Clemson football could save big by winning big

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Clemson coach Dabo Swinney and his staff are on pace for another windfall, and the school"s athletic administration has planned ahead.(Photo: Stew Milne, USA TODAY Sports)

As problems in college athletics go, the one that Clemsons athletic department faced after appearing in January"s College Football Playoff final wasnt a bad one.

It had to pay about $2.3 million in bonuses to its coaches and staff, including $1.1 million to head coach Dabo Swinney. And that was on top of travel, game tickets and other costs involved with playing a CFP semifinal in Miami and the championship game near Phoenix.

Clemson has ended up enjoying increases in revenue from donations, season-ticket sales and merchandise, but that money wasnt available last winter when all those bills came due. The cash flow issue was real, said athletics department spokesman Joe Galbraith.

When things settled down, Clemson officials recognized that the football team led by returning Heisman Trophy finalist quarterback Deshaun Watson had the potential to create the same kinds of issues during the 2016-17 season. So, they decided to try a solution that is common in golf and tennis and gaining increased consideration in college sports.

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They decided to buy bonus insurance.

Working with Marietta, Ga.-based Risk Point Consulting, Clemson has spent $272,000 to obtain coverage that assistant athletics director Eric George said will cap the school"s exposure on football bonuses for this season at $2 million. George said the arrangement would save the school more than $500,000 if the Tigers again lose in the CFP title game and more than $1.2 million if they win the national championship.

According to Risk Point president Michael Wright, Clemson is among five schools that chose to purchase coverage through his firm after about 15 had what he termed serious conversations about it.

Colleges are the same as any company looking to address this financial uncertainty, added Wright, who said his firm works more frequently with golf and tennis equipment and apparel companies whose endorsement contractswith athletes often involve one-time bonuses or automatic pay increases for victories in certain events or season-long achievements.

Swinneys contract used to include both one-time bonuses and guaranteed pay increases if the Tigers met certain competitive benchmarks, and a handful of coaches, including Kansas David Beaty, currently have agreements with both kinds of incentives.

As salaries have increased, bonuses have increased as well, Wright said. It seems like a lot of schools do not budget for bonuses they just address them as they can, whether its out of an equipment contract or the expectation of increased money off their success.

Swinney was able to gain a maximum of $775,000 in bonuses in 2013. Since then, in conjunction with two major base compensation increases, that figure has risen to $1.2 million and now stands at $1.725 million an amount that remains attainable this season.

The Tigers began the season ranked No. 2 in the Amway Coaches Poll. They are currently No. 3 with a 7-0 record that includes a win against now-No. 5 Louisville, one of their rivals in the Atlantic Coast Conferences Atlantic Division. Clemsonfaces No. 14 Florida State on Saturday in Tallahassee.

And the down side for Clemson in the particular insurance setup it purchased, George said,is that if the team doesnt win the ACC Championship game, doesnt make a CFP non-semifinal but does play in a bowl game which it already has qualified to do the coverage wont take effect. In that case, Clemson will have paid the premium and it will have to pay the bonuses that its coaches and staff will be owed.

There are manypermutations somewhere in between. For example, if the Tigers win the ACC title, go to a CFP semifinal and lose that game, George said the insurance will cover a large enough portion of the bonuses that Clemson will end up losing a minimal amount of money compared to where it would have stood without buying the insurance.

This is something you probably would not do every year, George said, but given our situation this year, it was beneficial to look at. It takes the ambiguity out of the budget process.

Source: http://www.usatoday.com/story/sports/ncaaf/2016/10/26/college-football-coaches-salary-database-bonus-insurance-clemson-tigers-dabo-swinney/92760684/