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

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station19 said:
from the comment section.....

rogermaris
Aug. 4, 12
7:17 AM
Should have put in some incentives for designing an in-bounds play at the end of close games that actually has players moving. We could have had Tim Miles for half this money, what a shame.
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Don't ever quote the ST comment section again. Biggest collection of idiots in the state.
 

Gold Vision said:
Don't ever quote the ST comment section again. Biggest collection of idiots in the state.
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+1. Actually the ST comment sections are great for exercising your neck with several repetitions of head shakes.
 


GoFerit said:
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?
Tubby does. Tubby needs to finish in the top 4 and make a run in the NCAA's to garner interest back in his program at Minnesota. If he does that and generates interest from other schools, then Minnesota could always choose to match/exceed that offer (see Dan Monson and Washington). The worst case scenario for Minnesota is Tubby wins the Big Ten and leaves for another job which is incredibly unlikely. On the other hand if Tubby has another losing Big Ten season, where does he go off years of say 6-12, 6-12, 8-10? Who is going to sign Tubby, at his age, to rebuild another program (after his rebuild here failed) for the type of $$$ he has on his new Gopher contract?

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.

Totally disagree. If Tubby simply makes the dance with a .500 Big Ten record, he's not going to get an offer "far sweeter" than his 2011 contract. I think you totally overestimate the number of schools that a). are willing/able to pay a head basketball coach a minimum of $2 million a season and b). are eager to rebuild a program with a coach who will be 62 before he coaches his first game for you.

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.

Tubby has recruited less than optimally for a while now, I don't think the long term health of the program is in good shape as is.

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.

You are (likely) wrong here. Johnny Jones is getting 1.1 million a year at LSU which makes hims the 3rd lowest paid coach in that conference. I am sure Tubby/Ricky Left used LSU as leverage, but that doesn't mean they were willing to meet/exceed his current contract.

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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Future prospects of the Tubby "stock" is part of the reason why I think the "U" did not play it's hand well here. They are already have a stock that has been under performing yet they are going to invest more in it. The stock is likely to rise in value in 2012, but the prospects beyond 2012 don't look strong. The "U" should be aware that recruiting has been going in the wrong direction and that the squad appears to be losing ground to the bottom tier of the conference as opposed to gaining ground on the top tier. If there were signs that the "U" was going to ascend from your projected 2012 season in future years, then I'd have no issue with the deal.
 


EG,

First of all, Tubby did not sign the extension offer the U offered for the last few years. Do you think that Tubby all of sudden got interested in an outside offer that is less attractive than our previous offer and used it against us? We don’t know the details of the offer. But, it is safe to assume that the LSU offer was at least as good. LSU would not have contacted Tubby with an offer less attractive than our previous one.

You underestimate Tubby and his value as a coach since you selectively base your argument on the last two seasons. What about his previous seasons at the U? The 2012-2013 is another to consider when Tubby starts looking elsewhere after the season. Suppose for the sake of argument that we finish top 6 in the conference next season, which would mean top 30 nationally if not top 25 outright. His overall performances at the U will look different. At least, far more favorable than what you are painting based solely on the last two seasons. His overall performance of leading our troubled program will be perceived at least average and “shoulda been much better without the few unlucky events”. And considering the value his name carries to casual fans, he won’t have much trouble moving on.

Yes, Tubby’s recruiting has not been great recently. However, that can change if things get better next season. Do you really believe that our future may not be strong even if we are successful next season? If successful next season, our recruiting, fan support and revenue stream will improve.

Could you please outline what you think would have been acceptable to Tubby? I just want to make sure what it is.
 

GoFerit, I feel like we are coming at this question from two different places. You asked me why I thought the University of Minnesota had leverage in the negotiations and I responded by mentioning the poor record of the past two season and Tubby's age. I am not trying to be "selective" in my approach, but outline an argument as to why the University of Minnesota would not have to give Tubby such a generous extension at this point in time. You refer to the University of Minnesota as "our troubled program" which says a lot about where you and I differ. The University of Minnesota has not been "troubled" for about a decade now and Tubby was more successful when Monson recruits like Nolan, Hoffarber, and DJ played significant roles on his team.

As for my own personal opinion, I feel like Tubby overachieved in years 1 and 2 and year 3 was about average as I expected an NCAA tournament berth by that time. Years 4 and 5 were both significant underachieving years and I felt like Tubby was brought in to contend for a Big Ten title by years 4 and 5 (not necessarily win a title, but be in the mix). I don't think Tubby was brought to Minnesota for a 6th place finish like you outlined above to be considered a "success" in year 6, especially in a "peak" year. Tubby is currently 38-52 in the Big Ten and I would say that 5 years ago I would have guessed that he'd be something like 48-42 or so with fewer wins in years 1 and 2 and at least one 12-6/13-5 type year to his credit. I certainly acknowledge that Tubby has had his share of bad luck at Minnesota, but at the same time I think some go overboard in giving him a pass for the past two seasons. Trevor Mbakwe, for all the good things that he does on the court, is not the go to scorer that Tubby's teams have lacked during his tenure.

I would say that I believe you overestimate that power of the "Tubby Smith" name in college basketball at this point in time. 2004-2005 was the last year a Tubby Smith coached team advanced past the 2nd round of the NCAA tournament or finished above 4th in its conference or finished with better than a 9-7 conference record. The kids he's recruiting now know the Tubby Smith name, but they don't see the results. I posted at the beginning of the past season that I thought last year was crucial for Tubby Smith and that we were on the verge of having Bobby Knight at Texas Tech as our basketball coach. I really feel like we are at (or close to) that point where the fans who believe Tubby Smith is "that guy" are like the Texas Tech fans who believed they had the same guy who coached Indiana.

As for your last question of do I believe the future is strong if Tubby has a successful season? It depends on what "success" is. I don't believe a 6th place Big Ten season (provided it does not come with a deep tournament run) does much to move the needle. If Tubby can get in the top 3 or 4 and finally win a BIG home game or two, then I could see things turning around.
 





BleedGopher said:
FSN analysis: Smith's contract on par with nation's best

http://www.foxsportsnorth.com/08/06...nding_gophers.html?blockID=771795&feedID=5930

Go Gophers!!
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"Smith's $1.965 million salary next year before bonuses is more than the contracts of John Thompson III, Roy Williams, Scott Drew, Frank Martin, Jim Boeheim, Shaka Smart and Mick Cronin, among others, provided last year. Each of those coaches has found more recent success than Smith, yet some, like Smart and Cronin, made little more than half of what Smith will net."
 

EG#9 said:
GoFerit, I feel like we are coming at this question from two different places. You asked me why I thought the University of Minnesota had leverage in the negotiations and I responded by mentioning the poor record of the past two season and Tubby's age. I am not trying to be "selective" in my approach, but outline an argument as to why the University of Minnesota would not have to give Tubby such a generous extension at this point in time. You refer to the University of Minnesota as "our troubled program" which says a lot about where you and I differ. The University of Minnesota has not been "troubled" for about a decade now and Tubby was more successful when Monson recruits like Nolan, Hoffarber, and DJ played significant roles on his team.

As for my own personal opinion, I feel like Tubby overachieved in years 1 and 2 and year 3 was about average as I expected an NCAA tournament berth by that time. Years 4 and 5 were both significant underachieving years and I felt like Tubby was brought in to contend for a Big Ten title by years 4 and 5 (not necessarily win a title, but be in the mix). I don't think Tubby was brought to Minnesota for a 6th place finish like you outlined above to be considered a "success" in year 6, especially in a "peak" year. Tubby is currently 38-52 in the Big Ten and I would say that 5 years ago I would have guessed that he'd be something like 48-42 or so with fewer wins in years 1 and 2 and at least one 12-6/13-5 type year to his credit. I certainly acknowledge that Tubby has had his share of bad luck at Minnesota, but at the same time I think some go overboard in giving him a pass for the past two seasons. Trevor Mbakwe, for all the good things that he does on the court, is not the go to scorer that Tubby's teams have lacked during his tenure.

I would say that I believe you overestimate that power of the "Tubby Smith" name in college basketball at this point in time. 2004-2005 was the last year a Tubby Smith coached team advanced past the 2nd round of the NCAA tournament or finished above 4th in its conference or finished with better than a 9-7 conference record. The kids he's recruiting now know the Tubby Smith name, but they don't see the results. I posted at the beginning of the past season that I thought last year was crucial for Tubby Smith and that we were on the verge of having Bobby Knight at Texas Tech as our basketball coach. I really feel like we are at (or close to) that point where the fans who believe Tubby Smith is "that guy" are like the Texas Tech fans who believed they had the same guy who coached Indiana.

As for your last question of do I believe the future is strong if Tubby has a successful season? It depends on what "success" is. I don't believe a 6th place Big Ten season (provided it does not come with a deep tournament run) does much to move the needle. If Tubby can get in the top 3 or 4 and finally win a BIG home game or two, then I could see things turning around.
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I personally agree with you on many points. But, neither of us is in a position to influence the decision making process regarding the matter of Tubby’s contract here or elsewhere. The perception of Tubby as a coach and business asset to the decision makers is what matters for negotiation. And the perception is to be based on research on their own, accounting for both basketball and marketing aspects. I keep on bringing up the LSU thing because it demonstrates his value which has nothing to do with our opinions of Tubby. It is just part of the objective reality. Do I personally think Tubby “deserves” what he is getting from the U? Not necessarily. But, if he makes a few more bucks taking advantage of our dilemma -- that is how the market works -- I can live with that. That is the basis of my argument.

Regarding our prospect of the next season, it is just another basis of my argument that Tubby, at the end of the next season, will be able to get a deal better than he could right now if he can finish top 6 in the conference (therefore making the Dance without being a bubble and possibly being ranked nationally). Such a finish cannot degrade his value since it is an outcome superior to what he has done at the U since the hiring, after all.

I personally believe that we will most likely finish 6th in the conference and win no more than a game at the Dance next season. I can construct my negotiation with Tubby based on my view if I am the AD. However, what if I am wrong, and such is not the most likely outcome? What if it may not actually materialize even if it happens to be the most likely outcome? We see less likely outcomes taking place everywhere, all the time. I must think about such possibilities and contingencies if I am the negotiator.
 

station19 said:
"Smith's $1.965 million salary next year before bonuses is more than the contracts of John Thompson III, Roy Williams, Scott Drew, Frank Martin, Jim Boeheim, Shaka Smart and Mick Cronin, among others, provided last year. Each of those coaches has found more recent success than Smith, yet some, like Smart and Cronin, made little more than half of what Smith will net."
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If I were the AD, I would have fired Tubby right now without giving him the extension "so long as I had a better replacement." The issue here is not what Tubby deserves. But, what we can do in this bad situation is to minimize our bleeding. You do not have to repeat the given, Tubby not deserving the contract on his own merit.
 

GoFerit said:
If I were the AD, I would have fired Tubby right now without giving him the extension "so long as I had a better replacement." The issue here is not what Tubby deserves. But, what we can do in this bad situation is to minimize our bleeding. You do not have to repeat the given, Tubby not deserving the contract on his own merit.
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How often does a coach get fired with the replacement in hand? It's always a gamble.

Someone should pose the question: Has Tubby under-performed or is that hard to recruit and win at Minnesota?
 



Like GW says, we can think about the incentive clauses in terms of the worst or best case scenario. But, another way to think about them is in terms of expected value because there are probabilities of actualization inherent to the incentive events.

For instance, Tubby is to get $250,000 if we win a regular season conference championship or a conference tourney. In my view, the chance of us winning a regular season championship is about 5% over the next five seasons, the duration of the contract Tubby is getting. To be generous, let’s say the probability is 10%. The conference tourney is different because the luck factor plays a bigger role. Let’s say that there is 20% of chance that we win a tourney for the same period.

Then, the expected value of the incentives or the expected payoff to Tubby for the duration of the current contract is:

($250,000 x 0.1) + ($250,000 x 0.2) = $75,000

If we divide it by 5 yrs, we will get $15,000 per year which is the expected value of the annual payment to Tubby per the conference championship incentives. In other words, the U is giving extra $15,000 per year to Tubby for the incentive possibility. These incentives existed before for the amount of $100,000 for each event per a news article. Therefore, we are talking about a $9,000 increase in the incentive payoff per year.

Of course, the probabilities I used above are highly subjective. Though I believe they are reasonable, you may disagree, perhaps rightfully so. My point, though, is to demonstrate another way to think about all the incentive clauses accounting for probabilities of the events actually happening.
 

station19 said:
How often does a coach get fired with the replacement in hand? It's always a gamble.

Someone should pose the question: Has Tubby under-performed or is that hard to recruit and win at Minnesota?
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If so, you should argue your case that we are better off by assuming the buyout cost, firing his ass, and getting a competent replacement.
 

Scanning that FSN article, it looked like they ignored the $250k annual retirement contribution, which is not insignificant. Nonetheless, I've looked at this from various angles and it's clear that Tubby Smith is simply one of the more highly compensated coaches in college basketball and has the opportunity with decent results (i.e., win a game in the tourney and have kids be average in the classroom) to be spring into the elite.

Kaler and Teague are showing an incredible amount of faith in Smith. They have made it clear that he is their guy.
 


GoFerit said:
Like GW says, we can think about the incentive clauses in terms of the worst or best case scenario. But, another way to think about them is in terms of expected value because there are probabilities of actualization inherent to the incentive events.

For instance, Tubby is to get $250,000 if we win a regular season conference championship or a conference tourney. In my view, the chance of us winning a regular season championship is about 5% over the next five seasons, the duration of the contract Tubby is getting. To be generous, let’s say the probability is 10%. The conference tourney is different because the luck factor plays a bigger role. Let’s say that there is 20% of chance that we win a tourney for the same period.

Then, the expected value of the incentives or the expected payoff to Tubby for the duration of the current contract is:

($250,000 x 0.1) + ($250,000 x 0.2) = $75,000

If we divide it by 5 yrs, we will get $15,000 per year which is the expected value of the annual payment to Tubby per the conference championship incentives. In other words, the U is giving extra $15,000 per year to Tubby for the incentive possibility. These incentives existed before for the amount of $100,000 for each event per a news article. Therefore, we are talking about a $9,000 increase in the incentive payoff per year.

Of course, the probabilities I used above are highly subjective. Though I believe they are reasonable, you may disagree, perhaps rightfully so. My point, though, is to demonstrate another way to think about all the incentive clauses accounting for probabilities of the events actually happening.
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It's a basketball coach and his salary.

Is there really a need to turn this into a discussion of multiplier effects and flux capacitors.
 

Gopher Warrior said:
Scanning that FSN article, it looked like they ignored the $250k annual retirement contribution, which is not insignificant. Nonetheless, I've looked at this from various angles and it's clear that Tubby Smith is simply one of the more highly compensated coaches in college basketball and has the opportunity with decent results (i.e., win a game in the tourney and have kids be average in the classroom) to be spring into the elite.

Kaler and Teague are showing an incredible amount of faith in Smith. They have made it clear that he is their guy.
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Interesting info. Is the retirement contribution per annum or in total over the contract period?

I agree with them that Tubby is our guy "for now under the circumstances" because I don't think there is a superior option unless we are willing to assume a huge risk right now.
 

station19 said:
It's a basketball coach and his salary.

Is there really a need to turn this into a discussion of multiplier effects and flux capacitors.
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A lot of business decisions are made based on expected value of things. Our program is a business in many ways.

If only I know how to solder as I have a lot of failing capacitors in my electronic stuff....
 

GoFerit said:
Interesting info. Is the retirement contribution per annum or in total over the contract period?

I agree with them that Tubby is our guy "for now under the circumstances" because I don't think there is a superior option unless we are willing to assume a huge risk right now.
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Tubby Smith started receiving a $250,000 annual supplemental retirement contribution each April 30 beginning in 2011 (i.e., to date, the cash paid by the U has been $500,000). Most coaches do not have such a supplement retirement contribution. Some might have a supplemental life insurance policy - Crean is one that comes to mind. His deal provides the school will put $15,000 (fifteen thousand) towards his life insurance policy per year. Obviously a far cry from $250,000.
 

Gopher Warrior said:
Tubby Smith started receiving a $250,000 annual supplemental retirement contribution each April 30 beginning in 2011 (i.e., to date, the cash paid by the U has been $500,000). Most coaches do not have such a supplement retirement contribution. Some might have a supplemental life insurance policy - Crean is one that comes to mind. His deal provides the school will put $15,000 (fifteen thousand) towards his life insurance policy per year. Obviously a far cry from $250,000.
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Thanks for the info. Can I assume it is the amount of the increase from that of the last contract? If so, I guess they found a backdoor way. Interesting stuff.
 

The USA game is over...

Sorry, station 19, if I got on your nerve a little. It is always a pleasure to upset an old-timer here. Kidding..
 

GoFerit said:
Thanks for the info. Can I assume it is the amount of the increase from that of the last contract? If so, I guess they found a backdoor way. Interesting stuff.
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The $250,000 didn't change. Stays the same. It doesn't even show up on the amendment to the contract (the amendment leaves the original contract alone except for parts discussed in the amendment). If you only looked at the amendment you wouldn't even know the $250k per year exists.

The $50,000 increase is from the supplement income component. It went from up to $1.2 million from $1.15.

The most significant changes in compensation were that the bar to achievement of incentives were significantly lowered and the payouts thereto were increased. I suppose you could argue that is a backdoor way to more comp (we'll make it easy for you to earn incentives). It's a little more PR-friendly (for dealing with the general public) to say, "we only increased guaranteed comp a little bit" while not commenting on the fact that the a bunch of incentives will be given for poor to mediocre results than it is to say than it is to make all those easy-to-reach incentives guaranteed.
 

GoFerit said:
The USA game is over...

Sorry, station 19, if I got on your nerve a little. It is always a pleasure to upset an old-timer here. Kidding..
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No problem. I can babble as well as most.
 

GoFerit said:
If I were the AD, I would have fired Tubby right now without giving him the extension "so long as I had a better replacement." The issue here is not what Tubby deserves. But, what we can do in this bad situation is to minimize our bleeding. You do not have to repeat the given, Tubby not deserving the contract on his own merit.
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+1000
 

Dr.Don said:
+1. Actually the ST comment sections are great for exercising your neck with several repetitions of head shakes.
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Dr. Don frequently spends the day at DMV to shake his head at all of the criticism from the naysayers of the well oiled machine!!!
 

per Doogie:

"Talking with a few "U" officials, they acknowledge that the Tubby Smith contract extension is not a win-win. The win is for Smith. One late battle the school won was to lower the buyout for the next two seasons. If they decide to make a move, it'll cost them $2.5 million. It's hard to believe, but that number was higher for months of the negotiations."

http://kstp.com/article/stories/s2729815.shtml

Go Gophers!!
 

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