Colorado State president could reduce McElwain's buyout
The $7.5 million buyout in Jim McElwain's contract isn't as firm as it might appear.
There's a provision that allows CSU President Tony Frank to reduce or eliminate the fee for "extenuating circumstances," should McElwain voluntarily step down as CSU's football coach before his five-year contract is up.
Numerous reports coming out Florida and local blogs the past two days have suggested that Florida athletic director Jeremy Foley, who visited McElwain in Fort Collins on Tuesday, is trying to negotiate a reduction in the buyout, possibly by agreeing to play a nonconference game against the Rams at a future date. Colorado State University earned $1.5 million for playing a game last year at Alabama.
Former CSU athletic director Jack Graham, who drafted the contract extension that McElwain signed June 6, told the Coloradoan, which initiated contact, that he wouldn't be surprised if there is a discussion taking place about reducing the buyout fee that he believed was a critical component of the deal.
The buyout was meant to serve as a deterrent to other schools who might want to hire McElwain away. The contract, Graham said, was structured to guarantee McElwain $15 million over a 10-year period with the opportunity to earn substantially more based upon the performance of the CSU football team. McElwain could earn as much as $2.5 million annually for the duration of his contract if CSU were to be selected as one of the 12 teams participating in one of the six College Football Playoff bowl games. He could earn $2.75 million if the Rams were to win a CFP playoff game.
Graham said the contract was designed so that McElwain would be able to capture a substantial amount of his market value without having to leave CSU. The tradeoff was he had to agree to the $7.5 million breakup fee or five times his salary at the time of his resignation.
It was "irresponsible," Graham said, to guarantee McElwain $15 million over a 10-year period without getting a substantial breakup fee in return.
"Unfortunately in the meeting back in June during which Mac, Tony Frank and I were to sign Mac's employment agreement, Tony agreed to reduce if not eliminate the breakup fee if a 'dream job' were to come along," Graham said Tuesday. "Mac's attorney asked me a number of times if we would carve out Alabama and other top head football coaching jobs from the breakup fee, and I declined to do so.
"I reminded his attorney that the whole purpose of the new employment agreement was to give Mac an opportunity to make a lot of money based on his performance and to give him real security in the form of a 10-year agreement. In exchange, Mac had to agree to a break-up fee that would make it very difficult for him to leave CSU for any other university. I felt it was essential that we do all we could to reduce or eliminate that risk.
"Too often coaches have treated CSU like a stepping stone. The self-esteem issues that creates are very real, and I wanted that to go away. I believed it was essential to our future."
Graham continued:
"Mac's attorney asked Tony if he would agree to waive the breakup fee if the 'dream job' were to come along — his attorney wasn't getting the answer he wanted from me.
"Unfortunately, during the signing meeting, Tony said yes. I was terribly disappointed in Tony's decision to agree to that request. It left the door open for people to go after Mac.
"… Protecting CSU from schools like Florida going after Mac is exactly why we put the breakup fee into his employment agreement. After the 2013 season ended, I foresaw a year like our 2014 season coming, and I wanted to lock up Mac before this year's season began to protect us from this sort of thing.
"With Tony verbally committing to work with Mac to reduce or eliminate the breakup fee, the work we had done was severely compromised if not completely unwound.
"It created opportunities for schools like Florida, Michigan and Nebraska — all arguably 'dream jobs' — to go after Mac."
Attempts to reach Frank through a CSU spokesman for a response went unanswered.
Follow reporter Kelly Lyell at twitter.com/KellyLyell and facebook.com/KellyLyell.news.