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Thoughts On California Golden Bears Head Football Coach Jeff Tedford's Employment Contract

Update Minutes from a UC Regents Meeting (caution:  PDF, go to page 30) specifying a newer Contract Addendum (but not the specific language of said Addendum) have been brought to my attention.  In reviewing these minutes, it does not appear that there are major fundamental differences in the newer Contract Addendum than the one discussed in this post.  The Retention Bonus is changed slightly to basically have $500,000.00 a year be put into a Deferred Compensation Plan on a yearly basis at a rate similar to the Retention Bonuses previously used.  It appears that it basically gives Tedford similar sums of money as the Retention Bonuses, but he receives them at the end of the contract instead of at set points during the contractual term. 

Also, the bonus rates for "Achievements" (i.e. winning Pac10/National Championship) have gone WAY up.  For example, winning Pac10 goes from $75,000 to $500,000.  Will do a follow up post with these slight changes in the next few weeks.  However, the discussion in this post still contains the general outline to Coach Tedford's contract, even if the numbers are slightly different. 

With the frustrating season Cal just had, there has been a lot of discussion about Coach Tedford's contract.  Some people have stated they wish Coach Tedford would be fired.  I am not personally in that camp, but it is a sentiment that I have seen expressed.  Others state that the buyout in his contract is too great for Cal to afford.  That might be true, but nobody seems to speak from a position of personal knowledge.

Fortunately, there is a purported copy of Coach Tedford's contract (with 2 addendums) available online.  Here it is in PDF form.

To read that, you have to kind of start at the bottom.  The original contract, executed by former Chancellor Berdahl, is at the way bottom.  However, it is generally vague and when specifics are necessary states that all parties should look to the active Contract Addendum.  There is an old Contract Addendum in the middle of the PDF.  Then, at the top is the most recent Contract Addendum, which states that all other Contract Addendums are invalid.  Thus, the most recent Contract Addendum is essentially the contract.

Disclaimer:  I am not a contract attorney, so there certainly could be nooks and crannies to this that I am not fully understanding.  Feel free to read the document yourself.  I just went section by section and attempted to summarize the language there in easy to understand layman's terminology. 

Hopefully, this will shed some light on the specific sections that are actually in Coach Tedford's contract and help everybody get on the same page as to what both Cal and Coach Tedford's responsibilities are towards each other.   Even people who are not Cal fans might be interested to go deep into what a contract looks like for a college head coach.  Many thanks to CalBear81 for her valuable assistance in putting this post together.  GO BEARS!

What are your thoughts on the contract?  Leave them in the comments!

Section 1. The contract lasts until December 31, 2013, depending on Section 2.

Section 2. For every season that Cal wins 9 games (including bowl wins), the contract is extended for one year. For every year after 2013 that the contract is extended, Tedford is paid at the 2013 rate of payment and all other aspects to the contract remain in existence unless all the parties agree otherwise.  As Cal won 9 games in 2008, it appears that his contract has, as of now, been extended to 2014.

Section 3. Tedford is paid no less than $225,000 per year for all 7 years of this contract in base pay.

Section 4. Tedford gets 20 days of vacation a year. He cannot accrue more than 40 days of vacation at any time. If he gets to 40 days of vacation at any time, he stops accruing vacation days until he gets back down to 20.

Section 5. Tedford gets 12 sick days a year.

Section 6. Tedford is a full-time employee and is eligible for all the University's regular health, welfare, and retirement benefits for full-time employees.

Section 7. Tedford gets 2 company cars, the details of which are in a separate contract. Sandy can take away the cars at her sole discretion.

Section 8. Sandy can decide when Tedford talks at booster and other Cal-related events. In return, Tedford gets a talent fee of $1,575,000.00. If Cal plays in a BCS game, that fee is increased by $50,000.00 for that year and every remaining year on the contract. This talent fee is the bulk of his annual contract.  Private sources pay this fee and, according to this SF Chronicle article, it widely believed that Nike pays this talent fee.

To alleviate most of those questions, the initial contract terms are simple. Tedford's base salary would jump 34.4 percent, from $167,500 to no less than $225,000, and his "talent fee"' would see a similar rise from $1,332,500 to $1.575 million. The talent fee is widely believed to be funded by Nike, which provided Cal with its dashing array of uniform combinations this season.

Section 9. This is termed Retention Bonus and basically as long as Tedford is still coaching as of the end of the 2008 season, he gets a sweet mil. He gets paid this mil on January 7, 2009. I presume he got paid this money.

If he is still employed by the end of the 2011 season, he gets 1.5 mil, payable on January 8, 2012.

If he is still employed by the end of the contract (i.e. 2013 season) he gets another mil, payable on January 8, 2014.

If Cal plays in a BCS game, these retention bonuses are increased by $50,000.00 for that year and each remaining year on the contract.

If Tedford did not make it to these bonus periods because of death or disability, he or his heirs would receive a pro-rata share of the retention bonus based on how much time he was employed.

Section 10. This is the signing bonus. So, Tedford got a sweet mil for signing the contract. If he had bailed before the start of the 2007 season, he had to pay it back within 60 days.

Section 11. Here, are the specific bonuses. Tedford gets $150,000 for winning any part of a National Championship.

It gets a big confusing, but he can only get 1 of the following bonuses (the highest):

$75,000 for winning at least a share of the Pac10
$50,000 for being in a BCS bowl game, even if Cal doesn't win at least a share of the Pac10
$25,000 for going to a bowl

He can only get 1 of the following bonuses (the highest):

$100,000 for winning National Coach of the Year
$50,000 for winning Pac10 Coach of the Year

There is an Academic bonus. Sandy can give Tedford a $25,000 if he improves or maintains a team GPA at or above 2.8 or a NCAA APR at or above 950.

If Cal wins 9 regular season games, Tedford gets $50,000.00.  The Bowl Games don't apply here.

Section 12. Sandy can decide to give Tedford a bonus of $4,000 to $10,000 for any reason during year 1 (2007) and years 4-5 (2010-2011) of the contract.

Sandy can decide to give Tedford a bonus of $14,000 to $20,000 during years 2-3 (2008 to 2009).

Both of these bonuses are supposed to be given based on Coach's performance. Ruh roh!

Section 13. Tedford has $250,000 to give out in bonuses to his coaching staff. Tedford also has $216,000 in "talent fees" he can dole out to his coaching staff. If Sandy gets another source of funds for this talent fee, she can lower or eliminate the talent fee. It does not state whether this is annually or for the course of his contract, but I would assume annually.

Section 14. Cal buys Tedford a membership at the Blackhawk Country Club.  Wonder how often he uses this perk?

Section 15. Tedford is an administrator for at least one week of the Cal Camp during the summer. His payment for this is in the 1.5 mil talent fee.

Section 16. Tedford gets 30 tickets and 5 parking passes for all Cal home games.

Section 17. Cal will pay for all travel expenses for Mrs. Tedford when the expenses are related to trips in line with Tedford's professional functions. Sandy shall approve all expenses.

Section 18. Tedford gets $250,000 if he is the head coach when the "Simpson High Performance Center" opens. I surmise that the Simpson High Performance Center is the SAHPC?

Tedford gets $250,000 if he is the head coach when Phase II (west side improvements) are completed.

Section 19. If Tedford materially breaches his contract, Cal can terminate his employment.

Section 20. If Tedford bails before the end of his contract, he has to pay $300,000 a year back to Cal for every year remaining on his contract. However, if Cal has yet to enter the Simpson High Performance Center, this is only $150,000 a year for each remaining. Further, Tedford cannot coach at any other Pac10 school. This Pac10 restriction is waived for the years before Cal enters the Simpson High Performance Center.

Valued reader CalBear81 thinks that this clause might exist because of former Cal coach Bruce Snyder.  He left Cal and went directly to Arizona State.  This was all before my time at Cal, but apparently there was some great frustration over this move.  This clause might exist to avoid another Snyder.  Also, CalBear81 poses the question as to whether Utah/Colorado would count as Pac10 schools.  Presumably not as at the time of the execution of this contract, it was nobody's intention nor understanding that those schools would join the Pac10.  Further, they are technically in the Pac12.  However, it is an interesting clause.  This clause is also about to end as the Cal team will enter the High Performance Center in 2012.

Section 21. Cal can fire Tedford at any time without cause, but would have to pay all the remaining payments he would be entitled to under the contract, including the 'talent fee' and 'retention bonuses.'  Further, Tedford has to mitigate his damages by trying to obtain another coaching job. If Tedford gets a head coaching job at a college or a head or assistant coaching job in the NFL, then the payments Cal has to make are lowered by the sum of payments he receives there.  There is no language regarding obtaining an assistant coaching job in the college ranks. 

Section 22. If Tedford cannot continue to be coach due to illness or anything outside of the control of either party, the contract terminates.  Then, Cal only has to pay Tedford whatever base pay he has earned up to the date his employment ends plus a pro-rata amount of the retention bonuses, incentive bonuses, and the talent fee, also up to the date his employment ends, as specified in paragraphs 9 and 11 of the contract addendum.

Section 23. Sandy is Tedford's direct boss.

At the end, it looks like Coach Tedford had to provide details on other sums of money or benefits he received. Interestingly, it appears Tedford got paid $5,000 for a shoe endorsement deal outside of his contract??? Hmmm.

Conclusion: Damn. Coach Tedford gets a lot of money. I wish I was a head coach.  It looks like Tedford's buyout could be very prohibitive.  His contract has been extended to 2014, because Cal won 9 games in 2008.  So, Cal would have to pay the base salary to that point plus pro-ration of the retention bonuses.  I wish I had some further indication regarding the source of some of these payments.  There is the information about the talent fee coming from a private source.  Do the retention bonuses come from private sources?  Some of the bonuses specify that the University shall make the payments, such as the Blackhawk Country Club.  However, most of them are mum regarding the source of the funds.  The Chron article linked above states the following:

Judith Hopkinson, chair of the UC Board of Regents compensation committee, said the committee discussed the contract for about 20 minutes Tuesday and the full board will vote on the contract Thursday.

"He is an extremely valuable person to the university and the compensation is extremely high, but if you look at other NCAA coaches at universities with top performing teams, this is not out of line at all," she said. "The money that is being used is not state money or campus discretionary money. It will all be private money.

So, that provides the thought that the vast majority of these bonuses and fees are not paid with University money or your tax dollars.  However, it is still vague and I would like further information.

Further, Tedford has a duty to mitigate damages if he leaves early.  This is not uncommon.  If he can get another job, it decreases the amount that Cal has to pay him.  I believe that were he to leave (and I am 100% against that), it would be easy for him to get another head coaching college job or head/asst coaching job in the NFL.  This would make the burden on Cal that much easier. 

So, I hope that this helps people better understand the contract situation.  Like I said, I am not an expert in this field and so feel free to read it yourself.  I think it is a bit more user friendly in most situations than most people might think.  Not full of legalese.  Either way, if you have any questions, do not hesitate to ask them in the comments.

And what are your thoughts on the Contract?  Leave them in the comments, too!  GO BEARS!