition of many parts. dollar compensation. Let me suggest, rather, that the deal’s Assembling these in manner that suits the coach’s design and structure, the performance incentives, roll-over personal financial situation while hitting market provisions, outside income, retirement benefits, split-dollar compensation and being fair to the school is more art than collateral assignment cash-value life insurance, settlement science. It takes a skilled team of experts to put one of these options, termination provisions, clear definitions of just transactions together. Often a good deal takes many months cause, and the lack of a coach buy-out clause to the or even more than a year to do and it requires a coordinated university’s benefit are all critical elements far more and highly competent deal team. important than money. It is axiomatic to business-that you never enter any All too often universities do not appreciate the difficulties transaction unless you have an exit strategy. The in the life of the football coach, nor do they value just what it determination of what constitutes just cause for termination takes for the coach to make the program a winner. Those is also crucial, followed by the resultant liquidated damages schools that do are fair to their coach and his family. Make provisions, which must be very clear. You never want to your employer do this with an excellent contract and have your settlement negotiated after being fired. Coaches compensation package. who have to pay their university for the right to change jobs First, dispense with and refute the false premise that should never agree to such a provision unless they have an football coaches are overpaid. By any measure, the top 10 incredibly strong financial offset to remain. The use of football coaches in the world — men like Bobby Bowden, tax-deferred annuities, or better yet, non-qualified deferred Lavell Edwards, Steve Spurrier, Joe Paterno, Bill Snyder, compensation in the form of split-dollar collateral John Robinson and Lou Holtz — earn far less than the top assignment cash-value life insurance can be structured to 100 physicians, the top 200 lawyers, top 200 bankers, top 300 keep a coach in place, fund his retirement, pay his widow, CEOs or the top 100 engineers. Set the money issue aside and accrue wealth in a tax-deferred way, and avoid current do not apologize for asking for it, you’ve earned it. taxation on compensation that is intelligently structured. This The only career more hazardous than coaching is an is a win-win paradigm for the coach and his family, and the infantry officer in combat, so you deserve to be well paid. school and the program. Such cutting-edge financial Plus, few professionals work so hard and neglect every other techniques in coaching contracts are the means to deal with aspect of their lives as much as coaches must do. Few men the voraciously competitive nature of modern football are as focused and as time-consumed as football coaches. business. Researching this question from every angle, coaches deserve Coaching is far too difficult to ever allow yourself to be the money — particularly as a career-risk premium. Working obligated to pay your employer if you wish to move to a 105 hours a week in-season should count for something. better opportunity. This is where athletic directors who The deal structure, the contract term, the terms of control recognize the value of a fine coach need to be knowledgeable and responsibility, the definition of resources and the lines of enough and fair enough to put together a package to keep authority are very important. Language needs to be clear. their coach. So often athletic directors fail to do this, then You need enough time to recruit and to win, so the contract lose or fire a coach, and subsequently pay significantly more term is key. If you do something extraordinary, you should to start over with a new coach who takes a couple of years to be rewarded for it through appropriate performance bonuses. get back to where the last coach left off. Rolling your contract over annually should signal to the Athletic directors need to put together deals that enable upcoming recruits that they have you for four more years or themselves to hold their critical, wealthy alumni at bay every else it should tell you to look elsewhere if your term is time the coach has an off season. That is why strong deals are running out. Athletic directors should understand this. a must for recruiting and program continuity. Rollover provisions are very important for program stability The business world of football today has made the and recruiting. anatomy of coach’s deal a lot more complex than ever before. Paying a coach at current market rates is only fair. Be sure when you take a job that you have an arrangement Determining just what these rates are by conference, level of that is both fair and intelligent. Your career deserves it and so 46 www.AFCoach.com American Football Coach do you and your family. A former college football coach with stops at Maryland, Citadel and UConn, Thom Park, Ph.D., is a successful financial planner and one of the nation’s foremost authorities on sports contracts, agents and negotiations. Park has been a featured speaker at a multitude of coaching clinics, including the AFCA convention, and is a regular contributor to AFC. 46 www.AFCoach.com American Football Coach .