Clarifying the complexities of a Tom Crean buyout

Originally published Dec. 18, 2014.

The details of IU coach Tom Crean's contract have become a popular water-cooler topic among Indiana fans this fall because of both off-the-court issues and a disappointing 2013-14 season.

One of the most talked-about portions of that contract is Crean's hefty buyout, which stands at $12 million until July 1, 2015. After July 1, it falls to $7.5 million.

But were Indiana to terminate that contract without cause after the season but before July 1, Crean's buyout would actually fall between $1 million and $1.4 million less than what's listed in his contract. The reason is a clause attached to the buyout procedure.

To be clear: This isn't meant to advocate for either retaining or removing Crean at IU. The details of his contract – and particularly his buyout – are common topics of public conversation right now. This is simply an attempt to clarify those details.

Section 6.02.F. of the contract deals with "the university's obligation upon termination without cause." It offers flat buyout totals for each year of Crean's contract, running all the way to 2020, when his current deal expires.

It also includes a caveat:

... the University's sole obligation to the Employee shall be to pay the Employee an amount representing the lesser of: (1) "Termination Payment" (as defined below) or (2) the aggregate amount of unpaid outside income listed in Section 4.05.A. for the period from the date of termination to the Normal Expiration Date.

Here, we reach the crucial language.

It's important to note at this point that a contract year, according to its terms, runs from July 1-June 30. After June 30, 2015, the "aggregate amount of outside income" left in the contract comes to $10.6 million.

After June 30, 2015, the buyout falls to $7.5 million, rendering it the applicable number, not the contract's remaining outside income. But were Indiana to wish to make a change in the spring, then Crean would, in theory, be owed that $10.6 million, plus whatever months' salary was owed through the remainder of this year.

I ran this by folks familiar with contracts, just to make sure I understood the details. The final number is a moving target based on timing, but the actual buyout would, until July 1, more likely fall between $10.6 million and approximately $11.22 million.

That's still a large number, though $1 million is hardly splitting hairs.

And again, understand: This is not a call for change, but rather a clarification of a topic of conversation among IU fans and readers.

Crean's buyout has been a debated subject since a rash of off-the-court issues brought it into the national consciousness in the preseason. That, coupled with last season's lack of postseason play, has left IU fans feeling frustration that Star columnist Gregg Doyel documented explicitly in November.

Despite that turmoil, Indiana has started the season 8-2, with wins over Pitt and SMU, and the opportunity to defeat a ranked Butler team on Saturday in Indianapolis, in the fourth-annual Crossroads Classic.

A win over the Bulldogs would likely ease fan furor, which has already waned somewhat, and it would help quell talk of potential replacements.

Follow Star reporter Zach Osterman on Twitter: @ZachOsterman.