Weaved among a litany of roots that shrunk the University of Tennessee athletic department's financial reserve to below $2 million following the 2011-12 fiscal year was, "Changes in leadership," according to a UT financial update released on Aug. 27.
With change comes residual effects.
"During the past four years, the athletics department has experienced a significant expense related to payments to former coaches in the sports of football, baseball and men's basketball as well as former directors of athletics," the release said.
Following a five-year department cleansing that began with the firing of baseball coach Rod Delmonico in June 2007 and included the ouster of former football coach Phillip Fulmer and men's basketball coach Bruce Pearl, among others, and ended with the resignation of former athletic director Mike Hamilton, Tennessee found itself knee-deep in contract buyouts.
Those buyouts, in turn, have been one of many factors suppressing the athletic department's ability to increase its cash reserve, the university claims.
Upon those terminations/resignations, agreed upon or otherwise, of any administrator or coach, UT has placed the full amount owed into an escrow account, according to athletic department spokesperson Jimmy Stanton. Thus, the amounts owed do not count against each fiscal
year moving forward.
For instance, after inking a separation agreement with Fulmer effective Nov. 30, 2008, the coach's full 48-month payout worth $6 million was placed in an escrow account, put on the books for the 2008-09 financial year, and ultimately paid out in $125,000 monthly installments.
The same applied for Pearl's buyout of $948,728 paid out over 15 months following his March 2011 termination. As well as former baseball coach Todd Raleigh, who replaced Delmonico in 2007, and received a $331,657.531 buyout over 13 months after being fired in May 2011.
"These situations have played a role in diminishing the cash reserve balance of the department of athletics," the UT financial update said.
There is, however, a buyout-free light at the end of the Tennessee tunnel.
The final checks from Tennessee to both Pearl and Raleigh were paid out in July.
Fulmer's $6 million burden will come off the books on Dec. 31 of this year.
After more than half a decade of mailing checks for services not rendered, the UT athletic department will enter 2013 with only two remaining buyouts.
After his resignation in June 2011, and ultimately replaced by Hart, Hamilton, the former athletic director, signed a separation agreement for $1,335,000 to be paid out over 36 months.
He's been receiving just over $37,000 per month since and will continue to do so until July 2014.
Additionally, former UT wide receiver coach Charlie Baggett is being paid $425,000 over 24 months based on an agreement that began on Dec. 31, 2011.
All told, if there are no other terminations and settlement agreements made before Hamilton and Baggett come off the books, Tennessee will have paid nearly $12 million in buyouts.
Brendan F. Quinn covers Tennessee men's basketball. Follow him at http://twitter.com/BFQuinn