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EXTENSION TALK: Georgetown’s Coaching Contract Details May Drive Employment Decisions

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Reports of an extension have Hoyas fans questioning about ‘buyouts’ and ‘guarantees’

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TCU v Georgetown Photo by Mitchell Layton/Getty Images

After the 15th BIG EAST loss and little hope of a turnaround for this season, many fans are joining in a call for a change in leadership. As of right now, it seems that the current head coach seems to be planning to remain in the position. Now, with Jon Rothstein recently confirming a contract extension after last season, and Tony Kornheiser’s podcast guests voicing their observations on the rough Hoyas season, Georgetown fans are seeing a complicated situation coming to a head.

There is plenty of speculation about who will make the ultimate decision about the head coach’s employment—the athletic director, the president, the Board, a shadow administration in McDonough, etc. It seems that several journalists think it will come down to the head coach, himself.

During the February 21, 2022 episode of the Tony Kornheiser Show, Kornheiser talks to both Michael Wilbon and Georgetown alumnus Chris Cillizza about the Hoyas’ season. Wilbon notes that he has covered Patrick Ewing since he was a teenager, and still sends him a text after tough losses—they’re all tough losses at this point. Ewing calls or texts him back, appreciatively. Around the 28:40 mark of the episode, Wilbon noted that he didn’t believe there was any clamor to fire him but acknowledges that nobody knows what to do.

Chris Cillizza, at about the 45:40 mark of Kornheiser’s episode, said that if the Hoyas don’t win at home against DePaul on Thursday, he doesn’t see how Ewing keeps his job, before backtracking a bit. Cillizan and Kornheiser agreed that “Georgetown cannot fire Ewing” and that “whatever the duration [of the contract] is ... if he wants it, he’ll get it” because, ultimately, with what he did as a player and ambassador for the University, “you can’t fire him.” Kornheiser suggested to Wilbon off-handedly that Ewing might be “looking at assistant jobs” because right now, what’s going on at Georgetown “it doesn’t work ... it’s no good.” Wilbon agreed, and added that “because he has conducted himself the way he has, he will be fine ... people will say ‘come work for me.’”

Perhaps they’re right and the emotional attachment is indeed the main guide for decisions at Georgetown. But with recent re-confirmation of the extension given last year, the economics of the situation seem like they might play a significant part. Of course, respecting the top-75 NBA player is a priority, but Georgetown is known more for delaying and over-planning than spontaneity. They might see less risk in waiting a year. For some fans, the question is whether Georgetown can afford to fire and hire a new coach; for others, the question is whether Georgetown basketball can afford not to.

A financial discussion may seem less abstract with some concrete, yet estimated, numbers. Starting with the usual disclaimers—this humble blog contributor does not have any inside information about the finances of the university, the basketball program, or the head coach—we might explore how much it could cost the University. But please remember this is speculation.

Accordingly, a few assumptions based on publicly available information need to be made. For instance, we need a ballpark number for the head coach’s current annual salary. Last year, Hilltop Hoops reported a base salary of $2.6 million for the head coach in 2017-18, increasing $200k each year. An estimate of $3.6 million per year seems fair for 2022-23. That contract, per Hilltop Hoopsreport, would include an original term date of April 4, 2023.

Next, if we believe the reports of a contract extension are true, we need to estimate how much money might be owed. In early February, Zach Braziller of the New York Post mentioned a “contract extension last April,” after the BIG EAST Tournament. Perhaps the bigger question is whether there is a guarantee and/or a “buyout” clause. Jon Rothstein noted that “Exact terms of the extension and how much of it is guaranteed is still unknown.”

Let’s assume there is no guarantee for a minute. For instance, DePaul reportedly had no guarantee or buyout when, in April 2020, they extended Dave Leitao’s prior contract through the end of the 2023-24 season. Of course, we know that ended with dismissing Leitao in March 2021. So, in this case, an extension of the head coach in 2021 might not indicate anything with regards to additional hurdles before firing a head coach.

But what if there is guaranteed money? With regard to Chris Mack and Louisville recently, SI reported that “Mack, who would have been owed a $12 million buyout had he been outright fired, settled for a 4.8 million that will be paid over three years” and that the “separation was framed as a mutual parting of ways by the university.”

Avoiding a buyout can be a huge discount for a program. Recently SB Nation’s DawgSports reported about Tom Crean’s situation at Georgia, noting that a for-cause firing might allow them to avoid the buyout, saying:

Multiple sources have told DawgSports that University of Georgia officials are looking into firing Head Men’s Basketball Coach Tom Crean for cause this evening after he failed to report a physical altercation between two of his assistants to university officials.

News of the incident was reported to HR by someone other than Crean, which is a violation of his contract and could allow Georgia to fire Crean without having to pay his buyout of $3.6 million.

“For cause” is a big clause in coaching contracts. While there is little discussion at Michigan as to whether they move on from Juwan Howard after a televised physical altercation, the punch could potentially trigger a “for cause” firing. Kornheiser and Wilbon suggested anger management for the coach rather than a separation.

Looking a little closer to home, Mark Turgeon reportedly signed a three-year contract extension with Maryland in April 2021 for him to “make $3.3 million for this upcoming season ($750,000 base salary combined with supplemental income of $2,575,000) and that [would] increase by $100,000 each year until the contract’s expiration” in 2025-26.

SB Nation’s Testudo Times also reported that “The school will owe Turgeon $5 million if he is fired before May 1, 2022 and $4.5 million if let go the season after that. From there, the amount decreases $1 million each season.” In December, Testudo Times noted that “Although the decision to part ways was mutual, per the release, Maryland Athletics will honor the terms of the contract including the $5 million buyout, per a team spokesman.”

So, the question is whether Georgetown and their head coach would operate more like DePaul (no guarantee, no buyout) or Maryland. If Georgetown’s annual salary is $3.6 million, that seems more like Maryland ($3.3 million) and a buyout and/or guarantee would probably be in the alleged contract extension. The whispers about a (lack of) potential end-of-year resignation seem to indicate this contract likely carries a guarantee and/or buyout.

Again this is all speculation. Unlike public schools such as Maryland or Georgia, Georgetown’s contracts cannot be accessed via the Freedom of Information Act (FOIA).

Let’s talk about one of the most expensive situations. If Georgetown’s contract is fully guaranteed through 2023-24, firing the head coach would cost the full amount. For instance, at $3.6+ million per year, for two more years, firing the coach might mean paying a total of about $7.5 million guaranteed. If it’s guaranteed for longer, add about $4 million for each year. That would be a super-poor agreement by a university with way too many lawyers on speed dial. But it might have happened.

Assuming there is some type of buyout in the reported extension, the next question is, what makes sense for a buyout figure? A buyout, of course, is likely a pre-negotiated discount from the fully guaranteed amount, e.g., as prescribed in a contract extension. Price-wise, a program might offer a buyout of 25%-50% of the total value of the contract extension. For example, Maryland was paying $3.3 million per year and rising, for a contract extension that was expected to last until 2025-26. That had a buyout of $5 million in the first year. Rather than pay out the full $17.5 million over five years, Maryland paid about 29% as a buyout. Maybe a buyout could be smaller, e.g., approaching DePaul’s number of zero.

Perhaps Georgetown has a clause in the extension where they can buyout the head coach for something like $2.25 million? That would be about 30% of the contract’s estimated value left ($7.5 million). 40% would be about $3 million. Again, we are only estimating the value here and guessing percentages based on recent news of divorcing basketball coaches. Even with an estimation, it’s certainly not chump change.

The next estimate—thanks for bearing with me—might be a salary for the new coach. Based on the names circulating in desired coaches, none of them will be cheap. Can we estimate a price tag of $2 million to $3.5 million? Sure. Why not? I don’t see anyone allowing a discount.

If Georgetown hires a coach at the lower end of that range, e.g., $2 million per year, can they expect a conference record better than, say, 5-15? Maybe. Is it any more likely that a low-end salary guy might perform better than the current coach might next year? Well, they better hope so. Can they pay more and get a guaranteed 8-win coach next year? It doesn’t seem like anyone can guarantee immediate success. It may come down to whether the right people have faith that Georgetown can pick a good program-building coach as a replacement.

So maybe an über-cautious Georgetown administration looks at the potential program-changing choices as (A) staying the course and only paying about $3.8 MM to the current coach for another year versus (B) spending $2.5+ MM on a buyout plus $2+ MM on a new coach and getting very little progress next year? Factor in COVID concerns in the foreseeable future—less fan turnout, fewer donations, more complexity in roster management, potential difficulty to start a program with DC/GU restrictions, etc.—and choosing to “stay the course” might seem even more appealing to some pencil-pushers in McDonough and Healy. This is all to say that firing the head coach could likely cost millions of dollars and a university might be scared to risk that type of money instead of waiting a year.

That’s not even factoring in an emotionally volatile situation of firing a legendary player and the potentially embarrassing headlines the would draw attention to it. Waiting a year, saving the money, and letting the coach leave on his own terms might be the most cautious, financially prudent, and empathetic choice in the eyes of many fans and administrators. It’s certainly easier and less stressful to not make a change.

I know what you’re probably thinking: “Georgetown should not have entered into a contract they couldn’t afford to get out from.” Well, that might be true, but neither contracting party, nor anyone else in the world, thought Georgetown would be playing this poorly a few months after a BIG EAST Championship. No one thought 0-for in the conference. Moreover, the original contract was reported to be good until April 2023, so it may have already been guaranteed. There was probably thought to be very little risk in having a large buyout (or guarantee) for the first year because of the BET and the top-10 recruiting class. No one expected a perfect storm of young guys at Georgetown, older players elsewhere, COVID restrictions and delays for practice and games, disciplinary issues with a transfer, injuries, and much more to further exacerbate an expected year of development. Hindsight, of course, reveals otherwise.

I know what else you might be thinking: “Georgetown has an endowment of $2.6 billion and an operating budget of $1.5 billion, a buyout would be peanuts.” Perhaps. But institution money is not fungible and budgets are committed long in advance. Donations could potentially be quickly rallied for a buyout, but there are many moving pieces to funding something like this. Whether those pieces are beginning to move behind the scenes, your guess is as good as mine. But my guess is that everyone’s just waiting and waiting.

The head coach implies the program has some more of its best days still ahead, and with him at the helm, no less. This could be a genuine desire to return, or maybe it’s posturing to bolster his financial position for an exit. It’s hard to assume the worst, but John Thompson and David Falk surely have imparted their financial shrewdness. Either way, fans need to prepare themselves in case of his return for 2022-23 and, potentially, beyond.

The other side of the equation is whether the program can continue this path with the current leadership. Of course it can’t. The perimeter defense is awful, the rushed offense is turnover prone, and roster retention is a disaster. With more national media outlets covering the situation, and a win-loss record that speaks louder than any blog or tweeting, the hole is deep and might still be getting deeper.

It doesn’t sound like the coach will bail them out with an easy exit. Georgetown has some decisions to make—the sooner, the better.