Arizona announced new contracts for athletics director Greg Byrne, head football coach Rich Rodriguez and head men's basketball coach Sean Miller on Wednesday, which is noteworthy in an of itself. Rarely does a school get a deal done for each of its three most important sports figures all on the same day. But one clause of the collective contracts tying Byrne, Rodriguez and Miller to the school could prove to be truly revolutionary for college sports moving forward.
The new contracts will pay Byrne a new salary of $625,000 beginning on June 1, and rising $25,000 for every year thereafter up to $725,000 in 2018. Rodriguez's new deal starts at $2 million a year, and Miller will start at $1.5 million, with basic performance and APR bonuses to follow. It's all standard pay for a Pac-12 school.
But page 146 details an additional clause in which an anonymous U of A donor has provided the school with 500,000 shares of a master limited partnership. Of those 500,000 shares, Rodriguez and Miller were both earmarked 175,000 apiece, another 100,000 were placed in Byrne's name, and 50,000 were given to the university. Should each Wildcat remain at the school for eight years, they will be entitled to the full cash value of those shares. On May 12, each share was valued at $35.36, which means Rodriguez and Miller would be in line for a payment of $6.188 million should they remain in Tucson through 2022.
Of course, if the value of our mystery company goes down, the value of those shares will tumble accordingly. But if those shares go up, Byrne, Rodriguez and Miller could be in line for some serious generational wealth.
One more notable detail: Rodriguez has agreed to a buyout of $1 million should he leave before Jan. 15, 2015, and a $500,000 buyout should he depart from Jan. 16, 2015 to Jan. 15, 2016. Those figures double if he leaves for West Virginia. Arizona has offered RichRod a tremendous incentive to stay, while also protecting itself on the back end. Smart.
The best part for Arizona is that the school truly can not lose here (assuming the mystery company remains viable). If the trio remains in Tucson long enough to collect the money, then Arizona has employed three talented individuals for a considerable amount of time. If either Byrne, Rodriguez or Miller leave Arizona, their shares become property of the Wildcats' athletics department. (Should, for example, Byrne be dismissed without cause after four years, he would then be eligible for the cash value of his 100,000 shares over those four years, and the remaining four years would then be at the discretion of his successor.)
Clearly, not every school has a donor base to offer such a creative (and potentially lucrative) contract incentive, but those that can would be wise to pursue this. Today. Arizona can't match the base salary of some of its competitors, but it can now pay Rich Rod potentially more than any coach in college sports - with only $2 million of that sum coming out of its own pocket.
As Andy Staples pointed out last night, Mark Helfrich may soon pass on a cash bonus from Oregon and instead request shares of Nike for bringing the Ducks a national championship. For Stanford and Cal, with numerous alumni tied deeply to Silicon Valley, or Texas and Oklahoma schools already largely funded by donors in the oil and gas industry, this could be the ticket to retaining in-demand coaches at a small price to the university.
If this company becomes the next Google, well, good luck getting Rich Rod out of Wildcat blue.
Below are the terms proposed to the board for Rich Rod's new contract.