Let’s say you’re a minimum wage worker and you screw up and get fired. What’s your payout? You’re lucky if you get your last paycheck.
Now, let’s say you’re a CEO of a Fortune 500 corporation and you run your company into the ground. What happens? More often than not, you get all the millions that you would have been paid had you kept your job for the rest of your contract period. Essentially, you get paid to go away.
That’s bad enough when it happens in the private sector because, not only is it deeply unfair, but it provides no “moral hazard” — you get rewarded no matter how well you perform. But if private corporations’ boards of directors want to do that and their shareholders don’t object, then well, that’s their problem.
But it’s an entirely different thing when it happens in the public sector. Of course, the governor and his cabinet members don’t get contract buyouts. But other public employees — indeed, some of the most well-compensated ones — do get them. I’m referring to coaches, and I bring it up now because Badgers football fans are starting to call for the firing of coach Luke Fickell after another forgettable season. If Bucky doesn’t beat Minnesota on Friday, the team will miss the bowl season for the first time in 23 years.
And this from Fickell, a coach who was expected to make the Badgers competitive for a national championship, as he had at the University of Cincinnati. But so far in two seasons at Wisconsin, Fickell has a dismal 13-12 record and he’s 8-9 in the Big Ten.
But what happens if the Badgers fire Fickell? He gets paid anyway. In fact, he is among the highest paid coaches in college football. His base salary was $7.5 million a year starting in 2023 and he gets an automatic increase of $100,000 each year of his seven-year contract, regardless of how his team performs. But if they do better, he’s eligible for bonuses. In other words, he can’t lose, only win — while his team can seem to only lose, not win.
And if things only get worse the UW Athletic Department would have to shell out 80% of the remainder of his contract just to make him leave, so that they could start over. By my calculations, that would be something like $31 million if they were to part ways with him after this season, which they won’t, in part because, well, it would cost them $31 million. In this sense, failure is job security. (This may seem like a bargain since Texas A&M last year paid Jimbo Fisher $75 million to find another job.)
Fickell would be required to look for other work in the football world and any salary he might get paid would be deducted from what the UW owes him. But essentially, Fickell is held harmless for his failure — unless you think getting only 80% of a $7.5 million plus annual salary qualifies as harm.
By comparison, the Badgers would be limited to paying players — all the players — no more than $22 million under a pending settlement to an antitrust suit brought by the players.
We’ve seen this movie before. When Fickell threw his offensive coordinator, Phil Longo, under the bus a couple of weeks ago, it cost the athletic department $1.7 million to buy out his contract. And when the offensive line coach was sent packing in January, that cost $650,000.
But, wait, there’s more. Athletic Director Chris McIntosh fired coach Paul Chryst in the middle of the 2022 season and had to pay Chryst $11 million to leave. It would have been even more, but McIntosh dropped the requirement that Chryst look for other work and deduct those earnings. So, Chryst walked away with $11 million, no questions asked.
Then McIntosh replaced him with interim coach Jim Leonhard, but declined to hire him for the permanent job. The department paid Leonhard a million dollars to walk away. And then he hired Fickell at one the richest guaranteed contracts in college football, and by far the most generous in Wisconsin athletics history.
He did that because the football team has to win in order to produce the revenue that pays for virtually everything else in Badgers athletics. Men’s basketball produces some revenue and everybody’s proud of the women’s volleyball team, but it’s football that pays most of the bills.
And so, McIntosh’s bold moves in firing Chryst and Leonhard to get to Fickell were a gamble to create a national football powerhouse that would produce the revenue to pay for everything else. That tied McIntosh to Fickell’s success — or lack thereof. If Fickell succeeds, so should McIntosh. But if he fails, well, the athletic director should go down with him. Remember moral hazard.
Maybe it’s too early to give up on Fickell. Just last week he landed a hot high school quarterback from Florida named Carter Smith. But there’s no guarantee that even a top prospect will pan out. Remember Graham Mertz? No? I’ve made my point. And Fickell’s team has a lot more problems than just its quarterback. Last week against equally mediocre Nebraska it was the defense that couldn’t make a play. So, yes, Fickell could still turn this around, but that’s looking less likely every Saturday.
Which brings us to the topper. After Fickell’s first unimpressive season, what did UW Chancellor Jennifer Mnookin do? Put McIntosh on notice that he’s on thin ice because of the Fickell hire? No. She gave McIntosh a new five-year contract with a 41% pay increase. He now makes $1.45 million a year with an automatic $50,000 annual increase regardless of performance, plus up to another $200,000 in bonuses. Like Fickell, he also gets two free cars and a country club membership.
And, of course, Mnookin sweetened his buyout arrangement. If Fickell fails and McIntosh is tied to him (as he should be) and he gets fired, the athletic department will have to pay him 75% of what they’d owe under the remaining time on his contract. That’s right. Still more money for nothin’.
And it’s not just the Fickell hire. McIntosh leads a department that cluelessly planned to destroy commemorative bricks that fans paid for outside of the old, now razed, Shell. The same department that angered long-time basketball season ticket holders by unceremoniously dumping them to create a high-end profit center near the court. And this is the same McIntosh-led department that last summer tore up the Camp Randall turf, which was only two years old, in order to install heating coils — at a cost of $5.5 million. (In its first use during the high school football championships last week nobody seemed to know how to work the thermostat.)
Why did they replace a perfectly good, virtually new field? Well, because the Badgers might make the expanded college football championship playoff some year and have to host a home game in December.
I kid you not.
So, here’s the answer. It’s within Mnookin’s power to end all this insanity. She can simply tell the athletic department that there will be no more golden parachutes. If you don’t produce, you get fired and you can look for a new job, just like about 99% of us. In other words, reinstate moral hazard. Coaches are always talking about stepping up and taking responsibility. Not making excuses. Well?
But won’t this mean that Wisconsin won’t be able to compete for the best coaches? I offer one devastating counter-argument. His name is Luke Fickell.
Dave Cieslewicz is a Madison- and Upper Peninsula-based writer who served as mayor of Madison from 2003 to 2011. You can read more of his work at Yellow Stripes & Dead Armadillos.
