Imagine being forced to leave your job . . . and being forced to accept $1.2 million on your way out the door.
That was the case at Rutgers University, where men’s basketball coach Mike Rice was fired last week amid reports of abusive behavior on the basketball court. After videos were released last week of Rice’s antics, the university fired him, and Rice’s boss, athletic director Tim Pernetti resigned.
Rice, who served a three-week suspension during the 2012-13 season because of his behavior, lost almost a quarter of his $700,000 salary during suspension. So why is he receiving a settlement of over $1 million after he got the ax? Because it turns out Rice did not violate any terms in his contract.
Fired without ‘Cause’
Rice was fired without “cause,” making him eligible to receive 75 percent of what he would have been paid over the final two years of his contract. Not including bonuses, Rice was to be paid $750,000 next year, making his payout more than $1.1 million.
Pernetti made out even better. He will receive his full salary — $453,000 — through June 2014. He will also receive any bonuses that were built into his contact based on student-athletes’ progress, financial goals and competitive success of any of the school’s revenue sports teams.
His $12,000 automobile stipend will also be paid until June 2014, and his health insurance benefits will go through October 2015.
Pernetti will also keep his Rutgers-issued iPad.
Just a Few Major Problems
I see a few major problems here.
The settlement costs will come out of Rutgers’ general athletic budget and will not be covered directly by private donations. That means the fine residents of New Jersey, a state that is still figuring out how to pay for the cleanup of Hurricane Sandy, are on the hook for this.
How can a coach come under fire for abusive behavior toward his players and still walk away with over a million dollars? Is that where tax money from the citizens of New Jersey should be going — to pay the salary of a man who treated the students at the state university like they were trash?
And how exactly does Pernetti get to walk away with so much cash? He was aware of Rice’s behavior but chose not to speak up until the rest of the country saw the videos.
He’s walking away with more than $1.2 million, not including bonuses. Bonuses? Why should he receive anything but ridicule and disrespect from those in the world of collegiate sports and the state of New Jersey?
I think both men should have to give money back to the university, to the student-athletes affected, to the taxpayers of New Jersey who funded Rice’s antics the past few years. The student-athletes who transferred because of Rice’s behavior had to sit out an entire season. They’re not going to get that time back, unless they go through a lengthy NCAA appeal.
Regardless, they’re not getting anything from Rutgers. Neither should Rice or Pernetti.
Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it seven years ago, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering college and professional sports, which are the fantasy worlds of finance. His work has been published by the Associated Press, New York Times, Washington Post, Chicago Tribune, Sports Illustrated and Sporting News, among others. His interest in sports has waned some, but his interest in never reaching for his wallet is as passionate as ever. Bill can be reached at firstname.lastname@example.org.