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Tuesday, December 12, 2006
Lawyers in Demand at University Athletic Departments?

Last week at the Street & Smith's Intercollegiate Athletics Forum, when NCAA president Myles Brand and other panelists were asked what they thought would be the most important story to follow in the upcoming year, Brand said "Coaches' contracts," and added that "agents have the upper hand" now and schools may need outside help negotiating these deals. [Jodi Upton, USA Today, Colleges troubled by coaches' rising salaries] Brand told Upton in an interview: "Negotiations have become tougher, and there's a lot of competition for the best coaches. It might make sense for schools to have representation. They use outside counsel on other things."

I've always thought that university athletic departments would be better served by having a full-time attorney in-house to deal with not only coaches contracts, but also with compliance audits, Title IX issues, NCAA rules interpretations, the NCAA enforcement process, and the development of institutional policies and procedures that have all sorts of legal implications (i.e. drug testing, use of Myspace/Facebook, etc.), to name just a few. As a result of the increase in coaches salaries, coaches contracts, correspondingly, have become much more complex with respect to termination rights, liquidated damages (how much one party owes the other upon a breach), and mitigation of damages (whether the compensation under a future contract should reduce the damages owed by the university to the coach).

I agree with Brand when he says that agents have the upper hand in negotiating coaches contracts. One of the great benefits to having an agent when negotiating an employment contract is that the prospective employee, whether it be a player or coach, can play the "good cop, bad cop" role. In other words, the coach or player can say, "I know, but my agent is making some of these demands and I'm not a business person, which is why I hired him." An attorney working on behalf of the university might be able to level the playing field in that respect.

Also, I've always thought that the coach has more bargaining leverage than the university in the contract negotiation process. First, the coach and the university agree "in principle" that he is going to be the new head coach, and it hits the press that same day. Then, after it hits the press, the university and the agent get together over the next few days and hammer out all of the important details of the contract. During these negotiations, it seems that the coach would have a much easier time walking away from the deal than the university would, which gives the coach more leverage. The university is placed in the inviable position of having to explain to students, alumni and boosters that they lost their "prized" coach because they couldn't agree to the terms of the contract. Maybe an in-house lawyer could aid the university in that process at the outset when the agreement is reached "in principle".

As more universities hire counsel, whether in-house or outside, it creates more opportunities for lawyers who want to work in the sports industry.


Interesting post. Most NCAA Division I athletic programs I'm familiar with utilize university counsel for these purposes, meaning that the athletic dept. doesn't have its own internal attorney, but rather uses the larger university's in-house counsel.

I believe you're absolutely correct Rick with regard to the negotiating leverage issue. The reason so many high-profile coaching contracts look one-sided (i.e. favoring the coach vs. the school) is that they are. The high-profile coaching candidate has employment options and, via simple supply-and-demand, can use that to pressure the potential employer into drafting a contract that strongly favors the coach's position.

Blogger Chad McEvoy -- 12/12/2006 10:54 AM  


Great point in this issue. At times, university clients of ours have used our firm for these purposes, but they have not been consistent and it has resulted in problems when coaches move on or are terminated. Often, university counsel are not sensitive to many of the important issues that arise in athletic contracts.

Anonymous Anonymous -- 12/13/2006 12:59 PM  

Maybe the schools shouldn't sign agreements in principle. Anyone know which parts of these AiPs with coaches are made binding, if any?

Apparently there's no "joint public disclosure" clause that's binding, in the way that you'd see in an AiP between two parties to a merger...either that or the clause doesn't say what it should.

Blogger ChapelHeel -- 12/14/2006 6:05 PM  


You raise some good points, and that's why I said maybe an in-house attorney on staff in the athletic dept. could be helpful to aide the process at the front-end when the agreement is reached in principle. For the most part, I don't think they are signing AiPs or LoIs as usually happens in the context of mergers and acquisitions.

But regardless, I think that in the merger/acquisition negotiation context, one party doesn't typically have greater leverage over the other in threatening to walk away (to the extent they legally can) after the AiP is reached like the coach does in the negotiations with the university, which makes it somewhat unique that way.

The other dynamic here is that you have an employer-employee relationship, with provisions that are not very typical in this type of relationship (liquidated damages, buyout clauses). I guess the closest analogy would be a high profile CEO hired from outside the company, but it's still different in that the company would have no problem telling its shareholders and customers that they just couldn't agree on the terms of the contract -- he wanted too much money or whatever. When the company says the CEO wanted too much money, that actually can make the company look like it is making sound business decisions. But when the university complains it makes them look like they don't want to win.

Blogger Rick Karcher -- 12/18/2006 7:12 AM  

Saban's contract should light another fire under Brand. I agree that outside counsel (or on staff at larger universities) could help but Chad's comment about supply and demand seems more on point in driving the issue. In most of these cases, the coaches are in control.

Also, Rick touched on the public relations aspect towards the end of the post, but the pressure put on athletic departments to get their guy may outweigh desires of fiscal responsibility or a "fair contract".

Face it, most of the uprising over Saban's deal wasn't over the money, it was over how Saban dealt with the process.

Anonymous Joshua Golka -- 1/05/2007 8:02 PM  

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