About 3:00 p.m. September 25, 2016, The Advocate in Baton Rouge reported that Les Miles would be fired as LSU’s head coach. As information developed, Louisiana native, former Ole Miss head coach, and former interim coach at USC, Ed Ogeron would be named the interim head coach for the Bengal Tigers.
But looming heavily over the last year of Miles’ tenure was the contract that came as a result of a rumor that Arkansas made a hard offer to Miles on November 27, 2012, to be the next Head Hog.
As Arkansas’ search for a new coach came to a close at the end of 2012, the New Orleans Times Picayune’s Jim Kleinpeter reported, “LSU Coach Les Miles has a ‘serious offer’ from Arkansas, source says“. Supposedly the offer was for $27.5 million over 5 years, but further in the same article, another source attributed the first source’s information to speculation by Sports by Brooks in probably one of the last significant things Sports by Brooks did before disappearing from the online sports scene in April of 2013.
Of course Les Miles stayed at LSU, but the supposed run at Miles resulted in a contract amendment to keep him at LSU. Dated January 1, 2013 the amended contract was at least Miles’ the third modification since his original hire with previous two amendments occurring on April 24, 2008 after his BCS National Championship season and again on August 31, 2011.
Some of the expense was immediate. LSU agreed to pay Miles an additional $550,000 per year from media revenue beginning in 2013.
Other provisions created new future obligations. Miles’ term of employment lengthened by two years to 2019, and LSU also agreed to pay Miles additional compensation based upon length of service which would trigger for the first time at the end of the 2017 season and be worth $750,000 to Miles at that point but worth nothing before then.
However, the January 1, 2013 agreement drastically changed the August 31, 2011 Miles’ buyout provisions if he was terminated without cause.
Side-by-side, they are:
|Begin||End||Buyout 2011*||Buyout 2013*||Difference*|
For 2016, Les Miles’ buyout increased by $5.4M from $7.5M to $12.9M. In fairness, Miles has a good faith duty and obligation to seek other or related employment while LSU owes Miles the buyout amount over double the amount of time remaining in the contract. Other employment will reduce the payout for LSU. Conceivably Miles could volunteer for ESPN at Disney World and make bank.
Strictly in terms of cash, the rumor cost LSU $1.65M in immediate media money plus $5.4M in buyout or $7.05M in cash.
So why fire Miles now? At the end of last year, it would have cost LSU $15,000,000. Although the amount paid to him over the last year versus the increased buyout amount are roughly equal, LSU would have had to add the cost of staff severance and cost of acquiring a new staff within 2016. Firing Miles now results in a payout of $12.9 payout over 78 (39 months remaining on the contract times 2) months or roughly $165,384 per month. Had they waited until December 2017, the $12.9M would have had been paid out over roughly 48 months or $268,750/month. Holding onto the money, it might be used to make more money and reduce the total payout, but more important, it extends by 30 months the amount of time in which Miles might find other employment.
That’s how an Arkansas hiring rumor cost LSU about $7,000,000. You’re welcome, Les. Enjoy retirement. We’ll miss you.