On January 2, 2019, Dana Holgorsen and Chris Pezman signed the memorandum of understanding (MOU) to formalize Dana’s hire. Here, we breakdown the MOU and highlight some of the terms that are different from previous contracts for UH head football coaches.
A few items we knew:
- Dana’s annual base salary is $300,000 per year for 5 years.
- Non-salary compensation starts at 3.4 million in 2019 and escalates each year. It tops off at $4 million in 2023.
- Dana owes $12.9 million if he leaves in calendar year 2019. His buyout decreases yearly until it reaches $1,000,000 in 2023. The biggest decrease happens on January 1, 2020, when the buyout reduces $3.8 million.
And here are some things we didn’t know:
- If a contract is not signed within 60 days, the MOU will serve as the employment contract.
- The $4,500,000 staff pool includes pay for assistant coaches, operations staff, quality control, analysts, recruiting personnel, and any other “off the field” football-only staff. Essentially, anyone Dana hires or retains.
- Any UH buyout includes all future base salary. UH is also on the hook for the full non-salary amount from 2019-2021 and 60% of the non-salary compensation in 2022-2023.
- If UH wins the conference championship and a NY bowl, the final two years of non-salary compensation become fully guaranteed.
- There is no deferred compensation in Holgorsen’s new deal. Deferred compensation was introduced into UH athletics contracts as part of Tony Levine’s MOU, signed in December 2011. Deferred compensation was also part of Tom Herman’s and Major Applewhite’s contracts.
- Prior to Herman’s first contract, UH only paid base salary when a head coach was terminated. Herman’s two contracts and Major Applewhite’s deal gave each a prorated portion of earned deferred compensation upon termination. Herman’s second contract changed the UH buyout to 50% of base salary and non-salary compensation upon termination.
Side note: Major Applewhite is due a lump sum of $500,000 for the prorated portion of his earned deferred compensation. But the due date for Major’s deferred compensation is ambiguous – the contract lays out two different time frames: 30 days here and 60 days here. Either way, UH owes the full amount no later than February 28, 2019.
- If UH is invited to a P5 conference, Dana gets an increase in compensation as well as a $1 million bonus, payable within 24 months.
- Tom Herman’s contract included bonuses for winning 8, 9, 10, 11, and 12 games – the total bonus for getting to 12 wins was $75,000. Major Applewhite’s contract included $100,000 bonuses after each of 9, 10, 11, and 12 wins. The total bonus for 12 wins was $400,000.
- Holgorsen’s MOU has no such bonuses – likely due to his much higher pay and UH’s increased expectations. Bonuses for winning a non-NY6 bowl ($10,000) and making a NY6 bowl ($75,000) are lower than Applewhite’s similar bonuses ($25,000 and $100,000, respectively).
- Herman and Applewhite were rewarded for season ticket sales over 17,500 but no such provision exists in Holgorsen’s agreement. I believe this is again about expectations.
- Major’s contract was largely built on low expectations. Besides the bonuses above, his contract gave him a $7,500 bonus for being ranked at any time during a season and $10,000 for being named conference coach of the year.
- Holgorsen’s deal includes neither of those bonuses but does include a new cumulative bonus structure for making the College Football Playoff ($200,000) and for winning a semifinal game ($250,000). Higher expectations.
- A slight change from previous contracts was made in the language used for future scheduling. Here is the wording from Herman’s and Applewhite’s contracts:
And here it is from Holgorsen’s MOU:
Perhaps a minor change but it comes across as Pezman wanting to work in collaboration with his new coach on future scheduling.
Obviously, the MOU is not a finalized document. Herman agreed to his initial deal in mid-December but his contract was not signed until the following March (Applewhite reached his agreement on December 11, 2016, but the contract was not signed until April, 2017).
Plenty can change from MOU to signed contract but UH’s heightened commitment and level of expectations are now codified.
To view or download the entire MOU, click here.
Cover Photo By Mario Puente