October 11, 2007
The Franchione Contract
Posted by Gordon Smith

Dennis Franchione's Texas A&M football team is 5-1 on the season, but his job is in jeopardy. For the past three years, "Coach Fran" has been selling a newsletter called the VIP Connection for $1,200/year to selected boosters without the knowledge of Texas A&M Athletic Director Bill Byrne. According to ESPN, Byrne said:

I think the whole thing started as something well-intended, to keep a number of people who were good donors to the university forever informed about things that were going on. It just got out of control.... My supposition is someone came to Fran and said, 'You mind if we do something like this for some people?' His thought was, 'No. Go ahead.' My guess was he never saw it after that. He concentrates on football.

Let me get this straight: Franchione sells what purports to be inside information about the football program, but he has nothing to do with generating that information? I suppose Franchione could have some lackey write the newsletter, but for $1,200/year, I would expect a bit more.

According to A&M, Franchione's activities generated $80,000 of revenue and a net profit to Franchione of $37,806.32. This for a fellow whose contract [UPDATE: It appears that this contract  is not Franchione's current contract (see comments). Though many of the non-numerical provisions seem to be the same as those discussed below, Franchione apparently received a raise in 2006.] provides for an annual salary of $1,700,000/year, plus two vehicles, a country club membership, and incentive payments for winning the Big 12 Championship ($37,500), appearing in a bowl game ($37,500 for a non-BCS bowl, $75,000 for a BCS bowl, or $100,000 for the "national championship" game), being named Coach of the Year ($25,000 for Big 12 coach of the year and $50,000 for national coach of the year), or winning the national championship ($100,000). Did I mention the $3 million life insurance policy? Or $12,000/year expense allowance?

Forget Aggies. How about Hogs?

But did he breach the contract? Almost certainly. Here are some possibilities:

  • "Franchione will not ... engage in any business transactions or commerce ... that may cause discredit to the University."
  • "Franchione will not ...knowingly engage in, support, or tolerate any action violative of any governing constitution, by-law, rules, regulation,policy or procedure of the Conference or the NCAA or the University."
  • "Franchione will not ... accept or receive any monies, benefit or any other gratuity whatsoever from any University booster club or other benefactor if such action would be a violation of NCAA legislation now or hereinafter enacted."
  • "Franchione shall report annually in writing to the President of the University through the Athletic Director ... all athletically related income from sources outside the University.... This disclosure of outside income is required by Article 11.2, of the NCAA Bylaws."
  • "Franchione may not be compensated by an individual or commercial business outside the University for employment or assistance in any manner or from any source where such outside or third party compensation would be in violation of NCAA Rules or the rules of the rules of the Conference with which the University is affiliated."

Again from ESPN: "The AP also obtained copies of Franchione's annual outside income reports, and none include income from Web sites." The ESPN story also lists other possible NCAA and Big 12 rules violations connected to the newsletter.

If Franchione is fired for cause based on the breach of contract, he would lose his right to liquidated damages under the contract. That's $141,667/month until the contract expires. The bright side is that the contract expires in December 2008. [UPDATE2: According to news reports, Franchione's new contract, granted in 2006, extends through 2012.]

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