A Closer Look At The Employment Contract Of New Cal Defensive Coordinator Art Kaufman

Stalin was not happy with what he was seeing. In 1936, while attending Dmitri Shostakovich's opera "Lady MacBeth Of Mtensk" at the Bolshoi Theatre, he found the brass orchestration jarring and the acting laughable. Shostakovich himself was present at the opera and saw Stalin, known for both his genocidal tendencies along with his love of the arts, not enjoying the whole thing. He was apparently ashen when he came out for a bow.

Soon after, the Soviet organ "Pravda" published "Muddle, Not Music," an op-ed, purportedly ghostwritten by Stalin himself, blasting Shostakovich for formalism (think more bourgeoisie than proletariat). Shostakovich, previously one of the USSR's artistic stars found himself dangerously ex-communicated. Privileges carefully earned over time were quickly taken away. He was deemed an "Enemy Of The People." His friends denounced him. He may as well been dead.

Shostakovich started sleeping in the hallway of his apartment with his bags packed. The threat of disappearance was quite real. He fully expected that Stalin's secret police would come to take him to the gulag without warning some night, any night. He didn't want to bother his family when that happened.

It was not until he wrote his sarcastic-march 5th Symphony (second only to his sanguine 11th Symphony) that he was returned to the exalted status of before. It takes a rare breed to troll Ioseb Jugashvili and not only live to tell the tale, but become more popular and powerful than before.

I doubt that Andy Buh was sleeping in his foyer with his bags packed, waiting for Sonny Dykes' men to take him to Stanford, one of those nightmarish places that exists on no maps. The type of place where your spine shudders just thinking about it. But in the People's Republic Of Berkeley, Andy Buh was, most definitely an "Enemy Of The People." It was only a matter of time before he was "disappeared" from the Cal football team.  That time took longer than most expected, but now he is no longer a coach with Cal.

Last year, the day after Big Game, we looked at the buyout provisions on Andy Buh's contract. Cal owes Buh potentially up to one million dollars over the next two years. This may have hampered Cal's ability to go out and spend a lot of money on a new Defensive Coordinator to replace Buh.

However, with Jeff Tedford getting a new job at Tampa Bay, that triggered a portion of his contract buyout that lowered Cal's payments to him potentially up to $450,000.00. Sweet, free money!

So, Cal was able to go out and hunt themselves a nice fancy new DC. They got Art Kaufman, formerly of Cincinnati. Now that we have this Kaufman character, I thought it cool to look at his contract and break it down. That's because I'm a giant nerd like that and I actually like reading contracts and looking at financials.

So, let's look closer at Kaufmann's contract to see what Cal has going on here. These documents are lengthy and most of it is boilerplate (i.e. factory-issue language that is not specific to Kaufman). Sometimes there are some interesting nuggets in there, though.

BOILERPLATE

For example, Section 5a on page 2 says that if the school has to cut employees' pay via furlough, Kaufman can be furloughed, too. Presumably the other coaches have these stipulations in there. I think we're through the worst of the budget crises in the UC system, but it would be weird if Cal fell behind in preparation for a game or season, because some of their staff was furloughed to save money.

Another interesting boilerplate section is 8 on page 4. It requires Kaufmann to give up his rights to his likeness to the school. Kaufman cannot use his name or likeness for commercial gain without the prior written consent of the Department. The definition of "commercial gain" is so broad here that it includes appearances with media outlets, such as radio, television, and newspaper, even if Kaufman does not get paid for it. This essentially controls Kaufmann's interactions with media in all forms.

OK, enough boilerplate. Let's get into the material terms.

MATERIAL TERMS

Duration: Section 1 on the Contract Addendum on page 11 notes that this is a 2 year term, from January 22, 2014 to April 30, 2016. After experiencing the Buh albatross, I would not be surprised to see shorter 2 year contracts more common. They want to be able to get out sooner from bad deals.

Salary: Section 2A on page 2 states that the base salary annually shall be $225,000.00. Section 2B on page 2 provide the talent fee. The talent fee is $325,000.00 annually. What is the difference between base salary and talent fee? It is understood that the base salary is paid with taxpayer money, while the talent fee is paid with private sources (Nike?).

Bonuses: Now we get to the listing of bonuses that sadly nobody ever earns. :( This is Section 5C on page 12.

1. Non-BCS Bowl Game: $10,000.00
2. Pac-12 Championship Game: $15,000.00
3. BCS Bowl Game (not NatChamp): $25,000.00
4. NatChamp: $35,000.00
5. Top 50 defensive ranking (based on average points allowed per game during regular season): $25,000.00

Also, he got a $20,000.00 signing bonus. Lunch is on Kaufman!

BUYOUT CLAUSE

Now, we get to the part of the post that Cal fans have become sadly way too knowledgeable about in the last few years, the buyout clause. A bunch of contract lawyers, all of us. We don't want to know about the buyout clause. We don't want to know about the duty to mitigate damages. We don't want to know about how to escape contracts and how painful it'll be for the Department. However, that is the conversation we've had a lot recently. It is a reflection of the mediocrity (or not even mediocrity) that Cal football has found itself in these last few years.

So, what happens if Cal fires Kaufman without cause as it did with Buh. Section 12 on page 7 provides that Cal owes $550,000.00 to Kaufman if he is fired at any time prior to the end of the 2014 football season (which will naturally end on January 1, 2015). If Cal fires Kaufman after the 2014 season, but before the end of the 2016 season, then Cal owes him $340,000.00.

The thing about this contract is that the first year runs into April 30, 2015 and the second year runs from May 1, 2015 to April 30, 2016. However, the trigger for the smaller buyout is the end of the 2014 football season. It goes from $550,000.00 to $340,000.00. So, if he is fired the day after the end of the 2014 football season, does that mean Cal saves on the money owed for December, 2014 through April 2015 along with the $210,000.00?

Buh's contract explicitly spelled out that the buyout provision was the full 100% of the base salary and talent for the remaining year (plus all additional years after that). That is different than this term, which is a specific amount of money independent of the base salary and talent fee. So, the savings could be quite substantial compared to the amount left on the contract to be paid.

This also does not include the duty to mitigate damages clause (which is included in Section 12 on page 7). This requires Kaufman to take reasonable action to find a job if he is fired. His damages are the money he would have made as the Defensive Coordinator. He has a responsibility to try to mitigate (or lower) them. The clause states that if Kaufman gets another job, the amount paid to Kaufman is lowered by any monies paid prior (or to be paid prior) to the April 30, 2016 termination date of this contract.

So, if Kaufman gets fired in December, 2014, the buyout would be $340,000.00 flat, independent of his base salary and talent fee. Plus, if he gets another job as the linebackers coach at Southwest Arizona A+M and that pays him $100,000.00 prior to April 30, 2016, then Cal would only actually owe him $240,000.00. This is a much better deal than Andy Buh's contract, which has left him with potentially a sweet mil to not be the defensive coordinator.

Termination By Coach: Section 13 on page 8 states that if Kaufman quits prior to April 30, 2015, he has to pay Cal $75,000.00. This is to nominally due to Kaufman learning all of Cal's secrets. They want to keep him from getting all those juicy juicy secrets and then bailing to some rival school to dish the dirt.

CONCLUSION

Why must our fanbase be so knowledgeable about buyout clauses? It is important for Cal fans to understand what financial forces are affecting the Department. But why can't we just go a few years without struggling over whether to fire a coach and how much it'll cost Cal? Now we are paying two head football coaches and two defensive coordinators! The Department has so many varied financial obligations, including our new debt service for the stadium upgrades (paid 14 mil in FY13!). We don't need to pay people NOT to coach for Cal.

Hopefully, we will not have to pay Kaufman not to coach for us. However, if we do, a)Dykes probably is gone, so we have to pay for a THIRD football coach, and b)at least Kaufman's contract won't be quite the disaster that Buh's is.

What do you think about Kaufman's contract? Like it? Hate it? General uninterest in the topic? Tell us in the comments. GO BEARS!