Tattoogate Impacts Urban Meyer's new OSU Contract

Tattoogate has had a profound effect upon the Jim Tressel era at Ohio State University (OSU).  The NCAA Division 1 Committee on Infractions' ruling was announced on December 20, 2011, and included a one-year Bowl ban for the 2012 Bowl season, three years of probation from December 20, 2011 through December 19, 2014, the forfeiture of nine scholarships during the three-year probation period, and a finding that Jim Tressel had engaged in unethical conduct resulting in a show cause penalty of five years for committing violations, including lying to the NCAA and failing to report violations.[1]  The history and findings relative to Tattoogate can be found in my article entitled Tattoogate dated January 10, 2012.[2]

But Tattoogate has also impacted the contractual relations between OSU and its successor coach, Urban Meyer (Meyer).  Meyer executed an Employment Agreement with OSU on June 8, 2012.[3]  The contract is worth approximately $4.44 million per year over six seasons through the 2017 season.[4]  It includes retention bonuses in 2014, 2016 and 2018 for a total of $2.4 million.[5]

The remnants of the past show up in the Meyer contract in the following respects: 

         1.       Right to Terminate if Undisclosed NCAA Violations Come to Light.

                    Paragraph 5.4 of Meyer's contract states: 

In the event that the Big Ten Conference and/or the NCAA levies any additional (beyond those imposed by the Committee on Infractions in its Report issued on December 20, 2011) sanctions and/or penalties upon Ohio State's football program as a result of any material and/or repetitive violations of any Big Ten and/or NCAA rules or regulations of which Ohio State, as of November 28, 2011, knew or should have known, then, in such event, Coach shall have the right to terminate this agreement for cause and be entitled to receive from Ohio State an amount equal to $1.5 million per each remaining year left on the scheduled term of this agreement (pro-rated for any partial remaining year).  Such sum shall be paid to Coach by Ohio State within sixty (60) days of the date of Coach's termination pursuant to this section.  Other than secondary violations currently and routinely in process, Ohio State has informed Coach of all significant NCAA issues of which it is aware.[6]

In essence, then, Paragraph 5.4 permits Meyer to be released from his contractual obligations and paid liquidated damages in the amount of $1.5 million per year for the remainder of his contract if any more major violations that were committed before his hiring come to light regarding the football program.[7]

Athletic Director Gene Smith indicated that he had no problem granting this provision.[8]  "We're very confident we have no issues," Smith said.[9]  "We scrubbed everything very hard so when his attorney's ask for that, we felt comfortable doing that."[10]

2.       Clawback Provision.  The use of clawback clauses in college athletics was discussed in my article entitled The Use of Clawback Clauses in College Coaches' Contracts, For the Record, Volume 21, No. 2 (April-June 2010).[11]

Meyer's contract contains a clawback provision under Paragraph 5.7 entitled Recovery of Bonus and Supplemental Compensation and states as follows:

In the event this agreement is terminated by Ohio State, Coach shall repay to Ohio State all bonus and supplemental compensation received by Coach for the achievement of any specified milestone, objective or Exceptional Achievement as set forth in Section 3.4, if such achievement is subsequently vacated by Ohio State or the NCAA (and later affirmed by the NCAA), if such vacation is due, in whole or in part, to the wrongful actions of Coach, as determined by Ohio State or the NCAA.[12]

Paragraph 3.4 of Meyer's contract, Exceptional Achievements, requires the University to pay the Coach for certain milestones, including: 

1.       Annual Cumulative Team Grade Point Averages;

2.       Big Ten Leaders Division Champion;

3.       Winner of Big Ten Championship Game;

4.       BCS Bowl Game (not National Championship Game) Appearance; and

5.       National Championship BCS Bowl Game Appearance.[13]

In essence, then, if any exceptional achievement bonus is subsequently vacated by OSU or the NCAA, and if such vacation is due in whole or in part to the wrongful actions of Coach as determined solely by OSU or the NCAA, Meyer is required to repay to OSU all of such bonus and supplemental compensation received by Coach for such achievements.

3.       Termination Provisions.  Section 5 of Meyer's contract entitled Termination, provides that at all times the Coach serves at the pleasure of the Athletic Director and no payments or further benefits shall be made to the Coach if the Director notifies the Coach at any time that OSU is terminating this agreement for cause . . . which shall include, but not be limited to, the following:[14]

Paragraph 5.1.(b) defines cause as: 

A significant or repetitive or intentional violation (or a pattern of conduct which may constitute or lead to a major violation), as determined by Ohio State, by Coach (or any other person under coach's supervision and direction, including, but not limited to, student-athletes, which Coach knew about or should have (in Ohio State's determination) reasonably known about) of any laws, University Rules or Governing Athletic Rules;[15]

Comparing Meyer's contract to Tressel's last contract, Paragraph 5.1(b) mandates that Meyer could be fired with cause for any significant or repetitive or intentional NCAA violations committed by Meyer or any staff member or player.[16]  Tressel's deal had the same language, but Meyer's additionally includes the extra phrase, "which Coach knew about or should have (in Ohio State's determination) reasonably known about."[17]

Paragraph 5.1(m) further defines cause as a:

Failure by Coach to report promptly to the Director and to the Office of Compliance Services in writing any violations or potential violations known to Coach of Governing Athletic Rules or University Rules including, but not limited to, those by Coach, the assistant coaches, students or other persons under the direct control or supervision of Coach, as determined by Ohio State.[18]

Under Paragraph 5.1, Meyer is required to report promptly in writing to the Athletic Director and the Office of Compliance any violations or potential violations of NCAA or University Rules.[19]  Tressel had the same provision, except his contract covered only "any violations" and did not include "potential violations."[20]

With respect to these provisions, Athletic Director Smith said, "We talked to our attorneys in our Compliance Office and added a few more things in there.  Considering the circumstances, we felt it was appropriate that we do that.  It was more of a safeguard than anything."[21]

4.       Expanding of Duties and Responsibilities.  Section 4 of Meyer's contract delineates the Coach's specific duties and responsibilities.  More specifically,

Paragraph 4.1(d) indicates that Coach shall:

Know, recognize and comply with all federal, state and local laws, as well as all applicable University Rules and Governing Athletic Rules, in accordance with NCAA Bylaw 11.1.2.1, promote an atmosphere for compliance within the football program supervised by Coach and monitor the activities regarding compliance of all assistant coaches and other administrators involved with the program who report directly or indirectly to Coach; supervise and take appropriate steps in an effort to ensure that Coach's assistant coaches, any other employees for whom Coach is administratively responsible and the members of the Team know, recognize and comply with all such laws, University Rules and Governing Athletic Rules; and immediately report to the Director and to the Department's Office of Compliance Services in writing if any person or entity, including without limitation, representatives of Ohio State's athletic interests, has violated or is likely to violate or may potentially have violated any such laws, University Rules and Governing Athletic Rules (unless Ohio State has informed Coach that certain minor transgressions do not require written reports to the Director and the Department's Office of Compliance Services.)  Coach shall cooperate fully with the Department's Office of Compliance Services at all times.  Coach shall review and approve in writing all requests for expense reimbursements by assistant football coaches prior to submission to Ohio State in an effort to ensure accuracy and compliance with all such laws, University Rules and Governing Athletic Rules, and upon such satisfactory review, shall forward the same to Ohio State for his approval for payment.[22]

Meyer's contract differs from Tressel's contract in that Meyer's contract requires compliance in accordance with NCAA Bylaw 11.1.2.1.[23]  Meyer's contract requires Meyer to promote an atmosphere for compliance within the football program supervised by Coach and monitor the activities regarding compliance of all assistant coaches and other administrators involved with the program who report directly or indirectly to Coach.[24]  Further, Meyer's contract expands the language relative to reporting to the Director and the Office of Compliance Services, including the words "or may potentially have violated any such laws, University Rules and Governing Athletic Rules.”[25]

5.       Bowl Bonuses.  Although the Committee on Infractions included a one-year Bowl ban for the 2012 Bowl season, Meyer under Paragraph 3.4, Exceptional Achievements, can earn a bonus if:

One commentator questions the methodology with respect to the determination of the contractual bonus: 

His $150,000 bonus for going to a BCS bowl can be reached this season if Ohio State is ranked between No. 3 and No. 10 in the final BCS standings.  His $250,000 bonus for reaching the BCS National Championship can be reached this season if Ohio State finishes No. 1 or No. 2 in the final BCS standings.  I don't believe either of those scenarios is possible since the BCS doesn't rank teams on bowl sanctions.  Even if they discontinue that practice, the coaches' poll would have to discontinue its same practice or else even a #1 ranking in some computer poll would be more than offset by a complete un-ranking in the coaches polls, sending OSU tumbling down the overall BCS standings.[29]

Meyer's new contract keeps him among the top paid football coaches nationally, behind only Mack Brown, Nick Saban and Bob Stoops.[30]  Meyer's compensation package will earn him more than twice as much in guaranteed money as Ohio State's President Jordan Gee, who is one of the highest compensated university presidents.[31]  As a result of the indiscretions of Jim Tressel and the ramifications of Tattoogate, Meyer must be "diligent in following NCAA Rules.”[32]  While Meyer has “never been found to be in violation of NCAA Rules at his previous jobs, but after the NCAA scandal that ended Tressel's coaching tenure, Ohio State University is not taking anything for granted."[33]

{Thank you to Marquette University Law School students Amber Hinson and Bailey Briggs for help in editing and footnoting this article.}

[1] Martin J. Greenberg & Lindsay Ruch, Tattoogate, Marq. U. L. Sch. (Jan. 10, 2012).  The history and findings relative to Tattoogate can be found in my article entitled Tattoogate.

[2] Id.

[3] Employment Agreement Between the Ohio State University and Urban F. Meyer 27 (2012), available at http://assets.sbnation.com/assets/1192196/urban-meyer-contract.pdf [hereinafter Meyer Agreement].

[4] Doug Lesmerises, Urban Meyer’s Full Ohio State Contract Released, with More Details of Bowl Bonuses, NCAA Violations, Cleveland.com (June 18, 2012, 12:30 PM), http://www.cleveland.com/osu/index.ssf/2012/06/post_96.html.

[5] Id.

[6] Meyer Agreement, supra note 3, at 23.

[7] Lesmerises, supra note 4.

[8] Id.

[9] Id.

[10] Id.

[11] Martin J. Greenberg, The Use of Clawback Clauses in College Coaches' Contracts, For the Record (Marq. Sports L. Inst., Milwaukee, Wis.), April-June 2010.

[12] Meyer Agreement, supra note 3, at 24.

[13] Id. at 9–10.

[14] Id. at 16–17.

[15] Id. at 17.

[16] Lesmerises, supra note 4.

[17] Id.

[18] Meyer Agreement, supra note 3, at 19.

[19] Lesmerises, supra note 4.

[20] Id.

[21] Id.

[22] Meyer Agreement, supra note 3, at 14.

[23] Id.

[24] Id.

[25] Id.

[26] Id.at 10.

[27] Id.

[28] Id.

[29] TwinBucks, Comment to Lesmerises, supra note 4.

[30] Matt Hinton, Urban Meyer’s OSU Contract Carves Lucrative Escape Route from Tressel-era Surprises. CBS Sports (June 18, 2012). 

[31] OSU Outlines Coach’s Responsibilities in the Event of NCAA Violations, SportsBusiness Daily (June 19, 2012).

[32] Id.

[33] Id.