3/31/2010: FWIW, UO General Counsel and Oregon Special Assistant Attorney General Melinda Grier tries to explain things to the OUS Chancellor and Board President, prior to the board meeting tomorrow, which now has this item as #1 on the agenda. Her letter below is courtesy of the Oregonian. From my reading Grier is saying that there was a verbal agreement on a 3 year contract, but that no one will even claim that verbal agreement included any promise Bellotti would be paid anything if he stepped down voluntarily. As to how we got from story A to story B, well it certainly doesn’t make anyone look good, and it probably leaves Lariviere owing Grier one, which is real bad news for UO.
Grier now says:
“A spokesperson for UO misspoke when she told a reporter there had been conversations between Bellotti and Pres. Lariviere regarding Bellotti’s contract to assume the position of athletic director.”
She’s talking about this statement (from an earlier RG story):
“Richard (Lariviere)’s decision was based on those conversations he had with Mike Bellotti in July,” (UO Spokesperson Julie Brown) said. “He also took into consideration the current circumstances with the ESPN opportunity as well as the contributions over the 20-plus years Mike Bellotti had at the athletic department.”
That story also quotes Bellotti as saying
that he had a “handshake agreement” with Kilkenny and Lariviere concerning the payout.
“There was never a written contract that I signed,” he said. “There were some oral agreements.” There were also some “bullet point agreements” with Kilkenny, Bellotti said, but he would not elaborate on them.
Grier now says that handshake never happened but that Bellotti will get his money anyway. She also says:
Kilkenny had negotiated salary, and there seemed general agreement that Bellotti’s first-year salary April 2009 – March 2010 would be $975,000; thereafter, it would be $675,000 per year.
Which is weird because the official UO data here lists his fall 2009 salary as $350,000, plus another $325,000 in endorsement payments – not quite $975,000.
Grier is probably right in saying that the payoff money isn’t coming from taxpayer funds though. Apparently it’s coming from Knight’s Athletic Legacy fund. Of course, Frohnmayer told the faculty and the legislature that fund would be used as security for the $200 million in Matt Court bonds. See more from the excellent reporting of former UO undergrad Ryan Knutson, here.
March 31, 2010
Chancellor, Oregon University System
111 Susan Campbell Hall
Eugene, OR 97403
Paul Kelly, Jr.
President, Oregon State Board of Higher Education
c/o Garvey Schubert Barer
121 SW Morrison Street, 11th Floor
Portland, OR 97212
Dear President Kelly and Chancellor Pernsteiner:
In recent days, there have been a number of reports in the media concerning the separation agreement reached between the University of Oregon and UO Athletics Director Mike Bellotti. I have prepared this memorandum and chronology of events in an effort to clarify the series of actions that led to the creation of this agreement.
In November 2008, Mike Bellotti expressed interest in exploring a potential transition from his position as Head Football Coach to the role of Athletic Director with Chip Kelly, then Offensive Coordinator, assuming the head coach position. President Dave Frohnmayer authorized then Athletic Director, Pat Kilkenny, to explore the possibility with Bellotti. Kilkenny had agreed to serve as athletic director through June 2009 but did not desire to extend his contract beyond that time.
Kilkenny and Bellotti explored the potential transition with Kelly who was interested. President Frohnmayer and Athletic Director Kilkenny announced the succession plan December 2, 2008. The date of the transition was agreed to be subject to Bellotti’s decision when he wished to step down as coach. Kilkenny and Kelly negotiated the terms of Kelly’s subsequent contract as head football coach, which they memorialized in a term sheet agreement signed in December 2008.
In March 2009, Bellotti indicated that he was considering stepping down as head football coach prior to the beginning of spring term. Bellotti decided to initiate the transition at that time, rather than waiting until 2010 or later, in order to make an announcement prior to the end of winter term so that the football players would learn of his decision before they left campus for spring break. Bellotti believed it was critical to inform the team of his decision before spring practice began. During the week of March 8, 2009, Bellotti talked with President Frohnmayer as he was making his decision, envisioning a meeting with the team Friday, March 13.
March 12, Bellotti informed Frohnmayer that he had decided to go forward with the transition.
Spring term was intended to be a transition period when Bellotti and Kilkenny could overlap and Bellotti would have a chance to orient himself to the athletic director position. Frohnmayer authorized Kilkenny to negotiate a salary for Bellotti. The first-year salary negotiated was intended to transition Bellotti from his compensation as head football coach, slightly over $1.9 million in 2008-2009, to his athletic director’s salary. Bellotti and Kilkenny agreed Bellotti would be paid $975,000 in salary during the first year (April 2009-March 2010). They discussed additional compensation during that first year only that would be equal to the difference between his salary of $975,000 and his previous year’s compensation.
When President Lariviere took office in July 2009, he assumed that contracts with Bellotti were in place and had no conversations with Bellotti about his contract. A spokesperson for UO misspoke when she told a reporter there had been conversations between Bellotti and Pres. Lariviere regarding Bellotti’s contract to assume the position of athletic director. During early winter, Bellotti told President Lariviere that ESPN had approached him to consider a position as a color commentator. Bellotti had provided color commentary on Oregon Sports Network UO football game broadcasts during the fall and had received acclaim for the excellent quality of his work. At this time, President Lariviere determined that it was in the university’s best interest to expedite this transition and find new leadership for the athletic department. He subsequently began to negotiate with Bellotti regarding the terms of their mutual agreement for Bellotti’s separation of service.
When I learned of their intent, I began in earnest to search for a term sheet or other memorialization of the terms of Bellotti’s agreement. I had previously made requests but had not received anything, although there seemed to be a general assumption that such a term sheet existed. The terms and conditions of all UO unclassified employees, including coaches, are covered by extensive Board Administrative Rules, UO Administrative Rules and policies. Most employees, including most coaches, receive an annual notice of appointment, which they are asked to sign and return. A few employees, including a few coaches whose employment agreements contain terms in addition to the standard terms and conditions, are given more extensive contracts in lieu of standard notices of appointment. Until those more extensive contracts are fully negotiated and executed, the terms of employment are those in Board and UO Administrative Rules and policies and provisions contained in the agreed to term sheets.
It became apparent that no one could produce a term sheet. Kilkenny had negotiated salary, and there seemed general agreement that Bellotti’s first-year salary April 2009 – March 2010 would be $975,000; thereafter, it would be $675,000 per year. There was not agreement regarding other terms or conditions. It was Bellotti’s belief that, during the first year of his contract (April 2009 – March 2010), he would receive the additional compensation equal to the difference between his previous and current year’s compensation. This belief seemed reasonable in the general context of the discussions that occurred in the spring of 2009.
There was not general agreement around other terms. Bellotti believed he was promised a five-year contract. Kilkenny was not authorized to negotiate the length of the agreement. Frohnmayer had no conversations with Bellotti regarding the length of his contract. I recalled general discussions, not necessarily with Bellotti, of a three-year term. Employment contracts longer than three-year’s duration require approval of Chancellor Pernsteiner. Our office was not asked, as would be standard, to prepare a request for Chancellor Pernsteiner’s approval. As a result, President Lariviere assumed a contract term of three years, of which, Bellotti had already served one year. The $2.3 million represents the two year’s salary remaining on a three year contract at $675,000 per year plus the additional first-year compensation that was as yet unpaid. A separation agreement containing those terms was signed by both parties and publicly disclosed upon its execution.
Although the sum paid to Bellotti is large, it represents an amount that is consistent with President Lariviere’s best assessment of what would be due Bellotti. This is especially true for a long-time employee such as Bellotti who has served with such distinction and who is held in high regard.
Some have raised concerns that taxpayer funds will be used to pay this settlement. That is not the case, nor will Athletic Department operating funds be used. The UO will rely solely on donor funds for the payments to Bellotti.
I also want to assure you that President Lariviere has made clear his expectation, which I strongly support, to make certain that any conditions beyond those contained in a standard notice of appointment will be memorialized in writing.
Melinda W. Grier