‘A really fair deal for both sides’: Here are the details on new Utah basketball coach Craig Smith’s six-year contract agreement
After making the first major hire of his three-year tenure, Utah athletic director Mark Harlan tells the Deseret News that the 48-year-old Smith wanted a six-year deal and got it
When University of Utah athletic director Mark Harlan and Craig Smith informally agreed last Friday afternoon that the 48-year-old Smith would replace Larry Krystkowiak, both men agreed on at least one detail when they started talking about a contract.
“Six years was a mutual feeling,” Harlan told the Deseret News Monday afternoon as the U. released the contract after a receiving a public records request from the news outlet on Saturday, minutes after the former Utah State University coach was announced as the school’s 16th men’s basketball coach.
“I feel like that is the proper time to allow Craig’s culture to develop and move forward, so that was a mutual decision,” Harlan said. “Craig liked that (year total), too.”
Bottom line is that the Utes are getting Smith for considerably less than they were paying Krystkowiak, whose salary was around $3.9 million (not counting pandemic-related pay cuts) and who will start receiving payments for a buyout of around $6.8 million soon, if he hasn’t already, after being fired on March 16.
And Smith is getting a huge raise, after signing a contract extension with USU just last month that called for a base salary of $775,000 a year with $25,000 annual increases.
“Six years was a mutual feeling. I feel like that is the proper time to allow Craig’s culture to develop and move forward, so that was a mutual decision. Craig liked that (year total), too.” — Utah athletic director Mark Harlan.
Here are the other important numbers in Smith’s deal:
• A base salary of $12.6 million is guaranteed over the life of the contract, which terminates after the 2026-27 season.
• Smith’s starting annual salary, not counting perks and bonuses, is $1.85 million per year. It escalates $100,000 per year until March 31, 2027, or the day after the team’s last game of the 2026-27 season.
• On or before June 30, 2021, the University of Utah will pay $400,000 of Smith’s buyout to USU. Who will pay the remainder of his nearly $1.1 million buyout, or how, is not made clear in the contract.
• If Smith is terminated without cause (as Krystkowiak was), he is entitled to 100% of his base salary, radio and television money, appearance fees, public speaking engagements and fundraising salary, deferred compensation, outfitter payments and incentive-based compensation not yet paid. Hence, $12.6 million is guaranteed, and his exact buyout would depend on how many years he had left on his deal.
• If Smith voluntarily terminates his Utah contract — if he’s hired away by another team, basically — he (or his new employer) has to pay $11 million if it takes place in the first year, $8.5 million the second year, $6 million the third year, $2.5 million the fourth year and $1 million the fifth year.
There is no buyout during the sixth year, but coaching contracts rarely reach their final year because they are either extended or terminated a year or two before they reach that point.
“We came out with a really fair deal for both sides,” Harlan said. “That (negotiation) process began sometime Friday afternoon. … And they (attorneys for both sides) came to terms later that night, and we were able to announce it on Saturday.”
An interesting clause in the contract: “The … payments owed by Coach Smith or his subsequent employer shall be reduced by 50% if Mark Harlan is no longer the University’s Director of Athletics at the time of termination.”
There’s also a “Force Majeure” clause that stipulates that if 25% or more of the Utes’ regular-season games are canceled “as the result of an act of God, act of nature, epidemic/pandemic, war, act of a governing regulatory body,” the U. will have the right to reduce Smith’s compensation in that year by 10%.
Smith’s total compensation the first year comes from the following sources: base salary ($300,000), radio and TV revenue ($550,000), appearance fees, public speaking engagements and fundraising ($550,000), deferred compensation/retirement ($50,000), annual retention bonus ($150,000) and incentive-based compensation (potential up to $675,000 per season).
The list of those incentive bonuses is lengthy. Some are based on men’s basketball gate receipts, Pac-12 regular season finishes, NCAA tournament berths and wins, conference and national coach of the year honors (Naismith or NABC), national rankings (Top 25) and student-athlete academic progress standards.
Of course, coaching contracts in 2021 come with plenty of perks, and Smith’s is no different. It is roughly the same as what Krystkowiak was getting, as outlined in this article in the Deseret News last month.
Smith will receive university health insurance benefits, the sole use of a university-provided automobile, with insurance, or a $600 monthly car allowance.
Smith’s spouse and dependent children can accompany him on chartered flights to games and tournaments at the university’s expense. His college-eligible children are entitled to a 50% tuition reduction.
The Smith family receives a country club membership — Krystkowiak’s was at Hidden Valley after initially being at the Salt Lake Country Club — or a health/social club membership.
The U. will provide Smith up to 12 basketball season tickets and up to six football season tickets in Rice-Eccles Stadium.
To provide some context to Smith’s deal, when Utah hired Krystkowiak on April 3, 2011, the then-New Jersey Nets assistant earned $950,000 per year. The contract was for five years, but extended twice before Harlan made the decision 13 days ago to part ways with the 10-year coach.