Thursday, April 01, 2010

Was Mike Bellotti Fired ? (or pushed out the door)

I have been very supportive of Pat Kilkenny, Mike Bellotti and the University of Oregon Athletic Department. But they have some explaining to do ! Below is a complete copy of a letter written yesterday to the Oregon State Board of Higher Education by Melinda W. Grier, the attorney for the President of the University of Oregon, outlining the circumstances of the University of Oregon paying Mike Bellotti 2.3 million dollars as part of a "golden parachute" when he decided to "resign" as Athletic Director to take a job as an analyst for ESPN. The letter raises more questions than it answers.

1. Was Mike Bellotti fired at AD or at least pushed out the door ?

2. Why no written contract..... as an attorney I find this inexcusable ?

3. The 3.2 million dollar "golden parachute" as originally explained was an agreed payoff whenever Bellotti left the AD regardless of how long he was AD and was negotiated to get him to step down as head football coach. This is never mentioned in this letter and apparently there was no clause as there was no written contract. Did Pat Kilkenny negotiate such a provision in an oral agreement ?

4. If an employee voluntarily terminates their employment before there employment ends they normally don't get the rest of the contract unless they are fired or there is a provision in a contract guaranteeing it.

5. What donor(s) are paying the 2.3 million dollars and do they know it and have they agreed to it. I am a very small donor to the Duck Athletic Fund.
Will my donation and other similar donations be the ones used or will it come from a donor(s) who agreed to be responsible for this specific expense?

6. Will this deprive the Athletic Department of of donations for other projects or uses ?

There may be some reasonable answers to all of the above and if there are we need to have them ASAP. The Athletic Department and the University of Oregon have a major PR disaster on there hands and it could get worse. The Oregon Attorney General is investigating and so is the State Board of Higher Education. The U of O President needs to cut his Asian trip short and get back here to take charge of the situation and we need some answers. A press conference by Bellotti and Kilkenny would be a good start.

I don't have a problem with Mike Bellotti receiving the 2.3 million dollars considering his service to the University of Oregon but I do have a lot of questions as to the process.

George Pernsteiner
Chancellor, Oregon University System
111 Susan Campbell Hall
Eugene, OR 97403

Paul Kelly, Jr.
President, Oregon State Board of Higher Education
c/o Garvey Schubert Barer
121 SW Morrison Street, 11th Floor
Portland, OR 97212

Dear President Kelly and Chancellor Pernsteiner:

In recent days, there have been a number of reports in the media concerning the separation agreement reached between the University of Oregon and UO Athletics Director Mike Bellotti. I have prepared this memorandum and chronology of events in an effort to clarify the series of actions that led to the creation of this agreement.

In November 2008, Mike Bellotti expressed interest in exploring a potential transition from his position as Head Football Coach to the role of Athletic Director with Chip Kelly, then Offensive Coordinator, assuming the head coach position. President Dave Frohnmayer authorized then Athletic Director, Pat Kilkenny, to explore the possibility with Bellotti. Kilkenny had agreed to serve as athletic director through June 2009 but did not desire to extend his contract beyond that time.

Kilkenny and Bellotti explored the potential transition with Kelly who was interested. President Frohnmayer and Athletic Director Kilkenny announced the succession plan December 2, 2008. The date of the transition was agreed to be subject to Bellotti’s decision when he wished to step down as coach. Kilkenny and Kelly negotiated the terms of Kelly’s subsequent contract as head football coach, which they memorialized in a term sheet agreement signed in December 2008.

In March 2009, Bellotti indicated that he was considering stepping down as head football coach prior to the beginning of spring term. Bellotti decided to initiate the transition at that time, rather than waiting until 2010 or later, in order to make an announcement prior to the end of winter term so that the football players would learn of his decision before they left campus for spring break. Bellotti believed it was critical to inform the team of his decision before spring practice began. During the week of March 8, 2009, Bellotti talked with President Frohnmayer as he was making his decision, envisioning a meeting with the team Friday, March 13.

March 12, Bellotti informed Frohnmayer that he had decided to go forward with the transition.

Spring term was intended to be a transition period when Bellotti and Kilkenny could overlap and Bellotti would have a chance to orient himself to the athletic director position. Frohnmayer authorized Kilkenny to negotiate a salary for Bellotti. The first-year salary negotiated was intended to transition Bellotti from his compensation as head football coach, slightly over $1.9 million in 2008-2009, to his athletic director’s salary. Bellotti and Kilkenny agreed Bellotti would be paid $975,000 in salary during the first year (April 2009-March 2010). They discussed additional compensation during that first year only that would be equal to the difference between his salary of $975,000 and his previous year’s compensation.

When President Lariviere took office in July 2009, he assumed that contracts with Bellotti were in place and had no conversations with Bellotti about his contract. A spokesperson for UO misspoke when she told a reporter there had been conversations between Bellotti and Pres. Lariviere regarding Bellotti’s contract to assume the position of athletic director. During early winter, Bellotti told President Lariviere that ESPN had approached him to consider a position as a color commentator. Bellotti had provided color commentary on Oregon Sports Network UO football game broadcasts during the fall and had received acclaim for the excellent quality of his work. At this time, President Lariviere determined that it was in the university’s best interest to expedite this transition and find new leadership for the athletic department. He subsequently began to negotiate with Bellotti regarding the terms of their mutual agreement for Bellotti’s separation of service.

When I learned of their intent, I began in earnest to search for a term sheet or other memorialization of the terms of Bellotti’s agreement. I had previously made requests but had not received anything, although there seemed to be a general assumption that such a term sheet existed. The terms and conditions of all UO unclassified employees, including coaches, are covered by extensive Board Administrative Rules, UO Administrative Rules and policies. Most employees, including most coaches, receive an annual notice of appointment, which they are asked to sign and return. A few employees, including a few coaches whose employment agreements contain terms in addition to the standard terms and conditions, are given more extensive contracts in lieu of standard notices of appointment. Until those more extensive contracts are fully negotiated and executed, the terms of employment are those in Board and UO Administrative Rules and policies and provisions contained in the agreed to term sheets.

It became apparent that no one could produce a term sheet. Kilkenny had negotiated salary, and there seemed general agreement that Bellotti’s first-year salary April 2009 – March 2010 would be $975,000; thereafter, it would be $675,000 per year. There was not agreement regarding other terms or conditions. It was Bellotti’s belief that, during the first year of his contract (April 2009 – March 2010), he would receive the additional compensation equal to the difference between his previous and current year’s compensation. This belief seemed reasonable in the general context of the discussions that occurred in the spring of 2009.

There was not general agreement around other terms. Bellotti believed he was promised a five-year contract. Kilkenny was not authorized to negotiate the length of the agreement. Frohnmayer had no conversations with Bellotti regarding the length of his contract. I recalled general discussions, not necessarily with Bellotti, of a three-year term. Employment contracts longer than three-year’s duration require approval of Chancellor Pernsteiner. Our office was not asked, as would be standard, to prepare a request for Chancellor Pernsteiner’s approval. As a result, President Lariviere assumed a contract term of three years, of which, Bellotti had already served one year. The $2.3 million represents the two year’s salary remaining on a three year contract at $675,000 per year plus the additional first-year compensation that was as yet unpaid. A separation agreement containing those terms was signed by both parties and publicly disclosed upon its execution.

Although the sum paid to Bellotti is large, it represents an amount that is consistent with President Lariviere’s best assessment of what would be due Bellotti. This is especially true for a long-time employee such as Bellotti who has served with such distinction and who is held in high regard.

Some have raised concerns that taxpayer funds will be used to pay this settlement. That is not the case, nor will Athletic Department operating funds be used. The UO will rely solely on donor funds for the payments to Bellotti.
I also want to assure you that President Lariviere has made clear his expectation, which I strongly support, to make certain that any conditions beyond those contained in a standard notice of appointment will be memorialized in writing.

Melinda W. Grier
General Counsel

I ask you is this any way to run a railroad !