This coaching search is complicated. Five days ago it appeared to be straight-forward. Representatives of the Board of Regents and President Loftin along with a few donors reached out to Kevin Sumlin's agent and by the time Mike Sherman was fired last week, there was a tentative framework of an agreement to be the next head coach at Texas A&M. I heard last Thursday from several donor sources that it was a "done deal." Over the next couple of days, the word spread about this quicky deal and it didn't go over well with the rank-and-file donors who want an extensive search conducted by the proper administration and not a handpicked favorite by a couple of regents and a donor.
Anyway, I think cooler heads prevailed and President Loftin and the BOR decided they needed to slow down, initiate a search, and bring AD Bill Byrne into the process. To be honest, nobody knows the internal dynamics going on here and how involved Byrne will be in the interviews that begin tomorrow in New York, where the College Hall of Fame festivities are taking place. What we do know is that Larry Fedora, Kevin Sumlin, and Charlie Strong are expected to interview with others like Kirby Smart still in the running for an interview but considered an underdog to get the job.
Personally, I've been advocating for an experienced BCS conference head coach. But, from what I'm hearing the finances may not be in place to spend that kind of money. I've heard that the 12th Man Foundation has been calling significant donors looking for some funds to support the coaching change, but my sources haven't heard how it's going so far. However, it's not a stretch that finances are a factor in play here. Mike Sherman will be owed between $5.8-$8 million. The loss of Big 12 TV revenue (exit fee) will be between $12-$18 million. A new coach could cost as much as a million dollars more than what Sherman was making. Then you have the football village complex that just broke ground and the nine-digit price tag for the future Kyle Field renovations. That's a lot of needed working capital.
I mention this because finances could have an impact on the 3-4 "cheaper" candidates as well. From what I'm hearing, the search committee really will weigh these interviews heavily in the decision, but if two candidates both impressed the committee or there is an even split among the group, the tiebreaker could very well come down to the transaction costs of hiring the candidate.
Going into the weekend, Kevin Sumlin was the heavy favorite, but both Charlie Strong and Larry Fedora are gaining traction. Sumlin still has the support of a couple of key decision-makers, but there's no question that the bloom came off the rose after the devastating loss to Southern Miss and Larry Fedora. Had you asked me Friday, I would have said the odds of Sumlin becoming Texas A&M's next coach was 75% or higher. By Saturday morning when President Loftin decided to expand the search, Strong had become a co-leader to get the job along with Sumlin. Then after Fedora's dominant performance against UH, he jumped into serious contention. Fedora continues to gain momentum going into Monday's interviews. Now, the interviews will end up likely deciding who is offered the A&M job, but as we go into the interview process, I'm hearing that Fedora is now the slight leader, and he also wins the financial tiebreaker.
Fedora currently makes $685,000 a year and he only has two years left on his contract. He also has the lowest buyout, less than half a million dollars. So when projecting Fedora's financial hot button, you figure he'll jump at $1.0 - $1.5 million. So let's assume a five year deal, that's a minimum $5.5 million to a maximum of $8.0 million in total transaction costs (salary plus buyout).
Let's compare that to Kevin Sumlin who currently makes slightly over $1 million but University of Houston is proposing an extension and raise to nearly $2.0 million annually. So A&M will likely need to offer an annual salary of $2.5 million. The buyout is a modest $600,000. The five year transaction cost ranges between $10 - $13 million.
What surprised me in researching transaction costs are the expenses in landing Charlie Strong. He received a seven year extension from Louisville recently that raised his salary to $2.3 million (base w/o retention bonuses) with a hefty buyout of $2.5 million. At a projected annual salary of $2.8 million to lure him, the total five year transaction costs range from $14 - $16.5 million.
So Strong is over twice as expensive as Fedora. In fact, my dream "established BCS conference coach" is Georgia's Mark Richt who only has two years left on his contract and he's a little bent out of shape with Georgia threatening to fire him in September. His five year transaction costs of $15-$18 million are only slightly higher than Strong's transaction costs.
So when I hear that Fedora has gained a lot of momentum going into the interview process, I think it's his job to lose because he has the "homefield advantage" with such a low financial threshold. Kevin Sumlin has his supporters on the committee so a good interview can land him the job.
As far as Strong, I think he'll need to absolutely blow away the committee and convince them that he's head and shoulders ahead of the other two and worth the extra $5-10 million in costs over a five year contract.
We've mentioned possible established candidates like Art Briles, but it will take over $3 million a year which puts him in the Mark Richt zip code. If the other younger candidates don't satisfy the minimum requirements in the interview, only then could I see A&M go this route. It's simply too expensive, especially if one of the younger candidates impresses in New York.
Bottom line, nothing has been decided and the interviews will go a long way in selecting the next A&M coach. With that said, Fedora may be the slight leader over Kevin Sumlin but it's likely too close to call. I do think Strong will have to nail his interview to get the job while the other two fail to impress the committee.
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