Tubby's contract amendment - 2.5 Mil buyout per Doogie (if move made next year)

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so what ! up to 2.5 mil IF terminated Without just cause. Big Deal!
 

"6. The parties agree that at the conclusion of the 201243 basketball season they
shall review and discuss the terms of this Amendment."

So what exactly does this mean?
 

His agent must be the greatest of all time.
 



station19 said:
"6. The parties agree that at the conclusion of the 201243 basketball season they
shall review and discuss the terms of this Amendment."

So what exactly does this mean?
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I suspect it means that if the Gophers have a particularly good season this year, Tubby will likely be asking for a raise and has a gentleman's agreement that the university will consider it and not object to his asking.
 


station19 said:
"6. The parties agree that at the conclusion of the 201243 basketball season they
shall review and discuss the terms of this Amendment."

So what exactly does this mean?
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It is just an industry standard clause. Almost all contracts implicitly or explicitly are to be reviewed annually without any obligation of adjustment.
 



Bruce Weber was entitled to the whole amount of the compensation (while Tubby the half of the compensation) such that the total payment to him at the time of termination was roughly 4 mil for the remainder of the contract, 3 yrs, if I am not mistaken. Had he got fired with two years left on the contract, Weber still would have gotten 2.6 mil, I think.
 

There may be some mistakes on the contract interpretation. If the maximum limit is 2.5 mil regardless of the remainder of the contract -- say, right after the next season -- I would say it is pretty decent for the U.
 

GoFerit said:
There may be some mistakes on the contract interpretation. If the maximum limit is 2.5 mil regardless of the remainder of the contract -- say, right after the next season -- I would say it is pretty decent for the U.
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See my article -- max termination fee is $2.5mm, but it'll only decrease late in the contract and then only to approximately $2.1mm.

Also, Tubby can walk whenever he wants and owe Minnesota $0.

station19 said:
If it means nothing, it wouldn't be in there.
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Believe it or not, contracts often have irrelevant language included in them.
 

Gopher Warrior said:
See my article -- max termination fee is $2.5mm, but it'll only decrease late in the contract and then only to approximately $2.1mm.

Also, Tubby can walk whenever he wants and owe Minnesota $0.



Believe it or not, contracts often have irrelevant language included in them.
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Just admit you don't know what it means.

Meanwhile what is up with the one-way buyout. Sounds like a damn good deal for Tubby.
 



station19 said:
Just admit you don't know what it means.

Meanwhile what is up with the one-way buyout. Sounds like a damn good deal for Tubby.
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It's a good deal for Tubby.

I know that it means nothing. There are no legal ramifications to the clause. Its inclusion has no impact. Sorry, there's nothing more to it.
 

Gopher Warrior said:
Also, Tubby can walk whenever he wants and owe Minnesota $0.
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This should not be much of concern IMO. If he walks away in the midst of mediocrity or failure without costing us a dime, I will welcome it. This just makes sure that Tubby can renegotiate when he gets things done like a Sweet 16 run or a top 3 or 4 finish in the conference next season, and therefore a better future for us. I wouldn't mind the U giving him a better contract if he demonstrated his worth.

The downside of it is that Tubby will continue to dance on outside offers, which is annoying at best.
 

Gopher Warrior said:
See my article -- max termination fee is $2.5mm, but it'll only decrease late in the contract and then only to approximately $2.1mm.

Also, Tubby can walk whenever he wants and owe Minnesota $0.



Believe it or not, contracts often have irrelevant language included in them.
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So do comments on GopherHole.
 

I assume that GW has seen the new contract and has made the interpretations on the termination fee. If so, the contract extension looks satisfactory IMO.

For Tubby, the optimal option in terms of his career management at the moment would be not to sign an extension until the end of the next season. But, that would hurt us as Tubby starts recruiting the prospects whom he has no contract to coach. For us, we want to make sure that Tubby is still a capable coach before we commit financially to him for the long haul.

The extension terms make sure that 1) Tubby still can manage better his career after the next season with the power to renegotiate and 2) we can let him go rather cheaply for 2.5 mil right after the next season -- I assume that we would have had to pay him about that much, had we fired him right now.

Sounds fair to me under the circumstances.
 

GoFerit said:
I assume that GW has seen the new contract and has made the interpretations on the termination fee. If so, the contract extension looks satisfactory IMO.

For Tubby, the optimal option in terms of his career management at the moment would be not to sign an extension until the end of the next season. But, that would hurt us as Tubby starts recruiting the prospects whom he has no contract to coach. For us, we want to make sure that Tubby is still a capable coach before we commit financially to him for the long haul.

The extension terms make sure that 1) Tubby still can manage better his career after the next season with the power to renegotiate and 2) we can let him go rather cheaply for 2.5 mil right after the next season -- I assume that we would have had to pay him about that much, had we fired him right now.

Sounds fair to me under the circumstances.
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I believe the present buy out would have been 1.5 mill.

I believe Tubby had to pay the U if he left early also.....now he has to pay nothing.

Nice extension and pay raise for a coach who has never finished above 500 in the Big Ten(best finish 6th place) and never won an NCAA tournament game here at Minnesota.....in what 5 yrs.
 

station19 said:
I believe the present buy out would have been 1.5 mill.
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I stand corrected on that.

station19 said:
I believe Tubby had to pay the U if he left early also.....now he has to pay nothing.
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If true, IMO the clause of Tubby walking as he pleases, still is not as meaningful as you seem to believe. It just gives him the power to renegotiate on the contingency that he achieves something worthwhile.

station19 said:
Nice extension and pay raise for a coach who has never finished above 500 in the Big Ten(best finish 6th place) and never won an NCAA tournament game here at Minnesota.....in what 5 yrs.
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I am sure that the prospect of the next season gave Tubby more bargaining power than what he might have had based on the past performances. However, do you really think that there is a better option for us than giving him the extension? Or, do you really believe that firing Tubby right now or not extending him now is better than having him on the current extension?
 

GoFerit said:
I stand corrected on that.



If true, IMO the clause of Tubby walking as he pleases, still is not as meaningful as you seem to believe. It just gives him the power to renegotiate on the contingency that he achieves something worthwhile.



I am sure that the prospect of the next season gave Tubby more bargaining power than what he might have had based on the past performances. However, do you really think that there is a better option for us than giving him the extension? Or, do you really believe that firing Tubby right now or not extending him now is better than having him on the current extension?
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I think this will be Tubby's best year at MN - meaning past, present and future.

I know that doesn't answer your question directly, but it best describes my thoughts.
 

GoFerit said:
This should not be much of concern IMO. If he walks away in the midst of mediocrity or failure without costing us a dime, I will welcome it. This just makes sure that Tubby can renegotiate when he gets things done like a Sweet 16 run or a top 3 or 4 finish in the conference next season, and therefore a better future for us. I wouldn't mind the U giving him a better contract if he demonstrated his worth.

The downside of it is that Tubby will continue to dance on outside offers, which is annoying at best.
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Tubby will make in the neighborhood of 2.8 million dollars next season (according to my math and GW's article on the front page) if he finishes in the top 4 of the conference and makes it to the sweet 16 (barring a very poor year on the academic front). I don't see how Tubby is in a position to ask for more than that type of compensation for one good (not great) season. I really don't understand the hold up on this contract as it seems like the "U" caved on almost every issue: the buyout is raised, Tubby gets a slight raise, Tubby gets more in incentives, Tubby owes "U" nothing if he leaves (agree that the last "issue" is not likely to be of concern).
 

station19 said:
If it means nothing, it wouldn't be in there.
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It may not legally mean much, but it's an acknowledgement that they dithered around for 2 years on this, so by next Spring they will basically be back where they started negotiating this in 2010.

I see that GW was 'correcting' Reusee and co. on Twitter about the contract as well. Clearly the U should run any releases regarding legal or contract matters through GW prior to release, as no one else seems to be able interpret things correctly. :cool:
 

station19 said:
I think this will be Tubby's best year at MN - meaning past, present and future.

I know that doesn't answer your question directly, but it best describes my thoughts.
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I can appreciate that. I don't think your view is unrealistic. But, we don’t know for sure the most realistic outcome at this moment, which is why we need to make the decision considering all contingencies. The extension terms basically outline with flexibility our options facing each contingency and therefore IMO minimize the risk.

I do realize that the extension and its terms may not be ideal for us from a certain angle. Nonetheless, we sometimes need to choose a lesser evil. Extending Tubby on the current terms is to pick a lesser evil by acknowledging the objective reality (including that Tubby still had an upper-hand in terms of leverage) that there may not be a better option for us without assuming a huge risk.

I am sure some local media people will cry about the extension terms without acknowledging the objective reality we are facing. They are not the decision makers and have the luxury of selective perception. I think the U did the right thing given the circumstances. Actually, I had been thinking for worse, which was why I suspected about the max buy-out payment.
 

EG#9 said:
Tubby will make in the neighborhood of 2.8 million dollars next season (according to my math and GW's article on the front page) if he finishes in the top 4 of the conference and makes it to the sweet 16 (barring a very poor year on the academic front). I don't see how Tubby is in a position to ask for more than that type of compensation for one good (not great) season. I really don't understand the hold up on this contract as it seems like the "U" caved on almost every issue: the buyout is raised, Tubby gets a slight raise, Tubby gets more in incentives, Tubby owes "U" nothing if he leaves (agree that the last "issue" is not likely to be of concern).
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Negotiation is a power game based on leverage differential between parties rather than based on what one intrinsically deserves. Tubby can get the money because 1) Tubby had more leverage than the U and 2) we have no better option unless we are willing to take a huge risk right now by either firing him or letting him go without an extension next season.

To me, it is not about how much Tubby intrinsically deserves. It is about how to make the best out of a bad situation for us taking into consideration that Tubby has a bit better hand. It is a fair game for all.
 

howeda7 said:
It may not legally mean much, but it's an acknowledgement that they dithered around for 2 years on this, so by next Spring they will basically be back where they started negotiating this in 2010.
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We don't know that. We could either finish 6th in the conference and win no more than one game at the Dance, the most likely outcome in my very subjective view. We could possibly finish 7th or 8th in the conference and not making the Dance. Tubby will have no bargaining power in those cases.
 

howeda7 said:
I see that GW was 'correcting' Reusee and co. on Twitter about the contract as well. Clearly the U should run any releases regarding legal or contract matters through GW prior to release, as no one else seems to be able interpret things correctly. :cool:
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Well, cripes - the article on 1500espn.com says, "Under the deal, Smith will receive a base salary of $1.2 million per year through April 30, 2017. Smith's supplemental income is up $50,000 per year."

Prior to the amendment, Tubby was no longer on the hook if he left early (although he was earlier in the contract). It's typical to see a lower termination fee that a coach owes a school for leaving and it often drops to zero at some point in the agreement... but, one that stays steady and only drops slightly over a revised 5-year deal is not the norm. Tubby got a decent deal here. The U put themselves into a tough position by talking about an extension long before they needed to.

Hopefully the team starts winning and recruiting and the buyout stuff is never realized.
 

GoFerit said:
Negotiation is a power game based on leverage differential between parties rather than based on what one intrinsically deserves. Tubby can get the money because 1) Tubby had more leverage than the U and 2) we have no better option unless we are willing to take a huge risk right now by either firing him or letting him go without an extension next season.

To me, it is not about how much Tubby intrinsically deserves. It is about how to make the best out of a bad situation for us taking into consideration that Tubby has a bit better hand. It is a fair game for all.
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I come at it more from the angle that the "U" (IMHO) is horrible at negotiation and does not use the leverage it has to come up with a contract that can be viewed in a favorable light from its side. Tubby is coming off two very bad conferences seasons, has a losing Big Ten record, and has not won an NCAA tournament game in 5 seasons. Combine the on court performance with his age and prior contract, and who is going to exceed that deal? I don't believe the "U" had much reason to worry that another school would have come calling on Tubby after the 2012 season.
 

EG#9 said:
I come at it more from the angle that the "U" (IMHO) is horrible at negotiation and does not use the leverage it has to come up with a contract that can be viewed in a favorable light from its side. Tubby is coming off two very bad conferences seasons, has a losing Big Ten record, and has not won an NCAA tournament game in 5 seasons. Combine the on court performance with his age and prior contract, and who is going to exceed that deal? I don't believe the "U" had much reason to worry that another school would have come calling on Tubby after the 2012 season.
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If Tubby doesn’t want to sign your offer, whatever you think is attainable, then what? Which side, Tubby or us, do you think has more to lose if he doesn’t sign an extension and wait till the end of the next season?

As long as we make the Dance next season, Tubby can get a deal elsewhere that is far sweeter than your offer and move on. Barring any meaningful roster depletion, we will very likely make the Dance next season.

The implication of Tubby not signing an extension now is that he is a damaged good in the recruiting trail “at least” for the 2014 class for which he has no contract. The less than optimal recruiting, however, shouldn’t be much of concern to Tubby because it is very likely that he will be long gone. But, the poor recruiting will matter to us. In other words, we have more to lose than Tubby without any extension. Tubby has more leverage than the U, far more than you think he does. I agree, though you do not, with the U that giving him the extension accounting for all contingencies is less expensive financially and in terms of long term health of the program.

BTW, despite all the happenings here, LSU was still interested in Tubby. For his market value, Tubby still can be a good business at least in the short run for many programs in a slump, which is why LSU made the approach.

My guess is that the LSU offer would be better than ours financially because our compensation seems like the minimum. Tubby did not take it because I am sure it was still good enough for him, and he believed that he would have far better options after the next season. In other words, he weighed flexibility (or the power to renegotiate) more heavily for his decision to sign the extension. I think that was a reasonable trade-off.

P.S. For stock valuation, the future income/profit stream for a stock is a major part of the valuation of a stock. The past performance is not a sole criterion. Unlike stock valuation, the past performance is still important in our case, but the future prospect is similarly valid.
 



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