Buyout Question

[GrandBayTider]

I have seen several posts stating the large amount that CMGs buyout would cost is one of the major reasons he will be staying. One poster stated it was 3 million. Does anyone know for sure if that is correct? I have been unable to find an article with the informaiton, and Mal wouldn't tell me when we talked last night. :biggrin:

 

[BamaLaw]

As I understand it, it's not actually a "buyout" so much as it is a guaranteed contract. I won't attempt to break it down into specifics; however, I believe Gottfried's total compensation package is in the $1MM per year range. Therefore, if/when he is dismissed, it requires payment of the remainder due him under the contract. It seems there are three years remaining on his contract. Therefore, the amount due him, if he's let go after this season, is $3MM. Now, this would be paid out over the remaining time that the contract covers; and Gottfried would surely have a duty to mitigate, meaning he would have to actively seek employment and whatever compensation such job would pay would go to reduce the amount Bama would have to continue to pay him. Now, I'm saying all this without being privy to the actual contract. Someone who is aware of the specific terms of the contract may be able to add/correct this information.

 

[CraigMack]

double post

 

[CraigMack]

According to this AP Story,

The deal, with a $200,000 base salary and $800,000 in talent fees, makes the 41-year-old Gottfried the first Alabama basketball coach to reach the $1 million mark.




Talent fee...that's funny.

 

[Bama Reb]

The deal, with a $200,000 base salary and $800,000 in talent fees, makes the 41-year-old Gottfried the first Alabama basketball coach to reach the $1 million mark.




Talent fee...that's funny.

So he gets $800K for recruiting the talent, but once he gets them here he thinks his job is done?? You want a quick turnaround? Dock him the $200K a year for unsatisfactory job performance. That'll make him either put his rear in gear or hit the door so fast it won't get a chance to hit him on the way out.

Another option: Everyone who regularly donates to the school and to the athletic program, send your next check to them in the amount of $0.00. Include a note that says "This is what you will continue to get from me until our Men's Basketball Program becomes as important to you as it is to me."

 

[rtr1973]

So he gets $800K for recruiting the talent

No, the University guarantees that he gets at least $800k per year for doing his TV and radio shows, commercials, speaker fees, etc. If his earnings from those sources are less than $800k, the University has to make up the difference.

To compare, Coach Saban's base salary is $275,000 a year. He's also guaranteed a personal service fee (roughly the same thing as Gottfried's talent fee, except Saban isn't required to appear in commercials and only has to do a very limited number of speaking engagements) ranging from $3.275m in 2007 to $3.975m in 2012 thru 2014.

 

[Bama Reb]

No, the University guarantees that he gets at least $800k per year for doing his TV and radio shows, commercials, speaker fees, etc. If his earnings from those sources are less than $800k, the University has to make up the difference.

To compare, Coach Saban's base salary is $275,000 a year. He's also guaranteed a personal service fee (roughly the same thing as Gottfried's talent fee, except Saban isn't required to appear in commercials and only has to do a very limited number of speaking engagements) ranging from $3.275m in 2007 to $3.975m in 2012 thru 2014.

I'm sure by the time CNS has been here 10 years, he'll have proven his worth many times over.

 

[TIDE-HSV]

Usually, a "buyout" refers to an amount different from the face value of the contract. It may be less or it may be more than what the contract requires for full service. However, it's usually less.

 

[bamadoc94]

I think that people use this 3 million dollar buyout term too loosely. As stated it is really a guaranteed contract with 3 more years at 1 million a year. If you look at the economics of it though, it may not be as bad as it sounds. The 1 mil a year is already budgeted in to the athletic departments budget so really the cost increase is simply the cost of paying a new coach. I believe the assistants all have one year contracts so they will not factor in this. Lets assume we hire a Bruce Pearl, John Pelphrey type from a mid major school we could probably pay them around 500,000 to 700,000 a year. If Gottfried takes another job making say 250,000 a year that would reduce the number by that amount each year. Now you are looking at between 250 and 400 thousand dollars a year. Joe Kines departure to A&M also freed up some money for next year as he still had another year on his contract. I don't know the exact amount, but it should at least cover next years needs. This only leaves us with 250 to 400 thou in years 2 and 3 to pay for a change. I am no expert, and don't have hard figures. This is a hypothetical only, so feel free to research this if you like. There is also the possibility of negotiating a "lump sum" buyout, usually at a discount. My main point is that "3 million dollar buyout" has a lot of shock value, but in reality making a coaching change wouldn't be as painful as many people would have you believe.

 

[BamaLaw]

I think that people use this 3 million dollar buyout term too loosely. As stated it is really a guaranteed contract with 3 more years at 1 million a year. If you look at the economics of it though, it may not be as bad as it sounds. The 1 mil a year is already budgeted in to the athletic departments budget so really the cost increase is simply the cost of paying a new coach. I believe the assistants all have one year contracts so they will not factor in this. Lets assume we hire a Bruce Pearl, John Pelphrey type from a mid major school we could probably pay them around 500,000 to 700,000 a year. If Gottfried takes another job making say 250,000 a year that would reduce the number by that amount each year. Now you are looking at between 250 and 400 thousand dollars a year. Joe Kines departure to A&M also freed up some money for next year as he still had another year on his contract. I don't know the exact amount, but it should at least cover next years needs. This only leaves us with 250 to 400 thou in years 2 and 3 to pay for a change. I am no expert, and don't have hard figures. This is a hypothetical only, so feel free to research this if you like. There is also the possibility of negotiating a "lump sum" buyout, usually at a discount. My main point is that "3 million dollar buyout" has a lot of shock value, but in reality making a coaching change wouldn't be as painful as many people would have you believe.

I hear what you're saying...and another thing...I keep hearing fans saying that the deep money folks don't want to pay Gottfried $3MM "not to coach." Well, in many people's opinion, he's already being paid "to not coach." The only difference is, while we are paying Gottfried to not coach, are we going to hire and pay someone to coach the team, or will they continue to not be coached?

 

[bamadoc94]

I hear what you're saying...and another thing...I keep hearing fans saying that the deep money folks don't want to pay Gottfried $3MM "not to coach." Well, in many people's opinion, he's already being paid "to not coach." The only difference is, while we are paying Gottfried to not coach, are we going to hire and pay someone to coach the team, or will they continue to not be coached?

Beautiful!!! Well put!!!

 

[bamaflyfisher]

seems like I remember Indiana boosters paid most of the Sampson buyout........

 

[rolltideas]

seems like I remember Indiana boosters paid most of the Sampson buyout........

I think they like and appreciate their basketball up there juuuuuuuussssstttttt a little bit more than the Bama folks do.

 

[rpeastep]

I'll be happy to contribute $100 to the cause. If I hit a big lotto, I'll gladly pay it all.

 

[TIDE-HSV]

If you hit a big lotto, we'd never hear from you again...

 

[JDCrimson]

I heard reliably today the money was available to buyout the contract. As usual the decision lies with Mal and apparently according to my source he is reluctant to pull the trigger this year. He did not elaborate as to the reason for the reluctance.

Honestly, I am surprised we can find enough money to buyout a basketball contract.

I know one thing we cant afford to give this guy another year and have him luck up and pull off some miracle and we are stuck with him another 3-5 years. If Antoine Pettway had not hit those buzzer beaters in the tournament, he likely would have already been gone by now.

I know Earle you are probably right on this but I dont know if I can stand another year of this.

 

[MikeD]

I just don't understand. How bad does the basketball program have to get before a change is made?

Any insight as to why another year for CMG is being considered?