Firing Hoke: A Financial Non-Factor

The University of Michigan tends to spend money on some fairly outrageous things that the student body does not necessarily want or care about – i.e. spending $400,000 to relocate a tree. Tuesday’s rally and petition, however, made one thing abundantly clear – we want Brady Hoke and Dave Brandon fired. While the state of Dave Brandon’s job is a bit murky due to politics, it seems that Hoke is almost certainly on his way out.

In March of 2011, Hoke signed a six-year contract that would run through 2016 and have a potential worth of over $18 million. His 2011 salary included a $300,000 base with $1.7 million in additional compensation (which included broadcast, promotions, etc.). This additional compensation figure is supported by an additional $100,000 each year. The contract also included a $1.5 million bonus after his third and sixth year in command, and for any bowl game appearances and conference championship games. Hoke also receives deferred compensation bonuses which have totaled $1.05 million as of the end of last season.

According to the contract, should the university want to replace Hoke for any reason other than violating his contract, the buyout starts at $8 million in his first season and de-escalates to $2 million by the final two years. Year four of the contract officially ends on December 31, 2014, so if he is fired by then, the contract dictates that the university owes Hoke $2 million.

This $2 million buyout assumes that Hoke would have been fired without cause. If he is fired with cause (i.e. the university fires him based on NCAA violations, gross misconduct, etc.) they will not have to buy him out.

Ultimately, if Michigan fires Hoke before January 1, 2015, he will have earned $13.4 million throughout his time at Michigan (he has currently earned approximately $11.4 million, so this figure assumes he has to be bought out). If Hoke remains at Michigan for the duration of his contract, he will earn at least an additional $8.35 million [mlive.com].

If keeping Hoke means dragging along a heavily disgruntled fan base, it certainly seems that firing Hoke at the end of this season makes sense. It is very hard to tell how much firing him would cost in the long run (since this figure would have to account for a new coach’s contract, his potential buyout from wherever he comes from, and Hoke’s potential buyout). Regardless, any way you slice it, getting rid of a clear point of contention seems to be far and away the best move.

Michigan’s fan base is the lifeblood of the program, and keeping Hoke puts that in immediate jeopardy. Especially for Michigan, the costs of canning Hoke are a non-factor.

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