U regents, frustrated with Richard Pitino's big-money buyout, push for contract authority

The University of Minnesota president and athletic director would need Board of Regents approval on contracts for the highest-paid Gophers coaches under a new regent proposal.

Regent Michael Hsu told the Star Tribune he will introduce a resolution at Thursday's meeting to return contract-approval power to the board, which has not had that authority since 1996.

A draft of the resolution obtained by the Star Tribune says that the board should have final approval over contracts totaling at least $600,000 or exceeding $250,000 annually.

University President Eric Kaler declined to be interviewed for this story. In an e-mail to the Star Tribune, he said he would "support the Board's prerogative" in determining oversight.

"If a majority of board members wants changes in policy with regard to athletics coach contracts, I will work closely with them to fully implement those changes," he wrote. Kaler and the athletic director — or an interim such as Beth Goetz — currently have final approval.

Hsu said "a group" of like-minded regents favor the change, prompted by their frustration with what has been learned about the 2015 contract extension for Richard Pitino. The deal, finalized days after athletic director Norwood Teague's sudden resignation, gave the men's basketball coach the highest potential buyout in Gophers coaching history — $7.1 million.

That high cost to make a change is preventing full consideration of all options for the team's future, some regents and others said.

"It certainly illustrates the point," regent Darrin Rosha said of Pitino's extension. Rosha said he "would have never supported a buyout of that size."

The team just posted one of the worst seasons in Gophers history and endured more of the off-court problems that have marked Pitino's three-year tenure.

Despite those troubles, Pitino likely will be given the chance to coach a fourth season. The alternative could cost nearly three times the $2.5 million buyout paid to Tubby Smith in 2013, the most the school has ever paid to fire a coach.

Kaler defended Pitino's extension in his e-mail to the Star Tribune. "It represents a strong commitment to the coach and shows our desire to retain him while being competitive within the Big Ten," he wrote.

Kaler's chief of staff, Amy Phenix, said last week that the contract is "fair and equitable."

"The reality is you're very rarely going to fire someone not for cause in year one of a contract extension," she said. "It's just highly unusual."

Board chair Dean Johnson agreed that Pitino's contract prompted the debate and said that he "wants to hear the discussion." Without offering support or opposition, Johnson added, "I don't think generally boards should be setting salaries and compensation. We have people in place to do that."

Major contracts at eight of the 13 other Big Ten schools require approval from a board, according to officials at the universities.

Any change would affect the U's athletic director position, and potentially the AD search.

Goetz, likely a candidate to be the permanent AD, was not made available for an interview. Pitino also was not made available.

Kaler responded to a question about the potential impact on the AD job in his e-mail, writing that "any diminishment of the AD's authority would make the job less attractive."

"The AD should be both responsible and accountable for those choices," he added.

A multimillion-dollar buyout is not uncommon in the Big Ten. The Star Tribune obtained contracts for 11 of the other 13 Big Ten men's basketball coaches (Penn State and Northwestern do not share university documents) and found Pitino's $7.1 million to be in the midrange of potential buyouts.

"It's just kind of the reality in the early years of a contract to have a large buyout," said Phenix.

Some of the conference's most successful coaches, however, would have received less than Pitino if fired one year after signing their most recent contract, including Michigan's John Beilein ($6 million) and former Wisconsin coach Bo Ryan ($4.65 million).

Pitino's potential payment, like most buyout clauses, decreases each year, in his case by about $1.4 million each season.

Regents Hsu and Rosha also questioned the timing of Pitino's extension approval.

Teague resigned as AD on Aug. 7 amid allegations that he sexually harassed two members of Kaler's leadership team and so that he could seek help for what he called "alcohol issues." That same day, Pitino signed the contract he and Teague had negotiated that gave him two more years and a $400,000 raise and increased his buyout by more than $4 million.

"The terms were negotiated months before the contract was signed," Kaler wrote in his e-mail. "Intervening events did not change the rationale we had in agreeing to those terms in the spring."

Additionally, Phenix said the president's office protected itself by adding two clauses: the sum Pitino would have to return if he took a job elsewhere after this season increased by $500,000 to $1 million, and there is a mitigation clause that demands Pitino "make diligent efforts to obtain comparable employment" if fired.

The school would stop buyout payments if Pitino found "comparable employment" — as an NCAA head coach or an NBA assistant, for example — after being fired. An NCAA assistant job is not defined as comparable and the U would pay the balance between the buyout and new salary in that case.

"You never want to be in a position where your reasons for not firing a coach are because you would owe him too much in a buyout," Hsu said. "I think that's a bad way to do business. I think the people of Minnesota deserve better."

Hsu said the regents were not informed of the extension until after Goetz and Phenix signed, seven days after Teague resigned.

"When we had this issue come up of Norwood resigning and the circumstances related to it, I think more regents had the understanding that we were going to stop, take a pause, take a look at what's going on in athletics and make sure we're doing the right things, we're doing things properly," Hsu said. "And for something like this to happen almost immediately after … I think some people are concerned about that timing."

Rosha, an at-large regent from 1989 to 1995 when the board approved contracts, was surprised to learn of the change when he returned a year ago.

"Are you serious?" he remembered asking. "You could literally have the athletic director and the president's chief of staff commit to $100 million — and yet the regents have no oversight over those decisions."

Hsu said he hopes the resolution can "fix some of these issues" identified in the handling of Pitino's extension.

"This is public money, to some extent," he said. "For that reason, I think we have to be careful about how we spend the money within the athletic department."

The 12-member board could vote on the issue Thursday or table the discussion until their May meeting.

"We'll see if the other members of the board are wanting to be accountable to the people and the state," Rosha said, "or if we're going to be caught inside the university bubble where logic doesn't quite look the same as it does for the rest of us."

Amelia Rayno • 612-673-4115