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Harbaugh’s Michigan contract has base value of $40.1 million


Before Jim Harbaugh decided to become the head coach of the University of Michigan, multiple reports pegged the pending offer at six years, $48 million. Recently, ESPN’s Adam Schefter (a Michigan grad) called the package “the richest contract in college football history.”

A one-page term sheet provided to the media suggests otherwise. But the package likewise isn’t as cash poor as suggested, either.

Characterized by Michigan’s A.D as the “same basic contract as 49ers,” it’s not. Harbaugh made $5 million per year from the 49ers, and nothing more. At Michigan, Harbaugh will get a salary of $5 million per year on a seven-year deal. But the document plainly states that Harbaugh will receive a 10-percent increase after the third and fifth year.

If my math is correct (and it rarely is), that’s $5 million, $5 million, $5 million, $5.5 million, $5.5 million, $6.05 million, and $6.05 million. It equates to a total of $38.1 million over seven years, an average of $5.44 million. Throw in a $2 million signing bonus, and the average moves to $5.72 million.

He also gets $125,000 for each Big Ten title game appearance, and another $125,000 if Michigan wins (which puts up to $250,000 per year in play). For any major bowl-game appearance, he gets another $200,000; the total is $300,000 if the team makes it to the four-team playoff. Win the national title, and he gets another $500,000.

Winning the Big Ten coach of the year pays out another $50,000, and being named the national coach of the year by one of up to six different organizations triggers another $75,000. Also, another $150,000 per year is available for academic performance.

That translates to a total incentive package of $9.275 million, pushing the maximum value of the deal to $49.315 million.

Finally, and perhaps most importantly, Michigan has agreed to “determine an appropriate deferred compensation arrangement” after the 2015 season. Who knows how much more that will generate?

These numbers raise a couple of questions. First, who was pushing the $8 million per year average? Second, why is Michigan trying to downplay the value of the package?

As to the first question, we don’t know the “who” but the “why” has always been obvious. Pushing it was $8 million per year set a bar that other NFL teams would then have to try to match or beat.

As to the second question, well, the answer is also fairly obvious. With the players still getting nothing (plus snacks!), the higher the compensation for the coach, the more unseemly it all looks. So calling it $5 million per year, just like what he was getting from the 49ers, sounds a lot better than a $40.1 million guaranteed base package with up to $9.275 million in incentives, along with a commitment to determine appropriate deferred compensation, however much more that may be.