Price of a Memorandum of Understanding: $2.98MPosted by rtmsf on October 13th, 2009
Let this be a lesson to all eager-beaver ADs who rush to hire a hot new coach before taking the appropriate amount of time to ensure that the contract they want has all the Is dotted and the Ts crossed.
We all know the story by now. Kentucky AD Mitch Barnhart hired then-Texas A&M coach Billy Gillispie to a seven-year deal at over $2.3M per year one day after he interviewed for the position in early April 2007. To make things official, Gillispie signed a three-page ‘memorandum of understanding’ that outlined his salary and general expectations to that effect, with the caveat that the two parties would come to a final agreement on terms and conditions within sixty days.
Well, that sixty days turned into nearly 700 days, as Gillispie never signed a contract with UK in the two years he coached there. Over time, as Gillispie repeatedly refused to come to an agreement with Kentucky that would clearly define expectations, it was clear that he was relying on the vague language in the MOU to protect him as he increasingly came under fire for bizarre off-court behavior and questionable game decisionmaking. When he sued the school for a $6M buyout soon after his firing in spring 2009, it was obvious to most observers that UK would have to make some kind of payment to Gillispie. The only question was how much would he get? We got our answer today, as UK announced the results of a mediation with Gillispie:
In a statement, the university said the lawsuits were settled through mediation. The agreement, signed Tuesday, said Gillispie would receive a little more than $2.98 million. About $260,000 will be paid by the university for attorney’s fees, as well as about $5,600 in mediation fees.
It’s very instructive that when Kentucky signed new coach John Calipari in March 2009 to a $32M, 8-year deal, the contract was written in standard boilerplate legal language and was twenty pages in length. Looks like Barnhart learned his lesson this time around, but his amateurish mistake in 2007 will end up costing the school an extra $3M, money that could have been better spent paying those high-priced UK attorneys to send over the template a little sooner.