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Upon Further Review: 6 Answers About O’Brien’s New Penn State Football Contract

by on June 24, 2013 7:22 AM

The ink has now dried on Bill O’Brien’s new contract.

We know it provides for a lump-sum payment of $932,279 to O'Brien by next Monday, when he begins his 19th month on the job. And that it greatly reduces his penalties if the 43-year-old coach leaves Penn State for the NFL before 2017.

But let’s take a quick look at some other numbers and nuances behind the national news-making agreement between O’Brien, who is heading into his second season as the Nittany Lion head football coach, and Penn State:

1. What will it cost O’Brien if he leaves Penn State for the NFL before his contract is completed?

O’Brien’s contract runs through Jan. 6, 2017. The amount to buy out his contract between now and then is greatly reduced if he leaves, his agreement states, “to take a head coaching position with any National Football League team.” The maximum buyout amounts, based on O’Brien’s base salary at the time he would leave, would be:

$6.45 million if he leaves before July 1, 2014; $4.45 million before July 1, 2015; $3.38 million before July 1, 2016; $1.77 million before Jan. 6, 2017; and zero after Jan. 6, 2017. Amounts would be pro-rated, meaning they would be reduced based on how many months he has served of his contract year at the time of his departure, so the actual buyout will very likely be lower.

2. What kind of contracts are in effect for O’Brien’s two bosses?

Penn State president Rodney Erickson, who became president of Penn State on Nov. 9, 2011, had originally planned to retire as provost by now. But he stayed aboard to succeed Graham Spanier during the rockiest period in Penn State history. A search committee has been seeking a successor, and Erickson has said that he hopes a new president is on board by this time next year.

Dave Joyner, whose “interim” tag was removed from his athletic director position title in January, serves at the pleasure of the president. He has indicated he would like to stay in the job, which currently pays him $396,000. Whether Joyner will continue under a new president – to whom Joyner would directly report – is iffy. It is very possible a new Penn State president would want his/her own person in the A.D. job, and any candidate search would need to be national in scope, according to the Freeh Report recommendations

In the past year, Erickson – who came to Penn State as a professor in 1977 and spent 13 years as provost, following stints as dean of the graduate school and V.P. of research -- received a raise of $85,000, to raise his compensation to $600,000 after 36 years with the university. Joyner, a former member of Penn State's Board of Trustees, has received a salary of $396,000 since he was hired in November 2011.

3. What kind of raises are in store for Penn State’s other 12,000 employees?

Penn State’s fiscal year begins July 1, and that is when any raises for Penn State staff and faculty – when given – typically kick in. On average, raises have been in the 2 percent range. Twice in the past five years there have been no or deferred raises. As of now, there will be a GSI (general salary increase) across the board for 2013-14, but no mention of percentages. However, it likely will kick in during September/October, not the typical July date – a big cost-savings step. (Full disclosure: Just like O'Brien, I am a Penn State employee.)

4. Will the money Penn State saves by the reduced number of football scholarships – 18 fewer in 2013-14, then 20 fewer in the next four succeeding seasons – cover the cost of O’Brien’s raise of $2.155 million over the next four years?

Yes. Using Penn State’s online “College Cost Calculator,” a reduction of 98 scholarships over the next four years should save Penn State athletics at least $2.7 million dollars. Those costs are for tuition, books, room and board, and fees only – factored as if the players were typical students, and not including additional football perks, like medical care and equipment.

It is also assuming costs rise about 3 percent per year; players will attend one summer session; and half of the players receiving scholarships are from Pennsylvania and half are from out of state. Penn State athletics does not get “free” tuition from the overall university; it must reimburse the school for tuition and room and board expenses.

5. O’Brien has been rewarded for his loyalty and success. What about Penn State’s fans?

Minutes after O’Brien’s raise was announced, I received this text from a longtime member of the State College business community, who has supported Penn State football – and overall athletics – in myriad ways for decades:

“How about throwing PSU Football Season Ticket Holders a bone? FREE Parking.”

It’s a thought well worth considering.

6. What was Joe Paterno’s salary in his final season as Penn State’s head coach?

According to USA Today’s annual salary survey, in 2011 – his 46th season as head coach – Paterno’s guaranteed salary was $1,022,794. That ranked him 11th among Big Ten head football coaches, just ahead of Purdue’s Danny Hope, and 64th in the country.



Mike Poorman has covered Penn State football since 1979. He is a senior lecturer in Penn State's College of Communications and teaches a pair of classes in the John Curley Center for Sports Journalism: “Sports Writing” and “Introduction to the Sports Industry.” He created and taught for several years the Center’s course on “Joe Paterno, Communications and The Media.” Follow him on Twitter at http://twitter.com/PSUPoorman. His views and opinions do not necessarily reflect those of Penn State University.
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June 24, 2013 7:05 AM
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