Rutgers gave Schiano secret escape clause

Saed Hindash/The Star-LedgerGreg Schiano, Rutgers head football coach, was given an unpublicized escape clause in his contract allowing him to walk away from his contract if the university did not complete a major expansion of its football stadium by next year.

Rutgers University made a secret deal allowing the head football coach to walk away from his contract without penalty if it did not complete a major expansion of its football stadium by 2009.

Under his current agreement, Greg Schiano is required to pay $500,000 for breaking his 10-year contract if he leaves following the 2009 football season. However, an addendum to that contract, never divulged by Rutgers, releases him from those same damages if the construction is not completed on time.

The stadium side deal, outlined only Tuesday night by university president Richard L. McCormick, was the latest revelation about a series of undisclosed sweeteners the state university offered Schiano in an effort to retain the sought-after coach.

"We wanted to maintain the momentum of the program," McCormick said. "We wanted to keep Greg Schiano as our coach."

On Tuesday, The Star-Ledger reported Rutgers had guaranteed Schiano $250,000 in compensation on top of the $2 million contract he signed in February 2007. The extra money was funneled through a university vendor and never appeared on the school's payroll.

McCormick apologized Tuesday night for the university's continuing "lack of transparency" involving Schiano's contract and said Rutgers should have made public all the terms and changes in that agreement.

"I'm not sure why we didn't, but I regret it," McCormick said.

Neither Schiano nor university athletic director Robert Mulcahy -- who negotiated the contract -- responded to requests for comment.

State Sen. Loretta Weinberg (D-Bergen) asked state inspector general Mary Jane Cooper and state comptroller Matthew Boxer Tuesday to open investigations of the matter.

"The taxpayers deserve to know the total price tag that comes with the hiring of a prominent and sought-after football coach," said Weinberg, referring to the side letters as a "covert operation."

Schiano is among the highest-paid college coaches in the nation. His base salary and guaranteed compensation this year went to $1.6 million, not including the $250,000 payments made through Nelligan Sports Marketing or the bonuses and other incentives that last year alone totaled $205,000.

Included in those bonuses was $50,000 for the university's invitation to a bowl game, $100,000 for reaching a record in ticket sales and $25,000 for the team's academic progress rating. The university, which sold Schiano a piece of property, also gave him an $800,000 interest-free loan to buy a home. That loan is being forgiven at a rate of $100,000 a year so long as he remains employed by Rutgers.

Much of the criticism being directed at Rutgers has not been about the amount of money Schiano was getting but the fact that it was being kept from the public.

According to records obtained by the newspaper, Rutgers arranged for Nelligan, the university's exclusive marketing agent, to pay the coach $250,000 that came out of sponsorship revenues owed the university. The payments from Nelligan went into a limited liability corporation set up by Schiano days after his February 2007 contract extension was announced.

In a statement Tuesday, company chief executive T.J. Nelligan said the payments made through his business are a common practice at many top football schools, where coaches are compensated for personal appearances and endorsements.

"Not one dime has come from the state taxpayers. In fact, due to the increased revenue, Nelligan Sports Marketing has helped generate over $22 million in total sponsorship revenue since 2000-2001. This has significantly helped to pay expenses for the athletic department and thus offset the costs that would have had to be paid by taxpayers," Nelligan said.

McCormick said Tuesday Rutgers had included a stadium clause as a further incentive to retain Schiano, who has been courted by at least two top football programs, Miami and Michigan. It was the first time McCormick explained the university's rush to start the expansion project this year.

The $102 million stadium renovation, which will add 14,000 new seats, is currently over budget.

University officials say the first phase of the project, adding approximately 1,000 "premium" seats, will be ready for the first game of the season, against Fresno State on Sept. 1. But officials said earlier this month that bids for the addition of 13,000 seats in Phase Two came in $18 million higher than anticipated. They say they are looking to scale back the design to keep within their approved budget but maintain the project will be competed on schedule.

"It is a commitment to the coach that the two phases of the expansion of the stadium will be completed by the beginning of the 2009 football season; more specifically, that one of them will be completed in 2008 and the other one in 2009," McCormick said.

He added: "We wanted to seize the moment, take advantage of the opportunity to expand the stadium. It was all part of a common set of goals that we had."

He could not say why that part of Schiano's contract was withheld, even after The Star-Ledger began examining the contract and filed numerous Open Public Records Act requests in recent weeks.

"We have been staggered by the volume of requests, and we're endeavoring to respond as we should through multiple offices of the university. I can't tell you any more than that. I don't know any more than that," McCormick said.