Monday, May 9, 2011

Kansas State University reaches settlement with former football coach Ron Prince

It made for an interesting fact-pattern: 1) the athletic director signs the coach to a lucrative contract (or "memorandum of understanding") that contains a $3.2 million buyout; 2) the athletic director quits; and 3) the school fires the coach and says it won't pay him the buyout because, in its view, the athletic director did not have the authority to sign the coach (even though the relevant by-laws suggested he did).

Now the dispute has settled in a way that clearly favors the coach.  Here's more:

* * *
Neil Cornrich, Prince’s agent, said in a statement that Prince was “appreciative of KSU’s willingness to structure the settlement in such a favorable manner.”

Cornrich contends the settlement is a “significant financial advantage” for Prince compared to the $3.2 million buyout. Those payments were not scheduled to start for almost five years and would not be fully paid until Dec. 31, 2020.

“Discounted to present value, the $1.65 million settlement figure essentially represents an agreement to pay Coach Prince almost the entire $3.2 million termination payment,” Cornrich said. “Coach Prince will receive these funds upfront and almost nine years earlier than they were originally due.”

* * *
“I think it’s a favorable outcome for Prince,” said Michael McCann, a Vermont law professor who also works as a legal analyst for Sports Illustrated. “For the school, there is a benefit to having closure to litigation. I don’t know what the value of that is, because it’s hard to quantify, but this lawsuit has attracted a lot of publicity that the school doesn’t want.

“It will provide closure, whereas if it goes through litigation, regardless of who wins and loses, you still have the possibility of appeals and public statements. You can certainly see why the school wants to settle it and have some closure even if it means paying Prince a substantial amount of money.”

McCann said the arguments made during a hearing for summary judgment last fall in Riley County District Court appeared to give Prince the advantage.

“It seemed that the athletic director either had authority (to negotiate a coaching contract) or one could presume he had authority, and in either case Prince would likely win,” McCann said.

“I think Prince had the stronger legal argument heading into the case, but there is still a benefit to Prince for settling. It ends all risk of losing.”
* * *
To read the rest, click here.