Smith will get paid $250,000 more over the life of his contract
Minnesota’s contract extension with Gophers basketball coach Tubby Smith will pay him $50,000 more per year in supplemental income over the life of the contract and will increase the price of firing him without just cause (aka a buyout) to $2.5 million. Under the new deal, the University is prevented from firing Smith mid-season, a new addition.
Interestingly, the University also added a clause that dictated that the parties “shall review and discuss the terms of this agreement” again at the end of the 2012-13 season.
The extension, which added three years to his deal that previously ran through the 2013-14 season and now goes through 2016-17, was announced July 23. Smith signed the deal Tuesday, and the full terms of the contract were released on Friday by the university.
The highlights of the terms that have changed since his initial contract was agreed to in 2007:
· Salary: Smiths’ contract is split into two parts: base salary and supplemental salary. His base salary remained the same ($600,000/year plus an annual increase of at least 5 percent a year – meaning he will actually be making roughly $765,000 in base salary for 2012-13 based on those minimum raises -- but his supplemental increased by $50,000/year, going from $1.15 million per year to $1.2 million. This will pay him $250,000 more in supplemental salary over the remaining life of the contract. It also means his overall salary for the 2012-13 season is close to $2 million.
· Buyout: Previous to the new extension, in the scenario in which Smith was fired without cause, the University would have had to pay him a $1.5 million buyout. That had gone down from $2 million a year on May 1. Under the new deal, Minnesota would have to pay him $2.5 million (or half his remaining base + supplemental salary for the rest of the contract if that amount is less than $2.5 million) for firing him without cause. As of now, he has more than $10 million in base + supplemental remaining on his contract, so the $2.5 million buyout is the working figure for at least the next two seasons.
· Can’t fire him during the season: Under a new clause in the deal, the University is unable to fire Smith without cause during a basketball season. Therefore, if the team is playing poorly, the University cannot fire him midseason for poor performance, such as was done with previous coach Dan Monson.
· Everyone is going to review this in a year: Interestingly, Minnesota added a new clause stating “The parties agree that at the conclusion of the 2012-13 basketball season they shall review and discuss the terms of this agreement.” So more changes could be coming.
· Opportunity to get another extension: Smith’s contract would get extended an additional year automatically if the Gophers do any of the following:
a) Win the Big Ten regular-season title
b) Win the Big Ten tournament title
c) Advance to the Sweet Sixteen or better
· Incentives: A lot has changed here. Let’s go through them all:
- Incentive for winning a national championship: increased from $500,000 to $1.5 million.
- Incentive for playing in Final Four: increased from $250,000 to $600,000.
- Incentive for playing in Elite Eight: increased from $75,000 to 300,000.
- Incentive for playing in the Sweet Sixteen: increased from $50,000 to $200,000
- An incentive was added for making it to the second round of the NCAA tournament: $150,000
- Incentive for placing no lower than second or tied for second in the Big Ten: increased from $100,00 to $150,000
- Incentives were added for third or tied for third ($100,000), fourth or tied for fourth ($50,000) in the Big Ten regular-season standings.
- Incentive for Big Ten tournament champion: increased from $100,000 to $250,00
- Incentives were added for the honors of Big Ten Coach of the Year ($100,000) and National Coach of the Year ($100,000)
- Academic Performance incentives were added for APR greater or equal to 970 ($150,000), cumulative team GPA of 2.9 or above ($100,000) and cumulative team GPA of 3.25 or above ($150,000)