Coaching contracts: Inside story

When most people think about college football or basketball coaches, they see X's and O's and contemplate the thrill of victory and agony of defeat.

Champaign lawyer Dave Sholem thinks dollar signs and lots of them, not to mention country club memberships, tickets to sporting events, access to aircraft and federal income tax implications.

Why such a cold-hearted, analytical perspective?

"They are in the entertainment business," Sholem said. "It's not just coaching."

He should know. The 58-year-old lawyer represented former University of Illinois men's basketball coach Bruce Weber in his recent job search and, perhaps setting the new indoor record for wrapping up a complicated agreement, negotiated Weber's multimillion-dollar deal to take over the Kansas State University men's basketball program.

"It was a fire drill," said Sholem, describing a negotiation that was completed late on a Friday night (March 30) so that Weber could be introduced to Kansas State fans on Saturday (March 31) afternoon in Manhattan, Kan.

He's been negotiating coaches' contracts since the days of former UI football coach Ron Turner.

When he was new in town, Turner turned to Sholem to handle his purchase of a home. Then he asked Sholem for some thoughts on his proposed UI contract.

It was a fortuitous circumstance that led Sholem into the business of representing UI coaches. Just a small part of his law practice, Sholem estimates he's had 12 to 15 coaching clients, "many of them assistants."

He said he ended up with Weber as a client on a referral from Turner.

Lawyers are reluctant to discuss their clients or their clients' business. But Sholem agreed to discuss the business of coaching contracts and his specific experience in the recent Weber negotiation after clearing it with the former UI coach.

"He was very comfortable with me talking about the process," Sholem said.

A lawyer who handles business matters, Sholem has negotiated many employment agreements for corporate executives, and he said negotiating contracts for coaches is no different.

What is different is how much has changed in terms of types and amounts of compensation for high-powered coaches.

They can ask for and receive almost anything from prospective employers desperate for a winner.

Alabama football coach Nick Saban, in addition to receiving multiple millions of dollars in annual pay, asked for and each year receives 25 hours of flight time in a noncommercial aircraft.

But Sholem warned such perks can be a two-edged sword because the flight time is interpreted by the Internal Revenue Service as additional compensation, and coaches with such a contract clause could receive a big tax bill for exercising it.

Michigan football coach Brady Hoke won the Wolverines' agreement to pay him extra for postseason wins — $525,000 if his team wins the 2012 Big Ten conference championship game. Purdue's Danny Hope will get a bonus if home game attendance goes up. University of Texas head football coach Mack Brown is entitled to escalating bonuses depending on team graduation rates.

At Kansas State, Weber, who does not come across as a country club guy, will have membership in one club and golfing privileges at another facility.

This kind of clout, however, is reserved for coaches at the top of the collegiate heap. Call it the law of supply and demand.

"What gives you leverage is when you're in demand," Sholem said. "(Weber) was definitely a hot commodity."

Illini fans disillusioned with Weber might not understand, but the former coach is perceived in his profession as a top performer. Sholem said that "every year" during Weber's nine-year tenure at the UI, his client received "three or four opportunities to leave."

"He was very loyal," Sholem said.

So when Weber was dismissed by UI athletic director Mike Thomas at the end of the 2011-12 season, a number of schools looking for a new coach took immediate interest.

Sholem declined to identify those schools but said more than "half a dozen" expressed "serious interest." He said "serious interest" included interviews and inquiries as well as verbal and written job offers.

News reports linked Weber to a number of jobs, including those at Southern Illinois University, the College of Charleston and Tulsa.

But everything changed on March 27 when Kansas State coach Frank Martin accepted the head job at South Carolina. Weber was immediately interested in the KSU job, and KSU athletic director John Currie was equally interested in Weber.

Sholem said Weber and Currie met for a one-hour interview that stretched into three hours on Wednesday (March 28) in Chicago. Weber flew on Thursday (March 29) to the Final Four in New Orleans and met again with the KSU athletic director on Friday (March 30).

By noon on that Friday, Weber informed Sholem that KSU was "seriously interested" in him and told Sholem to expect to receive by email the first draft of a contract from KSU that afternoon. Sholem said Weber also told him to expect "other (proposed) contracts from other schools."

Sholem keeps hundreds of college coaches' contracts on file so he can determine what the market will bear. He was lucky in this case because KSU had posted Martin's contract on its website, and Sholem did not have to waste time trying to file a Freedom of Information Act request for a copy.

Using the Martin contract as a guide, he and a lawyer for Kansas State negotiated straight through to the end.

"By approximately 11 p.m. Friday, it was signed," Sholem said.

A little over 12 hours later on March 31 — 22 days after Weber was fired at the UI and four days after Martin left for South Carolina — KSU held a news conference to introduce its new basketball coach.

Weber's five-year contract calls for an annual salary of $1.5 million a year with $100,000 raises each year. He qualifies for bonuses based on team performance on the court and in the classroom. Among other perks, he also is entitled to tickets to KSU basketball and football games as well as the Big 12 tournament.

The contract also spells out buyout provisions should Weber leave voluntarily or be dismissed.

Sholem declined to get into the specifics over which provisions he and the KSU lawyer haggled. But he said negotiating issues aren't always about money.

"There are a variety of issues that can arise that are not economic but can have a dramatic impact on economics," he said.

Those issues include the terms that apply if one side chooses to terminate the contract.

Can a coach be fired for violating a minor NCAA rule or does it require a major NCAA violation? If a coach is fired, can the university reassign him to other duties within the athletic department? Or is the coach free, as Weber was at the UI, to go to a new job and take his buyout with him.

One interesting aspect of the contract talks was the degree to which the parties relied on high-tech communication between Sholem in Champaign, Weber in New Orleans and the KSU lawyer in Manhattan, Kan.

At one point, Sholem was working in his car while his wife drove him to Chicago.

"I had my Blackberry, my iPad and my laptop," he said. "I probably sent (Weber) 30 text messages within a four- to five-hour period."

Sholem said contract negotiations can be contentious, but this one was "too fast to be contentious."

Jim Dey, a member of The News-Gazette staff, can be reached by email at jdey@news-gazette.com or at 351-5369.

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read the DI wrote on April 24, 2012 at 10:04 am

Jim Dey is still alive? Wow! That dude's older than dirt.

 

JimOATSfan wrote on April 24, 2012 at 12:04 pm

Great post ... very informative.  Write more often Jim.

Glad everything went so well for Coach Weber.  Love to see his team win a national championship using 'Frank Martin's players'.  Go Illini

Bear8287 wrote on April 24, 2012 at 1:04 pm

Thanks for a well written and informative article.  Provides a glimpse at a side of the sport that most fans never see.

Go Illini!

 

"I probably sent (Weber) 30 text messages within a four- to five-hour period."

A number of readers probably have teenagers that could do that in less than 10 minutes. :-)

DaisyJ wrote on April 24, 2012 at 3:04 pm

Just how can any coach look you in the eye with a straight face and tell you he is worth the money

they hand to them.  NONE can...with people out of work, hungry, no hope,  we see this money thrown around like play money and all so we win a game. I love sports, but not the money that

has gone overboard. Time sportwriters spoke up,,,but no, they are quiet like they were with

the steroid uses in baseball and other sports. Football is way to dangerous, we all know what id

does to the brain, but yet no one is stepping up in the NFL or college or high school and saying stop

with the danger to the brain. NO ONE.

jgrout wrote on April 25, 2012 at 7:04 pm

The New York Times has been running a series of hatchet jobs on the NCAA, trying to stir up support among their liberal constituency (who believe that government is the answer for every problem) for a Federal Department of Sport that would transform college sports into a politically correct farce.  That's the only scenario for you to get what you are asking for.

 

wolfe wrote on April 24, 2012 at 3:04 pm

Daisy..   Construction work is dangerous but we still pay people to build buildings, bridges, etc.  Commercial fishing is dangerous, just want Discovery channel, but we still want that king crab, tuna, etc.


 


Nothing is risk free.  Football players take a great risk everytime they step on a field but the reward to those men and boys outweighs the risks. 


You can complain about throwing the money at these coaches, players, teams, etc when there are people out of work but those coaches couldn't get paid without fans, ticket sales, etc.  We caused the excess spending and good luck later on.


 


Enjoy the games and don't spend too much time worrying about things you can't control.

DaisyJ wrote on April 25, 2012 at 10:04 am

Name me the number of people that in construction get the head butting play after play like

football does. Name the number.

 

As for the reward, some reward not being able to remember who you are.

 

As for the money, so you are telling me that you did not even wince a bit when you learned

that Weber got how much to leave, heck, we paid Jerrance $400 G's to leave also...and you

are just happy as pie to see Pujous get his money...get a life man, you are paying it for them

you dunce.

Illini Guru wrote on April 26, 2012 at 4:04 am
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Very interesting and insightful article.