The University of New Mexico and former men’s basketball coach Steve Alford have reached an agreement in principle on the buyout he owes his former employer.
UNM issued a news release Friday stating the buyout amount plus savings of deferred compensation payments, incentive bonuses would net the university a “favorable” outcome of $625,000.
UNM had demanded $1 million and Alford had offered $200,000. After sorting through who owes who what, the additional “hard” dollars Alford and his new employer, UCLA, will owe UNM come to $300,000.
UCLA, meanwhile, said it was blindsided Friday afternoon by UNM’s announcement. The two sides have not yet signed any agreements, and UCLA made it clear that it is not paying the $625,000 initial media reports implied in UNM’s statement.
“On Friday afternoon, the University of New Mexico issued a news release stating that they had reached a buyout agreement with their former Men’s Basketball Coach, Steve Alford, who last month accepted the head coaching job at UCLA,” read an emailed statement UCLA sent to the Journal on Friday.
“The UNM news release does require some clarification. While there has not been a signed agreement, New Mexico has agreed to accept $300,000 of their original $1 million demand. A larger figure included in UNM’s release appears to include certain bonuses which Coach Alford previously agreed to forego (sic) when he decided to terminate his contract there and accept the offer from UCLA.”
UNM’s initial news release acknowledged there were “still some final details to resolve,” but added that the resolution “results in a net benefit of approximately $625,000, which is clearly a positive for UNM.”
“It’s pretty convoluted but the simple answer is, and these are approximate figures, approximately $325,000 in savings to UNM for compensation not paid and then $300,000 in buyout,” said Kimberly Bell, associate university counsel at UNM. “And it’s an agreement in principle, nothing signed yet. There are some details to work out.”
Alford on March 30 announced he was leaving as the head coach of the Lobo men’s basketball team to take the same position at UCLA. The contract extension for which he signed a term sheet March 18 stipulated a $1 million buyout penalty if he left UNM. That contract was supposed to go into effect April 1.
The term sheet also made clear that the agreement was contingent on a final contract that Alford never signed.
UNM has maintained that since Alford did not give a 30-day notice, required of both his previous contract and the one supposed to start April 1, he was still employed by the university through April 29. Thus the extension went into effect, and so did the $1 million buyout clause.
The Journal’s understanding of Alford’s bonuses and incentives is that in June he would have collected a $100,000 payment (deferred compensation) into his retirement account. He also may have been due approximately $165,000 in incentive bonuses, among that payments for winning the Mountain West regular-season and tournament titles, being named the league’s coach of the year, his team beating multiple Top 25 ranked teams during the 2012-13 season, and reaching the NCAA Tournament.
There likely would have been legal debate over whether he could have accepted those incentives since he would not have been employed in June, when incentives and deferred compensation are dispersed.
Alford said in an email to the university in April that he was not seeking that $265,000.
Alford had stopped his direct deposit arrangement between UNM and his bank, so on April 29, operating under the premise he was still under contract, the university issued a hard check and asked his wife, Tanya, who still lives in Albuquerque, to come pick it up. But she never did.
The gross amount of that April 29 check was $75,485.63 and the net was $44,230.48. It included only base salary and none of Alford’s additional salary for such things as media and community service obligations.
Alford’s April 29 check (gross pay), plus the deferred compensation UNM says it is saving ($100,000) and incentive payment savings ($165,000) total $340,485.63 that UNM says is savings, but Alford and UCLA say they weren’t seeking.
In prepared statements, UNM Board of Regents President Jack Fortner and University President Robert Frank expressed pleasure with the deal.
“On behalf of the UNM Board of Regents, we are pleased that President Frank and our Office of University Counsel evaluated the costs and benefits to UNM under Coach Alford’s previous contract and the April 1 contract,” Fortner said. “This resulted in an agreement that is fair to all parties and avoids costly, lengthy arbitration. Throughout this process, UNM has acted in good faith and never lost sight of its responsibility to the UNM community.”
Said Frank: “We worked diligently to find the best possible outcome under the circumstances. The result is within $50,000 of the net amount UNM would have received had Coach Alford paid the $1 million buyout. The outcome is favorable for UNM and allows us to move forward with the assurance that we have been good stewards of university resources. Most importantly, we have the great fortune of having Coach Neal to lead the UNM Men’s Basketball team to its next outstanding season.”
Bell told the Journal there was “comfort” in reaching an agreement before pushing the matter to arbitration — when the final outcome would have been out of the university’s hands. She said there is comfort in resolving what was a high-profile dispute for Lobo basketball, enabling the program to move on without further distraction.
Assuming the agreement in principle leads to a signed agreement between Alford and UNM, all that will be left to sort out is his accrued vacation pay.