The price of failure: Husker football’s 3-year revolving door may cost $16.4 million in payouts to coaches, A.D.

November 19, 2017

Three years after dumping Bo Pelini, the University of Nebraska-Lincoln may be preparing to fire head coach Mike Riley, and the Huskers might soon pay each for his absence.

If and when Riley is replaced, UNL will be paying three current and former football coaches and two athletic directors, all at once.

The cost of the Huskers’ three-year football funk could reach $16.4 million, including potential payments to Riley and ongoing payments to former athletic director Shawn Eichorst and Pelini. The total includes payouts already made to Pelini’s assistant coaches.

But $16.4 million doesn’t include possible payments to Riley’s assistant coaches, some or all of whom will leave if Riley is released.

This comes just 10 years after the failed experiment involving coach Bill Callahan and then-athletic director Steve Pederson, who received payouts totaling about $5.3 million.

Welcome to the pure and innocent world of amateur football at nonprofit American institutions of higher education.

Big-time college football remains exceedingly popular and lucrative in Nebraska and elsewhere. To chase success, colleges are almost obligated to sign high-dollar coaching contracts.

The demand for titles often compels college leaders to make costly changes, swallowing millions in payroll expenses. They desire a coach with a dazzling playbook and a magnetic recruiting touch.

Few Nebraskans question the importance of Husker football to its fans, alumni, the university and the state.

Shelley Zaborowski, executive director of the Nebraska Alumni Association, said Husker football is a shared passion across Nebraska.

“That big red ‘N’ is synonymous with the state,” Zaborowski said. “It’s part of the fabric of who we are.”

Games lure back thousands of people who have moved out of state, she said. Husker football boosts the revenues of hotels, restaurants, gas stations and shops in the Lincoln area, she said.

NU Regents Chairman Bob Whitehouse of Papillion said the Huskers are “perceived as the front door to the university, thus it’s our obligation to put forth the very best product we possibly can for our school and the public.”

That explains why colleges are willing to admit their hiring mistakes and move on from a coach who they continue to pay. It remains to be seen whether Riley, after a disappointing season, will join Callahan and Pelini in the ranks of fired Husker head coaches. His contract calls for him to make $6.6 million more.

The payouts for ex-football coaches aren’t unique to Nebraska.

Coach Butch Jones, who was just fired at the University of Tennessee, can get up to $8.26 million in payouts, according to a Tennessee spokesman. That amount will diminish commensurately if Jones gets another job. Many of the Huskers’ contracts have similar provisions.

Louisiana State’s Les Miles, released last year, has $8 million in payouts due him, LSU said.

And USA Today reported this year that Notre Dame paid close to $19 million to Charlie Weis, who was fired in 2009.

Some fired coaches go on to succeed elsewhere, even as their former employers continue to pay them.

Mark Richt, currently coach at Miami, is still owed $2.17 million by Georgia, which fired him in 2015. Richt’s Miami team last week hammered Notre Dame, which was ranked third in the nation at the time.

Meanwhile, Pelini landed a job as head coach at Youngstown State in December 2014, and in his first year there was paid about $264,000 in base salary and marketing compensation, according to a UNL document. UNL provides the bulk of his salary income — $128,009 per month, or more than $1.5 million a year — and those installments will continue until February 2019.

His son Patrick, a walk-on freshman this year with the Fighting Irish football team, issued a “shoutout” to Wisconsin last year after it beat the Huskers. He gave a kindly shoutout to the Huskers, too, “for the payment of the college education for me & my siblings.” He removed the tweet a short time later.

In major college football, head coaching contracts tend to extend four years into the future with annual rollovers to shield programs from negative recruiting by rivals. Recruits want to feel some confidence that the man selling them on the program will remain there through the player’s career.

College athletic contracts typically require people to strive to get a “substantially comparable” job to continue receiving the payouts from the institution that fired them. Such provisions were included in contracts for Riley and Eichorst.

Universities also typically have some protection from coaches and athletic directors who resign early. UNL Athletic Director Bill Moos’ contract, for instance, says he would pay $2 million if he resigns before 2018 and $1 million if he resigns before 2020. Riley’s contract says he would pay $1 million if he resigned for another job in college or pro football.

The contracts are sort of prenuptial agreements on steroids. In the corporate world, too, companies sometimes make huge payouts to chief executive officers they no longer want.

“There comes a time when (corporate) boards decide they’re going to go in a different direction,” said Anthony Hendrickson, dean of Creighton University’s Heider College of Business. “We all make plans, but not all the plans work out the way we drew them up on the chalkboard.”

Hendrickson said that in some cases “we’re talking about tens of millions of dollars in compensation for executives” who have been fired.

Although many fans are convinced they could do the jobs better, the truth is that running athletic departments well and coaching with excellence requires rare skill.

“It’s not a big pool of people,” UNL Chancellor Ronnie Green said Friday. “You’ve got to be competitive to get the people, the top-flight people. ... So contracts have become more and more and more competitive.”

Coaching college football wasn’t always so lucrative. Longtime Husker coach Tom Osborne’s salary was $24,000 in 1973, which equals about $133,331 today when adjusted for inflation.

Legendary Ohio State coach Woody Hayes made $12,500 in 1951 — $118,588 when adjusted for inflation.

Frank Solich, who was fired as the Huskers’ football coach in 2003, received a $786,693 buyout, according to reports at that time.

It’s not just football where payouts have escalated. Former Husker women’s basketball coach Connie Yori, who was investigated by UNL in 2016 for her treatment of players and staffers, resigned and was to receive a settlement of $1.1 million.

Doc Sadler, fired as Husker men’s basketball coach in 2012, had a potential buyout of $3.4 million. That was trimmed when he took over as director of basketball operations at Kansas. He is now head coach at Southern Mississippi.

Football has been able to pay the costs because of television revenues and other income, said Richard Vedder, emeritus professor of economics at Ohio University.

UNL, for instance, expects to receive $51 million as a member of the Big Ten this year. Much of that money comes from television contracts.

Husker sports put $10 million into UNL academics, among the most in the nation. And UNL has one of the few athletic departments that doesn’t require university, taxpayer or student-fee subsidies. NU Foundation money is included in UNL athletic department funds and typically helps cover scholarships, travel, academic support and other things.

Regardless, the payouts continue, and Vedder questions whether big-time college football can plow ahead without big problems.

The concussion dilemma and other health concerns could eat away at football’s popularity, Vedder said. Further, many schools are losing money on sports, he said. And there’s flat or declining taxpayer funding for colleges in general, he said, and enrollments are stagnant.

“There’s just too many clouds on the horizon,” Vedder said.

Donna Lopiano, president of Connecticut-based consulting firm Sports Management Resources, said colleges can spend on coaches and athletic directors because other labor costs are so low — mainly scholarships for the players.

“What it means is you’ve got more money to pay out,” Lopiano said. She said she believes changes will have to be made by Congress “because the NCAA is not going to reform itself from within.”

NU Regent Hal Daub of Omaha said regents don’t negotiate contracts or hire coaches.

“I really would like to get out of the mode of paying for failed performance,” he said of the payouts to fired coaches and athletic directors.

“I understand that you can say that’s what you’ve got to do to hire the best,” Daub said. “How are we going to wrestle with that cost creep, that escalation?”

That said, Daub acknowledged that Husker football is “a very precious brand” that should be “cherished.”

“The blood that runs in the veins of Nebraskans is Cornhusker red,” he said. “We expect to win. And I think we need to get our winning attitude back.”

World-Herald chief librarian Sheritha Jones contributed to this report.

rick.ruggles@owh.com, 402-444-1123, twitter.com/rickruggles