What's Next for Sean Miller and Arizona? Why His Contract Language Could Play a Pivotal Role

Could Sean Miller be better off financially if he's fired by Arizona for violating NCAA rules rather than without cause? His contract language could result in an unusual interpretation.

Does it pay to break rules if you’re the head coach of the University of Arizona men’s basketball team?

Language in Sean Miller’s multi-year employment contract suggests that the answer might be yes.

Miller’s name has come under fire since Friday, when ESPN’s Mark Schlabach reported ​damning accusations concerning Miller. According to Schlabach, as part of the FBI’s ongoing college basketball corruption investigation, phone conversations in which Miller allegedly arranged for a $100,000 payment to five-star recruit DeAndre Ayton. If the payment occurred, it would have obviously been designed to entice Ayton to select Arizona as his college. And it would have worked: Ayton picked Arizona. The 7’1" freshman center is currently averaging 20 points and 11 rebounds a game for the Wildcats and has led them to first place in Pac-12. This will most likely be Ayton’s only season in college: assuming he turns pro this spring, Ayton is a front-runner to be selected first overall in the 2018 NBA draft.

According to Schlabach, on the receiving end of Miller’s phone calls was Christian Dawkins, a former aide to NBA agent Andy Miller (no relation to Sean). Last fall, the federal government charged Dawkins and several assistant coaches—including Miller’s former assistant coach, Emanuel “Book” Richardson—in the bribery, fraud and corruption prosecution. The case has led to a wide range of disclosures, including many detailed in a Friday report by Yahoo Sports’ Pat Forde and Pete Thamel. Forde and Thamel reveal how federal investigators have uncovered evidence connecting at least 20 Division I basketball programs and more than 25 players to receipt of meals, gifts and cash payments.

In a statement, the 49-year-old Miller predicts that he will “be vindicated” once his university investigates the ESPN report. Yet Miller’s statement does not address the specific allegation of a payment to Ayton. The coach and his school have mutually agreed that he will not coach the Wildcats in Saturday night’s game against the University of Oregon Ducks.

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Miller isn’t charged with a crime: The important distinction between law and NCAA rules

Even if Miller is “guilty” of arranging for a payment to Ayton, he might not have broken the law. In its prosecutions of college sports figures, the federal government must prove that paying a recruit ought to be considered a criminal act. To be sure, such a payment violates NCAA rules. But the NCAA is a private, voluntary association of universities. Its rules are not laws.

In its pleadings, the Justice Department portrays under-the-table payments to recruits as crimes. It does so by highlighting that such payments involve representatives of universities arranging for the enrollment of students who are not eligible to compete under NCAA rules. In theory, these universities are “harmed” since scholarships awarded to ineligible players could have instead been given to eligible recruits. The Justice Department contends that the government, and by extension taxpayers, are also harmed in this arrangement: universities “victimized” by bribes receive various forms of federal financial assistance—including financial aid guarantees and grants.

In sharp contrast, attorneys for the defendants depict federal prosecutors as unfairly attempting to transform a mutually beneficial transaction into a criminal act. These attorneys regard payments to recruits as simple exchanges where each side becomes better off: the school becomes more likely to secure the enrollment of a player who will help the school generate a considerable amount of money while the player and his family obtain financial benefit.

How Arizona could fire Miller: without cause or with cause

Whether or not Miller arranging for Ayton to be paid should be considered unlawful or unethical, such an act would clearly violate NCAA rules. If Arizona verifies the accusation against Miller, the school could decide to replace him as head coach. Such a decision would lead the school and its attorneys to review Miller’s employment contract.

Miller, like any college coach employed through a contract, can be fired in one of two ways.

The first way is “without cause.” This is the typical method in which a coach is let go. A “without cause” firing means that the coach has not necessarily done anything wrong, but the school wishes to replace him. Perhaps the team has underperformed. Maybe the coach no longer recruits with the same degree of success. Or maybe it’s just time for a new voice on the bench. Whatever the reason, when a coach is fired without cause, normally the contract specifies that the school will pay the coach a certain percentage on the remainder of the contract.

In the scenario of Miller being fired without cause, his contract indicates that Arizona would pay him 50% on the remainder of his base pay for each year left on his deal. The school would also be obligated to pay Miller monies that have accrued in a deferred compensation fund. Miller’s contract runs to May 31, 2022 and is scheduled to annually pay him between $1.6 million and $1.8 million over the next four years. Should Miller be fired without cause, the school would have to pay him the 50% remainder within 30 days of his firing. This amount would also be paid in one lump sum. Such an arrangement is fairly typical for a Division I coach.

The other way Miller could be fired is “for cause” (sometimes called “with cause”—Miller’s contract, in fact, uses both labels). A “for cause” firing is uncommon, especially in sports. In college sports, such a firing refers to when a school concludes that the coach has violated a specific contractual clause that normally relates to ethical conduct. Usually a “for cause” firing relieves the school of the obligation to pay the coach any remainder of the contract. The coach’s employment is typically considered terminated for purposes of a “for cause” firing only after the coach has exhausted any available appeals with the university to contest the firing. For this reason, the date when the media report a coach as fired and the date when the coach is contractually fired can be weeks or months apart.

Not surprisingly, a “for cause” firing sometimes sparks litigation. To illustrate, the University of Louisville fired Rick Pitino for cause. The decision relieved the school of the obligation to pay Pitino the approximately $38.7 million remaining on his contract. Pitino is now suing Louisville.

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Trying to make sense of the “for cause” firing language in Miller’s contract

As is customary in a college coach’s contract, Miller’s contract with Arizona details the circumstances in which he could be fired for cause. There are six circumstances listed, and they include “demonstrated dishonesty” and “a material or repetitive violations” of NCAA or conference rules. If Miller arranged for Ayton to be paid, he would have done so knowingly and in clear violation of NCAA rules. In that circumstance, Arizona would have a defensible rationale to fire Miller for cause.

Yet for reasons that are not instantly clear, Miller’s contract with Arizona suggests that there might be an unusual, almost perverse result to a “for cause” firing. Darren Rovell of ESPN was first to spot this issue. In the relevant contract section for “respective obligations of the parties in the event of termination with cause”, the contract reads that Arizona’s “sole obligation to Coach shall be payment of his base salary as provided in Section III (and where applicable, any accrued Additional Compensation eared under Section IV prior to the date of such termination).”

Section III defines base salary to include both Miller’s annual salaries for coaching (those salaries range from $1.5 million in 2017 to $1.8 million in 2020 and 2021) and Miller’s annual compensation of $700,000 for completing so-called “peripheral duties”—these duties refer contractual obligations that Miller help to promote the school on TV, radio and the like. Miller, then, earns over $2 million a year in his contract.

The contract does not indicate whether the section’s use of the phrase “base salary” refers to the base salary up until Miller’s effective date of firing—which would be a normal arrangement—or whether it means the remainder of base salary for each season left on Miller’s deal. If the latter is the correct interpretation, Arizona would have to pay Miller 100% of the remainder of his base salary through 2021.

It is also interesting that whereas the language for Arizona firing Miller “without cause” refers to an obligation on the part of the school to pay him a lump sum within 30 days, no such language is in place for a “for cause” firing. This might supply further evidence that Miller would receive 100% of his base pay if fired for cause firing (although he would paid in installments over the remaining few years instead of within 30 days).

To further that point, if Miller can show that “for cause” provisions contained in the contracts of other head coaches at Arizona are worded more conventionally, he would obtain a more compelling argument that the language of his contract is intentionally different. The same would be true if Miller’s contract omits university policy language that might otherwise bear on the “for cause” provision.

No matter the correct interpretation, Miller would owe money to Arizona if the school fires him for cause on grounds of NCAA or conference violations. In that scenario, a damages provision in the contract indicates that Miller would have to refund any additional compensation he received for his players performing well academically or his team advancing in the NCAA tournament. This provision also stipulates that Miller would have to pay the school up to $300,000 for damages that his rule breaking would have caused the school.

An easy fix for Arizona, but the contract still deserves an explanation

The obvious way Arizona could avoid having to pay Miller the remainder of his contract would be to fire him “without cause”. In that case, as explained above, the school would owe him 50% of the remainder of his pay along with accrued funds in a deferred compensation fund. This formula would likely lead to a significantly lower payment than if the school fired Miller “for cause.” While it would be strange to fire a coach who has his team in first place in the conference, the school could explain that it would prefer a different voice for its players.

Ever so, it remains a curiosity as to why the contract with Miller could be read as saying that Miller would be paid more for acting unethically and breaking rules.

A cynic might speculate that Arizona officials wanted to incentivize Miller to break NCAA rules in order to assemble a stronger team. From a purely economic perspective, this viewpoint would make a great deal of sense. As Bill Simmons tweeted on Saturday, Ayton is worth much, much more to Arizona this season than $100,000. The same goes for the monetary value of Ayton's athletic scholarship, room, board and books. Apart from NBA players, Ayton is, arguably, the most dynamic young basketball player in the U.S.—and he’s a Wildcat.

This cynical approach seems nearly implausible. The idea that a university president and general counsel’s office would openly embrace skirting NCAA and university compliance rules within an employment contract sounds like fiction. And even if they wanted Miller to break rules, they would not have unwittingly alerted the public of that goal. To that end, as a public university, the University of Arizona’s contract with Miller is easily discoverable through a public records request.

An alternative explanation for the ambiguous language in Miller’s contract is that university officials, including the legal counsel’s office, somehow failed to carefully review the contract before it was finalized. This is possible, although also unlikely. After newly hired Wildcats head football coach Kevin Sumlin, who in January signed a reported five-year, $14.5 million deal, Miller is the second-highest paid employee at this taxpayer-funded university. His contract likely had multiple attorneys on behalf of Arizona assiduously read it over.

Perhaps the most believable explanation is that university officials read the contract in an entirely different light. As noted above, the contract does not specify the timing for payment of “base salary”. The university might argue that it would be illogical for the term to mean anything other than industry standard: payment of base salary up until the effective date of firing. The university could further point out that the phrase “prior to the date of such termination” is included in the for cause language, although it is found in a parenthesis referring to “any accrued Additional Compensation” and not to “base salary”.

To be clear, there is no current dispute over Miller’s contract. But if Miller is fired without cause, a counter-intuitive contract dispute might surface: Miller arguing that he engaged in unethical conduct and thus should have been fired for cause. It would make quite the lawsuit.

Michael McCann, SI's legal analyst, provides legal and business analysis for The Crossover. He is also the Associate Dean for Academic Affairs at the University of New Hampshire School of Law and co-author with Ed O'Bannon of the new book Court Justice: The Inside Story of My Battle Against the NCAA.