Spurrier Still Profiting from Under Armour Contract

November 23, 2015

Investigative Reports

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Steve Spurrier

How USC’s mad, irresponsible quest for football greatness ended with a raw deal

As South Carolina football hit a 25-year low following Saturday’s loss to The Citadel, the man who walked out on the team mid-season will receive $1 million more than originally reported through April of 2016, according to contracts obtained by The Nerve through the Freedom of Information Act.

Already being paid the remainder of his $4.028 million salary through the end of the season despite quitting in October thanks to a controversial decision by the USC administration, Spurrier will receive another $1 million for FY 2015-16 as the final cherry on top of a sweetheart deal with Under Armour the school signed in 2010.

The Under Armour deal has not only enriched Spurrier personally at the expense of the university over the years– he’s taken a whopping $5.5 million of the total $6.2 million paid to the school in rights fees from 2010-2016 – but also has prevented other programs such as men’s basketball from establishing a competitive footing.

Spurrier has earned approximately $32.5 million since 2004 as head coach of the Gamecocks, according to a review of his contracts by The Nerve. His two sons also have profited, working directly for him at generous salaries (Steve Spurrier Jr. earns $400,000 as an assistant coach while youngest son Scott earns $61,200 a year as an athletics administrator).

And while Spurrier continues to draw his salary as the state’s highest-paid employee and continue to cash huge Under Armour checks (the next next $250,000 payment is scheduled for Dec. 1), the deal which has allowed him to take 83 percent of USC’s total payments for athletic apparel rights while saddling other programs with a product they say doesn’t help to recruit is no salve to USC fans staring at the worst season in 15 years.

“A REAL COOL DEAL”

Spurrier’s most-recent Under Armour payment of $250,000 came on Oct. 1 – just two weeks before he officially announced his resignation (not his retirement, he made a point of clarifying) on Oct. 13.

On Oct. 18, in a guest appearance on ESPN’s College Gameday, Spurrier was asked to make predictions on a game involving another Under Armour school, Utah.

“[Under Armour CEO] Kevin Plank would fire me if I picked against an Under Armour school,” he said, smiling.

That use of the present tense speaks to the closeness of a relationship important for both men dating back to when the two first struck a deal making Under Armour the football-only apparel supplier in 2007.

Speaking to reporters at the time, Plank admitted to Spurrier being the main attraction for the Maryland-based company that in 2007 only had three schools under contract – Maryland, Auburn and Texas Tech.

“Without question, a leader like Steve Spurrier is someone we want to align our company with,” Plank said.

Also without question, Spurrier’s national reputation helped Under Armour. His “click clack” commercials and steadfast loyalty have played a role in UA now boasting a roster of 15 major college athletic programs, allowing Under Armour a place at the table dominated by Nike, which has 68 of the 128 schools in the Football Bowl Subdivision (the major conferences)and Adidas, with 31.

Whether the deal was in the best interests of the university as a whole can be argued.

When Under Armour became the football-only outfitter of the Gamecocks in 2007, it bumped up the $450,000 Russell Athletics paid the university annually for four sports to $1.8 million for football alone.

At the time, then-athletics director Eric Hyman hailed the agreement as “a phenomenal deal for the University of South Carolina,” while Spurrier echoed Hyman’s sentiments.

“It’s a real cool deal,” he said.

Indeed it was – for Spurrier. Whether it was for the school as a whole can be argued, because though initially lucrative for USC, its percentage of the take began to dwindle rapidly when the Gamecocks entered into a six-year contract with Under Armour through 2016 as the official outfitter of all USC athletic teams, culminating in the school’s receiving just $100,000 of the $1.1 million Under Armour paid USC in FY 2014-15. By contract, the other $1 million – 90 percent of the total – went directly to Spurrier.

Suddenly, that $450,000 a year from Russell Athletic doesn’t seem so bad.

HIGHER PAY, DIMINISHING RETURNS

In a competitive market where big-name apparel companies such as Nike, Adidas, Reebok, Russell Athletic, Converse and others pay millions to colleges and universities (and even high schools) for the right to outfit their teams and enjoy the prestige/exposure/brand development opportunities that come with it, the relative pittance USC has received while Spurrier has taken an average of 83 percent per year – from a low of 66 percent in FY -11 ($600,000) to a high of 96 percent in FY 2012-13 ($962,500) seems counter-intuitive to dealing in the best interests of the university as a whole.

“There’s no question the university does what Steve Spurrier wants,” said John Crangle, executive director of the citizens watchdog group Common Cause. “You can’t tell me paying him such incredible amounts of money and continuing to do so after he quit on them is in the best interests of anyone other than Steve Spurrier.”

Not only are the generous terms of Spurrier’s Under Armour deal eye-opening, so is the contract language on the part of USC.

“From the (yearly) Payment, University directs Under Armour to pay the following amounts directly to the University’s football Head Coach, Steve Spurrier, and Under Armour agrees to honor such request by University.”

Spurrier’s payments are due “no later than July 1, October 1, December 1, and April 1,” the contract reads. Following is the entire payment schedule of the contract, with breakdowns to show how much of the total Under Armour paid directly to Spurrier:

  • $900,000 in FY 2010-11 ($300,000 to USC, $600,000 to Spurrier)
  • $950,000 in FY -12 ($112,500 to USC, $837,500 to Spurrier)
  • $1,000,000 in FY 2012-13 ($37,500 to USC, $962,500 to Spurrier)
  • $1,050,000 in FY 2013-14 ($300,000 to USC, $750,000 to Spurrier)
  • $1,100,000 in FY 2014-15 ($100,000 to USC, $1,000,000 to Spurrier)
  • $1,200,000 in FY 2015-16 ($200,000 to USC, $1,000,000 to Spurrier)

In addition to those sums, Spurrier also received incentives totaling $50,000 – $10,000 each for going to five bowl games from 2010-2014, raising his direct compensation from Under Armour since 2010 to $5.2 million.

In fact, incentives were the only way any other university coaches could receive money directly from Under Armour, with former baseball coach (and current athletic director) Ray Tanner and women’s basketball coach Dawn Staley each earning money for their incredible success. For winning back-to-back national championships in 2010 and 2011 Tanner earned $500,000 ($250,000 each) plus $25,000 in 2012 for making the College World Series. For USC’s SEC championship in 2011 Tanner earned $15,000, raising his total take from Under Armour in just three years as head coach to $540,000 – a fact not to take lightly as Tanner currently is negotiating a renewal of UA’s contract.

For Staley’s success in 2014-15 she earned $50,000 for making the Final Four and another $15,000 for winning the SEC for a total of $65,000. Add to that her previous NCAA tournament runs and SEC title in 2014 and her total sum from Under Armour is $115,000 since 2010.

By contrast, no men’s basketball coach has earned a penny in incentives from Under Armour since 2010, and for those who know, a big reason for that is Under Armour itself.

IT’S GOTTA BE THE SHOES

No program has been more negatively impacted by the University of South Carolina’s Under Armour contract than men’s basketball. In a sport nationwide where the right – or wrong – apparel company can make or break a program’s success, the Gamecocks have been on the outside looking in in the footwear race and continue to pay a price in recruiting that can be measured in the loss of top targets to Nike schools. Earlier this month, star recruit Seventh Woods stunned Gamecock faithful when he chose the North Carolina Tar Heels — a Nike school — over USC. While not always a deciding factor, Rich says it’s wrong to overlook its importance.

“It’s a fact of life that Nike schools out-perform and out-recruit those of other shoe makers with less prestige in the basketball community,” said former USC player and S.C. Pro-Am organizer Carey Rich. “For as silly as it may seem to adults, it’s all about the shoes for the kids.

“It’s 15-, 16- and 17-years olds making the decisions, and at the grassroots level Nike will always be king.

“A couple of years ago every Final Four school was a Nike school. That’s the biggest college sports stage in the world. Duke is Nike. Kentucky is Nike. UNC, Syracuse, Michigan State, UConn, Ohio State – all Nike. It’s just a different connotation that goes with Nike that no one else has.”

While coach of Kansas State, current USC men’s coach Frank Martin’s teams wore Nike and he enjoyed the recruiting advantages it brought just as he labors against the negatives now, whether real or perceived,  Under Armour’s lack of a basketball reputation brings.

“There is no question in my mind that not being a Nike school is has cost them recruits they were trying to get in on,” Rich said. “You’re talking about people even for whom USC was in the final two for, and they go elsewhere.”

Rich said though NBA star Stephon Curry’s wearing of Under Armour shoes has begun making inroads with young people, Nike has had 30 years of the best brand recognition in sports history since Michael Jordan first took the world by storm.

“For as good as Steph Curry is, Nike is Nike, and young kids still covet a pair of Jordans or Lebrons,” Rich said. “They want to wear the best, and Nike has that perception.”

In the SEC, every school but USC and Auburn wears Nike except Mississippi State and Texas A&M, which wear Adidas. Auburn and South Carolina, the only two Under Armour schools in the SEC, are also the only two SEC schools not to have made it to the NCAA Tournament in the past 10 years.

THE ROAD AHEAD

Under Armour’s contract with USC expires June 30, 2016, and the company is interested in renewing it, according to published reports, though the details likely would change significantly without Spurrier around to take 83 percent of it.

Tanner has indicated he’s open to seeing what the market bears in terms of signing with another apparel provider, though according to the terms of the existing contract neither Tanner nor the university can enter into any negotiations with anyone else until 180 days remain on the contract, which would be Jan. 2, 2016. Under Armour also has the right of first refusal on any third-party offer extending to 120 days after the termination of the contract on June 30, 2016.

At least in principle, despite his affirmation on ESPN about still being employed with Under Armour, Spurrier briefly broke ranks with UA in a Nov. 6 visit to Lincoln, Nebraska, to attend a football game where he posed for pictures wearing a Nebraska pullover with an Adidas logo in a move that sent the Twitterverse and message boards into a frenzy of anger and speculation.

And while Spurrier has been a guest of honor for football games at Michigan and Nebraska, the players, coaches and fans he abandoned have been left to endure lows no one thought possible just two years ago, with the toughest pill to swallow coming up on Saturday when arch-rival Clemson, the team he once beat five straight times, comes to town with an undefeated season and No. 1 national ranking – two things Spurrier could not achieve in Columbia.

But rather than be on the sidelines – or in the stadium, even, on Senior Day for players he recruited – for support, Spurrier has said he won’t attend.

Whether that’s out of some sort of respect or the current coaches or the razzing he would invariably take from Clemson fans eager to see him on the tail end of a whipping is anyone’s guess.

What is certain is that come Dec. 1, while his former players are turning in their equipment, Spurrier will cashing a check for $250,000 from Under Armour and continuing to draw his $4.028 million salary.

It’s good to be Steve Spurrier. Always has been. Always will be.

Reach Ron at 803-254-4411 or email him at ron@thenerve.com. Follow him on Twitter @RonAiken and The Nerve @TheNerveSC.