Golden Parachutes Amid Layoffs

As the 2020 fall sports season comes to a close for most Division I programs and colleges cut ties with underperforming head coaches, university employees who’ve been laid off or furloughed are calling out institutional leaders for paying out millions of dollars to the departing coaches.

The employees, including faculty and staff members, say the payouts are a stark and insulting contrast to budget cuts made last year that largely fell on employees whose earnings were far below the stratosphere of the salaries of the coaches.

At the University of Arizona, outgoing head coach Kevin Sumlin will receive up to $7.29 million, half of which will be paid by Jan. 12, as stipulated in Sumlin’s contract, the Arizona Daily Star reported. The University of Texas will spend around $24 million in total to terminate the contract of Tom Herman, the former head football coach, and to pay out his assistant coaches, according to multiple media reports. The payouts don’t include the millions of dollars more these universities will spend to pay new football coaches.

Months before the head coaches were fired, some employees in the athletics departments of the two universities were told the departments could not afford to pay them because of the disruption to college sports and the loss of revenue resulting from the coronavirus pandemic.

Texas Athletics laid off 35 department staff members and eliminated 35 vacant positions about four months before parting ways with Herman, said a Sept. 1 release from Chris Del Conte, the university’s athletic director. About 270 more staff members will have their salaries temporarily reduced until August 2021, according to the release. The decisions were made to “ensure our financial stability going forward” and to benefit athletes, Del Conte said. A spokesperson for the athletics department did not respond to requests for comment.

“None of it has been easy, and we recognize the impact it’s had on so many and are deeply sorry for that,” Del Conte said. “But we also know it's our responsibility to position Texas Athletics to remain solvent, steady and able to perform at the highest level.”

The payouts for coaches have led to criticism by advocates for college sports reform. Disillusioned university employees are questioning the priorities of college leaders who would invest in football while sacrificing the livelihoods of staff members.

Anne Lewis, an executive board member of the Texas State Employees Union, or TSEU, which represents employees at the University of Texas, said Herman’s buyout was like a “slap in the face” to university faculty and staff members who have seen coworkers laid off or have had their own salaries cut.

The Longhorns had seven wins and three losses during the 2020 season, a winning record, but in four seasons of football Herman failed to win a championship in the Big 12 Conference, the intercollegiate league in which the university competes.

“That’s what this is all about, is winning,” said Lewis, an associate professor of practice in the Department of Radio-Television-Film at UT Austin who spoke on behalf of TSEU. “We’re losing things that are far more important than a football game. There are no number of wins on football games to make up for the loss that’s being experienced by the UT community.”

As Sumlin, the former Arizona football coach, awaits his buyout, Steve Kozachik and 20 other Arizona Athletics employees laid off in November are navigating an uncertain job market and trying to figure out how to cover basic expenses.

Kozachik, who was associate athletic director for facilities and capital projects, said he’s “hurt” emotionally by the decision after 32 years in the department, but he will be fine financially. Some of his former colleagues, however, are recent college graduates with student loans or who have young families to consider, said Kozachik, who is also a council member for the City of Tucson, where the university is located. He believes university officials, including Director of Arizona Athletics Dave Heeke, have forgotten the “human element” of these decisions and instead will throw millions behind the prospect of a winning football team.

“Intercollegiate athletics has lost its soul,” Kozachik said. “You can’t even look in the mirror if you're an athletics administrator right now.”

Clauses in coaching contracts that ensure multimillion-dollar payouts are common, especially for coaches of teams in the Football Bowl Subdivision, which includes the country’s top NCAA Division I football programs, said Nick Schlereth, a sports management professor at Coastal Carolina University who studies college athletics spending. Though the practice is typical, Schlereth said recent criticism of the payouts is another example of the pandemic bringing to light exorbitant spending decisions by athletics officials at institutions with major football programs.

“How does it look in these times when you’ve laid off people? Not good,” he said. “Suddenly you have $13, $21, $30 million that you can just shell out to somebody? That doesn’t seem right.”

Payouts are not required if a coach is fired for just cause -- for example, if they assault an athlete. An inadequate win-loss record is not typically considered just cause, Schlereth said. The agents of coaches who negotiate contracts establish termination clauses for good reason; the payouts offer some financial certainty in a fairly unstable job, where coaches can be fired simply because their team isn’t doing well, he said.

“For coaches, there’s so much uncertainty and turmoil on your day-to-day job,” he said.

But Schlereth also noted that other university employees across the country are facing similar insecurity during the pandemic, with no such “golden parachute” of millions in severance to lessen the financial blow of a layoff or job elimination.

Heeke, the Arizona athletic director, said in a Nov. 2 press release about the department’s layoffs that he has “a great sense of empathy and compassion for the members of our Wildcat family who are impacted” by the cost-saving actions, which also included a campuswide furlough program and a hiring freeze on 15 vacant positions in athletics. The measures save $3.6 million for the department during the 2020-21 fiscal year, which will help make up for an estimated $45 million loss in revenue due to the pandemic, the release said.

The decision to add additional expenses with Sumlin’s payout “wasn’t easy,” Heeke said during a Dec. 18 press conference. But there would be “real serious financial consequences going forward” if the coaching change was not made, including the possibility that donors and fans choose not to invest in Wildcat football in the future if the program is failing, he said.

“The financial plan that we have includes the need for our fans, our ticket buyers, our stakeholders, our donors, our community, to have a belief and a faith in our football program and the future direction of our football program,” Heeke said.

Matt Ensor, director of communication services for Arizona Athletics, said in an email that officials "carefully weighed" all factors in its recent coaching decision, in order to ensure the department's financial success over the long term while recovering from the pandemic. Success, in part, depends on the satisfaction of Wildcat football fans, and the team did not win any of its five games played during the 2020 season.

"There are always strong feelings among our fan base after a year in which our performance did not meet our expectations," Ensor wrote.

Schlereth said it’s possible that deep-pocketed donors contributed to the payouts by the Wildcats, Longhorns and other football teams with the goal of improving the teams’ records. But it seems “unrealistic” that donors were signing checks simply to get rid of a coach, and if they were, it reflects poorly on university leaders to accept such a payment, which grants donors “access and control” over athletics decisions, Schlereth said.

“You have to think about it from an athletic administrator’s standpoint,” he said. “What’s my control and who do I have an obligation to -- the donor or the school?”

Nancy Zimpher, co-chair of the Knight Commission on Intercollegiate Athletics, a watchdog organization that advocates for college sports reform, said college and university presidents have ultimate say over the types of athletics coaching contracts their institutions accept. The presidents should prioritize students over the wishes of donors or vocal board members who are football fans, said Zimpher, who is chancellor emeritus of the State University of New York system.

“The unequivocal issue here is the presidential leadership of the universities,” she said. “What you decide in these athletics decisions reflects your own values, character and commitment. People make donations for the good of the program. They should not be making donations with strings attached.”

The payouts that will be made in partial distributions over time have been “ridiculous,” Zimpher said, especially given that several colleges are cutting whole teams of athletes to reduce costs during the pandemic. Forbes estimated that six major football programs that recently fired their head football coaches spent about $75 million in total just for the separations.

“I can’t say enough how bad it looks in the face of the cuts that universities are making and will continue to make,” Zimpher said.