[Rosiak's Blog] Tom Crean's Indiana contract

[ToddRosiakSays]

Tom Crean's Indiana contract

Written by: Don Walker


Some Web sites as well as other media have been reporting on various aspects of former Marquette University coach Tom Crean's new deal with Indiana University.

Of most interest to Marquette fans is the buyout Indiana agreed to pay to Crean. The bottom line is the buyout was originally supposed to be $525,000, but was increased to $650,000.

A copy of the "memorandum of understanding" between Crean and Indiana shows that the original agreement stated that Marquette's contract with Crean called for Crean to pay "liquidated damages upon the termination of your contract." The memorandum of understanding goes on to say that Indiana agrees to pay Crean $525,000. "In the event this amount is deemed to be income, you will be responsible for any associated tax consequences," the memorandum of understanding states.

What's interesting is that $525,000 was changed to $650,000. The memorandum of understanding has an initial on the buyout clause that could be either Tom Crean or Rick Greenspan, Indiana's athletic director.

An Indiana athletic department spokesman could not confirm which person initialed the change to $650,000.

Steve Cottingham, Marquette's athletic director, declined to confirm the exact buyout number, but said this week that it was a six-figure amount. The memorandum of understanding appears to confirm that.

According to the deal, Crean will earn a base salary of $600,000, and an additional $1.4 million in marketing and personal appearance money in the first year.

Crean also will be eligible for a $250,000 bonus if his team wins the national championship and $125,000 if his team makes the Final Four.

Crean would owe $3 million if he resigns in the first three years of the eight-year deal. The amount lowers to $2 million in years four and five. It would be $1 million the last three years of the deal.



http://blogs.jsonline.com/muhoops/archive/2008/04/10/tom-crean-s-indiana-contract.aspx

[tower912]

$650 K?    Hell, PRN would have paid that much to get rid of him 2 weeks ago.   

[ATWizJr]

hell, before the ignore button I would have paid 650K to get rid of PRN.

[Litehouse]

This sounds like the same document that was floating around before.  It only said Indiana would pay a max of $650k toward the buy-out.  If didn't actually say what the buy-out was.  If it was more then $650k Crean had to pay the rest out of pocket.  Walker is reading a little into it here.

[rocky_warrior]

hell, before the ignore button I would have paid 650K to get rid of PRN.

So, now that you've been teased by it, I could take it away and get you to set up a little MUScoop trust fund, eh?   

[ChicosBailBonds]

At the end of the day, that is a ridiculously low buyout....too low.

[Tribby]

hell, before the ignore button I would have paid 650K to get rid of PRN.

Ditto. That was a feature that was way too long coming.

[77ncaachamps]

At the end of the day, that is a ridiculously low buyout....too low.

Yup. Especially if we wanted to keep him.

But I guess MU wasn't that serious (or didn't anticipate his market value).

You could look at it two ways:

Either MU was too stupid to place a higher buyout, or IU was too stupid to pay so much for him.

[Phi Iota Gamma 84]

At the end of the day, that is a ridiculously low buyout....too low.

I thought this was referring to ATWiz buyout to ignore prn

[muPARTY]

At the end of the day, that is a ridiculously low buyout....too low.

i said it in another thread, it shows that Crean had no intention on staying here for the long term. 

Miller's buyout @ Xavier is reported to be $1mil, (if memory from ESPN serves) Lowery @ SIU was around $850,000 when he reupped a couple years back.

he's quoted as saying he was happy to have a $3mil penalty included in his IU deal if he was to leave, because it shows he wanted to stay.

but (this is simply speculation on my part) he signs a new extention here a year or two ago and his buyout is $525,000 or $650,000.  i find it hard to believe that MU wouldn't have wanted a higher buyout, definately something in the $1,000,000+ (consiering the years left and his salary).  99% sure TC negoiated it that way because a buyout that was $525,000 or $650,000 looks better to schools that might want to hire him rather than a seven figure buyout.

hence, he knew he wasn't here for the long haul.

[MUCam]

If it truly was a six digit figure, someone got absolutely jobbed by Crean's agent. That someone is MU.

Terrible negotiating. You give the guy an extension and the best you get is a six digit buy out? Even if that six digit number is $999,999, that is less than 10% of the total remaining contract worth. That is embarrassingly low.

[lurch91]

When did Crean sign his last extension?

If he was still working on the extension he signed after the 2003 season, the buyout doesn't surprise me.  All buyouts decline over time (IU's buyout with Crean decreases from $3mill to $1mill over time).

But if his last extension was within the last 2 years, the low buyout is inexcusable.  It should have started at $2mill in the first 5 years and then declined after that.

[Litehouse]

He signed his last extension in Sep. 2006 that extended the contract through the 2016-2017 season.

[muPARTY]

i think the extention was signed after the '06 NCAA appearance.

i can just see Crean saying something like 'i won't sign if the buyout is that high.  but don't worry, milwaukee is my home and i would never leave this program.'

Crean knew he had the power both in the negotiation and in the athletic department overall.  not to mention that he had everyone guzzling the TC Kool-Aid (many on these boards too... many), so whatever he did he would not come across as the villian.  he maybe an ass, an overrated/paid coach, but the man's not dumb.

[Tugg Speedman]

Do we know if the buyout was a blanket number for all schools?  Or was it $650,000 for a certain list of schools and a different number for other schools.

Maybe Crean had a seven plus figure buyout for everyone and $650,000 for Michigan State, IU, UNC, Duke, Kentucky, UCLA etc.

This is not unheard of.  I remember Low Holtz having a big buyout in his Minnesota contract but ZERO if he left for ND.

[Marquette84]

When did Crean sign his last extension?

If he was still working on the extension he signed after the 2003 season, the buyout doesn't surprise me.  All buyouts decline over time (IU's buyout with Crean decreases from $3mill to $1mill over time).

But if his last extension was within the last 2 years, the low buyout is inexcusable.  It should have started at $2mill in the first 5 years and then declined after that.

If only we had an experienced AD in 2006 when Crean's contract was renewed. 


The renewal of Tom Crean's contract was Bill Cords' final major accomplishment before he announced his retirement.

We can conclude one of two things:

1.  Given Cords experience and deep knowledge, he knew that a six figure buyout was as good as we were going to get given the circumstances.

2.  Cords was incompetent. 

I'm going with the former.