What the Muschamp deal means

I can haz bailout?

Booyah!

How do we know it’s an obligation without a humongous default penalty?

Ah yes, the McCombs Finance way…back that asset!

Thanks, HJ.

While I understand the motivation for and wisdom of the move, I don’t see how it passes muster from an EEOC angle.

Racists

Actually, the premium is $900,000 minus what his salary would have been as defensive coordinator plus any transaction costs, fees, etc.

2 concerns:

1- I’m not ready for Mack to go anywhere or stop being the head coach at UT.

2- Muschamp hasn’t been here long enough for us to know what his weaknesses are and how that will effect our program.

Parlin,

No EEOC concerns here. Muschamp must coach 3 games a year (and alternate when Texas is the “away” team in Dallas) in black face.

Once you are stunned and pissed, you don’t back off.

Pussy.

remember, the actual price of the option here is the delta between his old salary and his current one. Its even cheaper than 900k, its the 450-500k we’re paying on top of that.

this is why this move is so smart.

Hippie Killer

1-Mack might be ready, or have a clear idea of when he’ll be ready.

2-Muschamp has been in enough high-profile jobs that people should have a pretty good idea of his qualities and his weaknesses. If the rumors are true that Tennessee was about to throw the bank at him, then that’s at least 1 major program that was satisfied with him right now, much less 2-3 years from now.

He wouldn’t be getting the gold seal of approval from Mack, DeLoss, the UT President AND the BOR without a pretty solid consensus. I think it’s safe to say he’s been vetted more than, say, Sarah Palin was.

You don’t think Muschamp gets some money if they backout on making him the head coach?

I am pumped reading about this guy. To succeed Mack we can’t have a Mack clone.

When I was in college, they always ignored transaction costs, fees and taxes.

Well, you do want your defense to be professionally managed.

You don’t give Muschamp and his advisors near enough credit.

Remember to obtain and read a prospectus. Past results are not a guarantee of future success.

I’m just fired that we’ll have continuity in our D for the next few years, a thing Bull Reese made a bad thing BTW, but Muschamp seemingly will not…for instance, our D looked stouter last weekend than anytime this year (regardless of the opponent), I’d hate to be aggy this T-day…

anonymous – the money Muschamp gets “if they back out on making him head coach” is essentially the bump to $900k

I wish I could purchase put options for Duane Akina, Greg Davis, and Doperbo.

Now you are making some sense HenryJames. Nice article. You’ve made some progress since “I’m stunned. I’m pissed.”

One other point that no one has mentioned yet is that with the HUGE TT/OU game this weekend, the timing of the press conference was brilliant. It gets pollsters thinking about UT when most would have been engrossed on this weekend’s game. The polls are extremely political and “what have you done for me lately” in nature. Without a game this weekend, Mack may have engineered more coverage than a win over a mediocre team. KUDOS!

RFourie,

So you are suggesting that Muschamp, the hottest coaching commodity out there, gave up on pursuing any of his other numerous opportunities (for head coaching jobs that will be available immediately after this year, and which pay far more than 900K) in return for nothing more than a raise to 900K plus a promise that he will become HC here which you suggest is completely unenforceable?

I doubt it. I would guess there will be something in the contract that guarantees him some additional sum in the event that he is “preemptively fired.”

Anyways, I’m not knocking the move. I’m thrilled to keep him on board. I’m just speculating that the cost of this “option” will be more than the raise to 900k if it is not exercised. Not that money is an issue around here in any event.

will is our own obama in texas, the future looks bright

“I think it’s safe to say (Muschamp’s) been vetted more than, say, Sarah Palin was.”

True, but she was just in line to run the country, not the UT football program. Let’s be mindful of our priorities here.

‘Nice article. You’ve made some progress since "I’m stunned. I’m pissed."’

Since we’re all family here I want to explain this reference to everyone- a long time ago on a board far far away this was the title by an esteemed colleague proclaiming Mack’s hire- the irony of the source and the initial reaction in hindsight have become legend. Hell it’s almost reached meme status among the longhorn cognoscenti. HenryJames’ use of it was the definition of wit.

I can’t believe I just defended HenryJames. I need a shower.

I owe Will an apology. That was harsh. Although he is unqualified, on further consideration, he’s not THAT unqualified!

I meant to say:

…our own Carl Marx, Che Guevara, or Hugo Chavez. AND- he prefers to be referred to as “Comrade.”

“…a long time ago on a board far far away this was the title by an esteemed colleague proclaiming Mack’s hire- the irony of the source and the initial reaction in hindsight have become legend.”

Well, now I’m curious: Who was that source and what is the irony?

Thanks for the history Doperbo. That WAS a nice twist of wit. However, I was referring to the article as a whole.

Despite all of that, the option analogy in this article is spot-on.

On second thought, should have phrased my question above more carefully: Who was that source and why was it ironic that he/she said it?

Wouldn’t the actual price of the option be the delta between the 900k and the salary we’d be paying the guy who we would have to hire to replace Muschamp after this season?

Buy 100 Puts January Mike Sherman

A little google brings up the legendary texlarry from the original austin360 board (it was ironic because he had heard from connections that Gary Barnett was going to be the next coach of UT, and was unhappy that MB got the job instead).
The other classic quote from the board: “he committed to the Oklahoma freakshow, but i’m the idoit?” This one’s harder to explain, but a sooner fan apparently posted it in all seriousness. No one really understands what it’s supposed to mean.

HJ I think that there is a better way to look at this besides a call option, which by the way is a very good explanation. Had we not taken this route then we would been hiring a head coach. That head coach would have had a buy out clause. More likely than not the buy out clause would have been over $2 million. Over the next 5 years we are going to pay a little over $2 million “extra” to WM. So, basically what we have done is pre pay an expense that we were going to pay anyway. If WM does not become the next HC, then we are spending $425K a year for the next few years not to have the defense disrupted. So, the cost is either a pre paid expense (most likely) or the cost of business interruption insurance.

I read on the AAS that this was a family move for Muschamp. Plus, I see the extra 400k paid to coach boom as the cost for keeping this badass DC for a couple of years + no distractions of HC offers.

If it translates in to shitstomping aTm, then its money well spent.

“If it translates in to shitstomping aTm, then its money well spent.”

Not quite. If it translates to an MNC in 2009 and at least two Big XII titles between 2009-2013, then it was money well spent.

Hook ’em!

To put the extra $450-$500k into perspective – this is basically the equivalent of the ticket proceeds from less than half of the North End Zone expansion for 1 game.

Since I’ve sat in those seats every home game this year, all I have to say is You’re Welcome.

Otherwise good analogy, but you left out the volatility smile and the theta. That said, I agree – it does seem like an appropriate hedge.