Wednesday, April 1, 2009
Calipari deal has many perks
LEXINGTON, Ky. -- The $31.65 million deal making John Calipari the highest-paid coach in college basketball is packed with perks beyond his annual salary, including membership to the country club of his choice, two cars and incentives for reaching the NCAA Sweet Sixteen and Final Four and winning a national title.
Calipari agreed to leave Memphis and Tuesday night signed the eight-year contract to join the nation's all-time winningest basketball program.
His base pay is listed at just $400,000 per year, but his guaranteed compensation actually is $3.7 million in his first season when marketing, broadcasting and endorsement payments are added.
The Wildcats paid Memphis $200,000 as part of Calipari's buyout of his Tigers' contract, which had paid him $2.35 million per year.
Including $3 million in retention bonuses he'll get for staying with Kentucky through March 31, 2016, Calipari is in line to receive an average of $4 million a year over the eight years.
The deal also gives Calipari:
• Two "late model, quality automobiles," plus mileage.
• Membership in a country club of his choice, including monthly dues and initiation fees.
• 20 prime "lower-level" season tickets to UK home games.
• Eight tickets for each UK home football game.
• Hundreds of thousands of dollars in incentives for reaching certain milestones, such as a 75 percent graduation rate or better ($50,000), winning the Southeastern Conference ($50,000), winning the SEC tournament ($50,000), making the NCAA tournament round of 16 ($100,000), making the Final Four ($175,000), or winning the national title ($375,000).
• The right to income from conducting basketball camps using UK facilities.
Should the university fire Calipari without cause, he would still receive $3 million for each year left on the contract, double the annual buyout former Kentucky coach Billy Gillispie says he is entitled to under his memorandum of understanding.
The rich contract comes at a time when tuition rates have spiked at the university and state higher education funds have shrunk. UK officials defended the salary package by saying the athletics budget is completely separate from the academic side, and a successful basketball program pays for itself several times over.
"If I went through and paid a coach $1.5 million and I didn't get the right guy, there would be people mad at me on that side," Athletics Director Mitch Barnhart said. "If I got one of the more expensive contracts in the country, I'm going to get it from that side. We're the pre-eminent basketball program in the country, and if we want a premier coach, then that's what it takes to get it done."
Florida coach Billy Donovan, who Kentucky courted for its coaching vacancy two years earlier, was believed to have the previous high salary for a college basketball coach, with $3.5 million a year. After winning last year's NCAA title, Kansas' Bill Self signed a 10-year, $30 million deal.
Alabama football coach Nick Saban's eight-year, $32 million deal in 2007 includes private use of a university airplane, two cars and a country club membership. Like Kentucky, the money is covered by athletic department revenue, and not -- directly at least -- by taxpayers.
Such is the trend in landing the people to lead the most prominent major college programs, but even some supporters of the Calipari hire say the trend is troubling.
"This thing has been an arms race for years," said former UK star Larry Conley, now a broadcaster. "Doesn't seem to have an end to it. Whether it's coaches' salary, practice facilities, it continues to escalate. At some point, you've got to have an end."
Few seem to be arguing that the investment in Calipari won't reap financial benefits, assuming he returns Kentucky to prominence.
Kim Bucci, director of sponsorship sales at IMG College, which handles marketing for UK's TV and radio network, says there is so much buzz around the Calipari hiring that she expects marketing deals beyond what it has now. Those deals include a local bank, phone company, car dealership and state highway department.
"His personality lends to business entities wanting to associate with the brand of UK basketball and the personality of John Calipari," Bucci said.
Rob Mullens, UK's associate athletics director who helped negotiate Calipari's deal, said the university also has direct contracts with Nike and Gatorade not related to the broadcast rights. An energetic new coach will only help those, Mullens said.
"We guarantee everything in there, so anything that happens on the top line really does not have a direct correlation to what happens on the bottom line," Mullens said.
In fact, he said, the athletics department -- largely thanks to the revenue generators of football and men's basketball -- gives back more than $1 million each year to the academic side for scholarships and other programs.
Still, through a series of budget cuts, state funding for Kentucky's public schools has been slashed by 7.2 percent, or about $78 million, in the last two fiscal years ending June 30.
UK has lost approximately $24.8 million in state funding in that time, according to the Kentucky Council on Postsecondary Education. In-state tuition rates are going up 5 percent next year, after spiking 9 percent each of the previous two years.
"It's always tough when you talk about money," said Dermonti Dawson, a Hall of Fame offensive lineman for the Pittsburgh Steelers who is a member of the UK board of trustees. "People feel coaches are overpaid. But if you want to get a coach in here with good character and recruiting and able to rebuild the program, sometimes you have to step out and pay more than what you normally would."
The latest federal data shows Kentucky's men's basketball team produced $14.9 million in revenue in 2007-08, with expenses of $8.6 million. The football team and men's basketball team account for virtually all of the $41 million in revenue produced by Kentucky sports teams, with their profits helping cover the bill for the rest of the athletic program.
The most recent NCAA gender equity report, which covers data from 2005-2006, put the average Division I head basketball coach's salary at $409,600 for men and $187,300 for women.
Even those figures would have been quite suitable for former UK coach Joe B. Hall, who says he got a raise to $40,000 after leading the team to the 1978 national title. Hall acknowledges it was a different world then.
"It wasn't like it is now where you can get lifetime security in one year," Hall said.