UCLA's deal with Alford has huge buyout clause
JUL 09, 2013 12:44p ET
That's because UCLA's new head basketball coach is bound to the program — and it to him — by a $10.4-million buyout clause worth four times his annual pay.
That stricture, unusually large by college coaching standards, is one of several eye-catching terms in Alford's contract, which had not before been made public but has been released to The Times. Also notable is his signing bonus, which at almost $850,000 is significantly larger than UCLA Athletic Director Dan Guerrero originally indicated it would be.
The huge buyout may have been prompted by the circumstances of Alford's departure from his last job, at the University of New Mexico. Less than two weeks after agreeing to a contract extension in March, the 48-year-old coach backed out, signing with UCLA and triggering a dispute over how much he owed his former employer to buy out his contract.
By saddling Alford with such a large buyout — more than 10 times what it would have been had he stayed at New Mexico — UCLA is essentially making it impossible for him to do to Westwood what he did to Albuquerque.
"They don't want to be used as a steppingstone to some better job," said Mark Levinstein, an attorney at Williams & Connolly in Washington who has represented a number of college and professional coaches in contract negotiations.
The Times requested the contract multiple times in recent months under the California Public Records Act but was told it had not been finalized. Although it is dated March 30, the document was not formally executed until last week, according to UCLA senior associate athletic director Mark Harlan.
Under the final contract terms, Alford will receive $2.6 million a year for seven years, or a total of $18.2 million.
If he quits before April 30, 2016, he must pay the school $10.4 million. That penalty drops each year after that, to $7.8 million, $5.2 million and finally $2.6 million in his final year, ending with the 2018-2019 season.
The contract calls for UCLA to pay Alford the same amounts if he's fired — a mirror-image termination clause that experts in sports law call unusual — so it provides a great degree of job security for the new coach.
"We wanted the commitment to be strong on both sides," Harlan said. "We didn't want him going anywhere."
By comparison, Alford's predecessor, Ben Howland, was entitled to as much as $3.5 million after being fired following the Bruins' early exit from the NCAA tournament in March. Jim Mora, UCLA's football coach, would get a $4.32-million buyout if he were fired before Jan. 16 of next year; if he were instead to quit before that date, he'd have to pay the school $2.5 million.
Crosstown rival USC also hired a basketball coach this spring, picking up Andy Enfield from Florida Gulf Coast University in April. But because USC is a private university, it does not have to reveal its contracts under the Public Records Act.
Alford's agreement with UCLA indicates the coach received an $845,615 signing bonus and specifies it is meant to cover the costs of his early departure from New Mexico. At the time of Alford's signing with UCLA, Guerrero said the bonus would be limited to $200,000, and an athletic department spokesman later told The Times "we did not sweeten the deal," adding that "when Steve signed with us, we agreed we would compensate him for the amount of the buyout, including the tax consequences."
In addition to his annual pay and signing bonus, Alford is eligible for up to $450,000 a year in incentive and retention bonuses at UCLA, including $75,000 for winning the national championship, $20,000 for winning the Pac-12 Conference regular-season title and $150,000 to hold summer and holiday basketball camps.
There is one academic incentive, of $10,000, for achieving a team Academic Progress Rate score of above 925 — the threshold at which teams can be hit with sanctions by the NCAA. In other words, Alford will earn $10,000 a year if the team avoids academic penalties.
UCLA is providing Alford two BMWs, a country club membership and a discounted home loan and will cover the cost of his wife's travel to out-of-town basketball events. Alford is required to use only apparel provided to UCLA, which currently has a contract with Adidas.
Buyout clauses have grown exponentially in recent years as universities have struggled to keep coaches in one place and the leverage of job candidates has increased.
The largest, by far, are in football, where university officials fear that the loss of a coach can devastate an entire program.
Les Miles, football coach at Louisiana State, signed a contract this year that includes a $15-million payout if he's fired in the next three years. Last year, Nick Saban of Alabama signed a contract with a buyout that could be worth as much as $22.5 million, depending on the timing of the departure.
Tax filings show Notre Dame has paid ex-football coach Charlie Weis $10.8 million since he was fired in late 2009, with the potential for $8 million more by the end of 2015.
Basketball coaches, by comparison, tend to have much smaller buyouts.
Billy Donovan, coach at Florida, has a $500,000 clause. Kentucky's John Calipari, the sport's highest-paid coach, can leave for $1 million. Between them, they have three NCAA championships.
According to Levinstein, disputes over buyout clauses are rare, in part because particularly large ones may not stand up in court. "The purpose should be to discourage coaches from leaving, not to generate a windfall," he said.
Just four months after signing a contract extension that included a $4-million buyout clause at West Virginia, football coach Rich Rodriguez bolted for Michigan in late 2007.
West Virginia sued for the buyout and later added a breach-of-contract claim because Rodriguez hadn't paid. The sides eventually settled, with Michigan paying the bulk of the buyout and Rodriguez on the hook for $1.5 million. Three seasons later, Michigan fired Rodriguez after the Wolverines were 15-22 under his direction.
Alford went to New Mexico in 2007 and won 75% of his games at the school, although his postseason appearances were disappointing, including an upset loss to Harvard this year. UCLA approached him after bids to lure Virginia Commonwealth Coach Shaka Smart and Butler coach Brad Stevens were unsuccessful. Stevens later left Butler to coach the Boston Celtics.
The contract Alford coached under during the last season called for a $200,000 buyout if he left New Mexico early. But a term sheet he agreed to before the NCAA tournament extended the contract and increased the buyout to $1 million.
After departing for UCLA, Alford sent New Mexico an email indicating he intended to pay $200,000.
Following negotiation, Alford and New Mexico settled on a figure of $625,000. Of that, $325,000 would come from bonuses and incentives that would no longer be given to Alford, with $300,000 coming in a payment from the coach himself.
What Alford will do with the remaining $545,615 left over from his signing bonus is not specified in the UCLA contract.
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