The Coaching Carousel in Big-Time Intercollegiate Athletics: Economic Implications and Legal Considerations

Abstract:     
Schools continue to reward football and basketball coaches with contract extensions and salary raises after a winning season but then allow them to breach their contracts and go work for, and be solicited by, their competitors with impunity. To be certain, this is not representative of free market competition but rather unfair competition. College coaches are not at will employees. They also exhibit highly unique skills and abilities and promise to perform exclusively for the school for a multi-year term in exchange for a guaranteed salary and performance bonuses for the duration of that period. This paper takes an extensive look at the economics of college coaches’ contracts and uses it as justification and support for universities to look closer at all of their legal options, rights and remedies, including the use and validity of liquidated damages clauses given the unquantifiable nature of the damages incurred by the school as a result of the loss of a head coach. It also addresses the difficulties of suing for damages in the absence of a liquidated damages clause and discusses the viability of the negative injunction to prevent a coach from working for another institution. This paper concludes by addressing some practical considerations for schools in seeking injunctive relief. The purpose of this paper is not to criticize how much money coaches make, but to encourage tax-exempt academic institutions, which owe a moral and ethical duty to their student bodies, their student-athletes and society at large, to exercise fiscal responsibility and restraint in firing, hiring and retaining coaches.

Number of Pages in PDF File: 93

Keywords: contracts, economics, negative injunction, equitable relief, liquidated damages, college coaches

JEL Classification: A1

Accepted Paper Series