Living in Columbus, Ohio, it’s hard not to be inspired by the pageantry, excitement and, yes, the big money that is college football. As the BCS championship game for this season approaches (Monday at 8:30 p.m.), I was reminded of an interesting blog post from the sports website “Outkick the Coverage” asking why universities don’t require their football coaches to sign non-compete agreements.
The premise of this intriguing post by Clay Travis, a sports journalist and lawyer, has some appeal. After all, highly-compensated executives are frequently required to sign non-competes, so why shouldn’t high-powered coaches like Nick Saban or Urban Meyer? They run the most important revenue-generating team in the university’s athletic department, control the relationships with key recruits, and are paid tremendous sums for doing so. Nick Saban’s total pay package, for example, could approach $32 million and Fortune magazine has described him as the most powerful coach in all of sports. It certainly seems as if universities (and their fans) are at great risk, since the coaches could move at will, and take their coaching staff and conceivably key recruits with them.
I decided to take my own look at the contracts of a number of prominent college football coaches to see if this was true. Based on my admittedly unscientific sample, I would have to disagree with Clay, as I found a variety of provisions that function as restrictive covenants in the contracts that I reviewed. Although there were no true non-compete provisions, each contract had terms that would significantly impede a coach trying to quickly move to another school without the consent of his former employer.
A couple of disclaimers are in order. I confined my review to the contracts of Nick Saban, Urban Meyer (his Florida contract, as his fully-negotiated Ohio State contract is not yet available), Jim Tressel and Les Miles. Each of these coaches had won a national championship and competed for that prize fairly consistently, so I felt they were good benchmarks. I don’t know whether I uncovered all of the amendments to these contracts (these amendments invariably follow a big bowl win or when another football power expresses interest in that coach); as a result, if any of the contracts have been amended in relevant part, I will leave it to my readers to let me know.
Now to the contracts themselves. First, two of the contracts (Nick Saban’s Alabama contract and Meyer’s Florida contract) had provisions forbidding the coach from recruiting high school athletes that he or the school had contacted for one year after his departure. This clever provision mirrors a restrictive covenant because it would prevent a coach from taking any recruits with him. Recruiting is the lifeblood of any football program and it cannot be effectively delegated to staff, since the head coach may be needed to close the deal with a prized recruit. Since schools like Alabama and Florida contact most if not all of the best athletes nationally, the coach would have a limited number of athletes available to him to recruit at his new school. As a practical matter, this provision would take a coach out of the game for a year and force him to do what Urban Meyer did this past year — work for ESPN or find another job outside coaching.
Second, a number of the contracts have significant buyouts or liquidated damages provisions that would be triggered if the coach left to join another school. For example, Les Miles’ contract has a liquidated damages provision of $1.25 million if he leaves to join the University of Michigan, his alma mater and probably the only real competition for Miles’ services (Miles is the coach of No. 1 LSU and won a championship in 2008). Likewise, former Ohio State coach Jim Tressel’s contract had a $1 million liquidated damages provision that would kick in if he left for another school within six months of any resignation.
To understand the impact of this type of provision, one need only look at what coach Rich Rodriguez and his new employer, the University of Michigan, endured when he left West Virginia University to join Michigan in 2007. West Virginia had negotiated a $4 million buyout with Rodriguez, and it balked at the move and sued him to enforce that provision. Ultimately, Rodriguez and Michigan ended up paying the $4 million. The buyout and resulting contentious litigation proved to be a huge distraction and tarred Rodriguez in the eyes of many influential Michigan supporters. Rodriguez floundered at Michigan and was fired after only three years.
Third, Saban’s contract has a provision protecting the “Confidential Information” of Alabama’s Athletic Department, acknowledging the importance of that information, and stating that Alabama would be entitled to an injunction resulting from the incalculable injury that would arise from the disclosure of that information. As anyone in the trade secret community knows, this type of provision can be used to jam up any departing employee. It is not difficult to imagine how a state court in Tuscaloosa might construe this provision if Saban decided to take his considerable talents to Gainesville or Tallahassee.
To sum up, while I found an interesting blend of novel and conventional approaches, the end result would likely be the same: A coach moving to another school (particularly to a conference rival) would face some real legal obstacles, similar to those presented in many conventional non-compete disputes. College football fans can now breathe easier.