South Carolina company works to save universities money when they part ways with coaches

LOUISVILLE, Ky. (WDRB) -- With another coach gone, the University of Louisville will pay another multimillion dollar departure agreement.

The university will pay $4.8 million to now former head basketball coach Chris Mack. Three years ago, it paid about $14 million to former football coach Bobby Petrino.

Major colleges have paid more than $500 million to coaches on their way out in the last decade. While the numbers may be staggering, a South Carolina company wants to help turn the tide on the huge amounts of guaranteed money.

Game Point Capital works with 20 schools across the country in an effort to create contracts with a different twist.

"What we're advocating really is to pay coaches in a different way," Will Hall, co-founder of Game Point Capital, said. "A more reasonable base salary, and then big performance incentives, and then coaches get paid if they perform, as opposed to getting guaranteed money regardless."

In the past, the company has worked with Purdue. It now works with Iowa, the College of Charleston and many other schools across the country with the goal of minimizing guaranteed dollars in coach contracts. It's something Wall hopes UofL does for its next basketball coach.

"In our view, they really need to start transitioning into pay for performance," he said. "And I think everybody would be on the same page. I mean, if I'm a Louisville fan, I want a guy who's going to come in and who's going to bet on himself as opposed to 'I'm going to get paid millions of dollars whether I succeed or not.'"

Maybe the biggest and best example of a lower guarantee is Michigan football coach Jim Harbaugh, who recently went from being the highest paid coach in the Big Ten with a guaranteed $5.5 million a year in 2014. Now, he's the eighth highest paid thanks to a new deal that dropped him down to around $4 million a year with bonuses for winning conference titles and playoff games. If he were to get fired with three years left on the deal, Michigan could potentially save $4.5 million.

Hall's company devises the analytics and algorithms to figure out how much to charge a university to insure itself for bonus payouts.

"You see these massive guaranteed contracts structured as they are, I think it's almost a foregone conclusion that a lot of schools are going to end up paying pretty big buyouts on the back end," he said.

In the near future, UofL will sign a contract with a new men's head basketball coach. Who that is remains to be seen, as does the amount of guaranteed money in the deal they will sign.

In recent years, the university has shelled out more than $30 million with the departures of Petrino and Mack, as well as deals reached with departed Athletics Director Tom Jurich and a settlement with John Schnatter over naming rights at Cardinal Stadium.

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