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PJ Fleck Minnesota contract: buyout, base salary and other details from memorandum of understanding

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Mark Coyle knows how to hire coaches.

The devil is always in the details.

For the most part, Minnesota fans have been very pleased by Minnesota’s hire of P.J. Fleck. The coaching search was executed quickly (approx 65 hours from Claeys fired to Fleck hired), the quality of the candidate hired, and the cost to the University (Fleck’s contract puts him right above the median B1G salary).

Since the hire though news about Fleck’s contract has been fairly muted outside of confirmation of his yearly salary and the length of the agreement. After locating the Memorandum of Understanding (MOU) between the U and Coach Fleck on KSTP’s website, we wanted to delve deeper into some of the key details.

Length

As reported elsewhere for weeks, Coach Fleck’s contract is for 5 years.

Salary

Also as reported elsewhere, Coach Fleck’s yearly salary is $3.5 million a year. Here’s how that amount breaks down:

  • Base salary: Fleck’s base salary is $1 million. This amount will increase by $50,000 each year (i.e. base salary for year 2 of the contract will be $1,050,000, year 3 will be $1,100,000, etc)
  • Supplemental compensation: Fleck will be paid $2.5 million a year for “in recognition of your efforts on behalf of the University for media, fundraising, community involvement, endorsements, apparel, and shoes.”
  • Incentives: Fleck is eligible for academic and performance incentives each year. The amounts of these incentives are not spelled out in the MOU, so we’ll have to wait until the final contract to see how they look.

Buyout

Coach Fleck’s buyout is a set yearly value that is reduced after each year of the contract. It is not a simple (X years times base salary) equation. Instead, each year of the contract is assigned an independent buyout amount. The total owed is the sum of the buyout values for the remaining years on the contract. Here are the yearly amounts owed:

  • Year 1: $3.5 million
  • Year 2: $3.5 million
  • Year 3: $2.5 million
  • Year 4: $1.5 million
  • Year 5: $1.5 million

How does this work in practice? If Fleck is fired after the first 3 years of his contract, the U would owe him the sum of the buyout amount for year 4 ($1.5 million) and year 5 ($1.5 million), for a total buyout of $3 million. If he was fired midway through a contract year (say year 3) then the total would be half of the amount owed for year 3 ($1.25 million) plus the sum of years 4 and 5 ($3 million), for a total buyout of $4.25 million.

Early exit penalties

What happens if Fleck leaves the U for another job? In that case, he is required to pay a buyout equal to the sum of the base salary for the remaining life of the contract. In other words, if he left voluntarily after 3 years he would owe $2 million (or so) to the University.

Contract extensions

The MOU notes that the University and Coach Fleck agree engage in a good faith review of the contract terms and provisions within 60 days of the end of contract year two. In other words, they’re required to talk about changes after 2 years but not required to make changes.

Our Thoughts?

This is a excellent contract and based on what we see here Mark Coyle is the best athletics director the University has had in decades when it comes to coaching hires. Let’s run down a couple of facts:

  1. The University executed a coaching search in less than 3 days without hiring a search firm.
  2. Even though they fired Tracy Claeys after the bowl season, they were able to land one of the most sought after head coaches in the college football marketplace.
  3. They did not overpay for P.J. Fleck. His yearly compensation is not out of line for what the average starting salary for head coach at a Power 5 school and it is just above the median in the Big Ten. The yearly compensation is especially reasonable when you consider Purdue had to give their new HC (who has had less success at a lower level then Fleck) almost as much money for a longer term.
  4. The contract has an excellent buyout. Let’s say the worst happens and Coach Fleck fails badly at Minnesota. The earliest he’d be fired without cause in that scenario is after his 3rd year of employment. In that worst case scenario the U will owe him only $3 million. That’s it. That’s a pittance in the world of big college sports.
  5. If Fleck leaves early the U will receive a reasonable buyout in return. Since leaving Minnesota because of too much success is not a problem we’re familiar with, the U’s benefits in this hypothetical is more than reasonable.

TL;DR

Coach Fleck was a great hire, Mark Coyle is good at hiring coaches, and Fleck’s contract looks great.

What do you think about the contract?