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PSU’s O’Brien gets raise in new contract

June 21, 2013
By Cory Giger ( , The Altoona Mirror

Bill O'Brien has been given a new four-year amended contract by Penn State, and it's a sweetheart deal for the football coach that includes more money, more perks and a reduced buyout if he decides to leave for an NFL job.

O'Brien will receive close to a $1 million raise in base pay for 2013, bringing his total salary for the upcoming year to nearly $3.3 million. His overall annual salary still includes $1 million in pay from TV/radio, plus $350,000 from Nike.

O'Brien will be the third-highest paid coach in the Big Ten this season, behind only Ohio State's Urban Meyer ($4.3 million) and Iowa's Kirk Ferentz ($3.835 million).

His raises vary in the coming years and will total about $2 million more in base pay for the life of the contract.

The new contract also provides O'Brien more financial flexibility if he decides to leave Penn State for an NFL head coaching job.

His new buyout stipulates that he would only have to pay the school to cover his base salary for the remaining years left on the contract. Under his previous deal, O'Brien's buyout included base salary plus the $1.35 million per year owed to him from TV/radio and Nike.

The new four-year contract replaces O'Brien's previous one, which had eight years remaining on it. He signed a five-year deal with Penn State in January 2012, then had an additional four years added to it to cover the amount of years the Nittany Lions received in NCAA sanctions.

O'Brien led the Lions to an 8-4 season in 2012 despite incredibly difficult circumstances that included the school and program being hit with unprecedented sanctions in the wake of the Jerry Sandusky scandal. For his efforts, he was named national coach of the year by several outlets.

"In the face of great adversity, Bill did a tremendous job with all facets of the Penn State football program," PSU athletic director Dave Joyner said in a university statement. "This rightly recognizes Bill's outstanding achievements in guiding our student-athletes on and off the field."

O'Brien said in January that his desire to remain at Penn State despite the heavy sanctions is "not about money." He also said at that point he had never asked for a raise.

"Hey, look, six months down the road, if I get a raise - would you like a raise?" O'Brien said. "Everybody would like a raise every once in a while. Yeah, of course I'd like a raise. I'm just like everybody else. But I have never asked anybody for a raise."

It's not clear how the new contract came about. The Big Ten Network reported Thursday that O'Brien has a new agent, having parted ways with Joe Linta and now being represented by Neil Cornrich.

Here are the primary components of O'Brien's new contract:

n His base salary previously was $950,000 per year, plus a 5 percent annual raise. Now his base pay will be $1,932,779 for 2013 (running from July to July), then will drop to $1,137,096 in 2014 before going back up to $1,650,994 in 2015. His salary for 2016 and each year going forward would be a 5 percent annual raise from the 2015 figure.

n Including the TV/radio and Nike money, O'Brien's total salary will be: $3,282,779 in 2013; $2,487,096 in 2014; $3,000,994 in 2015; and $3,083,543 in 2016. That averages out to about $2.96 million per year.

n The contract expires on Jan. 6, 2017, or after PSU finishes playing in a bowl game that season. Beginning Jan. 6, 2016, the school will review his performance and can extend the contract from one to three years.

n The buyout component is where things get interesting.

O'Brien previously was making $2.3 million per year base pay and TV/radio plus Nike, and had he left PSU for any reason, he would have owed that amount multiplied by the number of years left on his contract.

There has been a discrepancy in various published reports about whether O'Brien's buyout would have encompassed just the remainder of his initial five-year deal, or if it covered the remainder of the full nine years (including the four-year addendum because of the sanctions). Linta told the Mirror in 2012 that the buyout would have been only for the initial five years on the deal.

Under his new contract, if O'Brien leaves Penn State for any reason other than an NFL head coaching job, his buyout would still include his base salary plus the TV/radio and Nike components, times the number of years left on the contract.

However, if he leaves for an NFL head coaching job, the buyout would only be his base salary times the number of contract years left. It would not include the $1.35 million per year from TV/radio and Nike, thereby saving him and/or any NFL team that wants to hire him a substantial amount of money.

That last part could make O'Brien even more appealing as an NFL coaching candidate if a franchise knows his buyout isn't an enormous figure.

The buyout figure would be based on his current salary in a given year.

If he were to leave Penn State immediately after the 2013 season, O'Brien's buyout would be his 2013 salary of about $1.9 million times the remaining 3 years left on the contract. If he leaves after the 2014 season, the buyout would be his 2014 salary of about $1.1 million times the remaining 2 years.

n O'Brien also is getting perks from the university in the contract, including: a van that will accommodate a special needs passenger for his son, Jack, and 35 hours of personal use per year on a university plane.

n There are financial incentives included that could pay O'Brien up to $200,000 per year if PSU's record is good enough to qualify for a bowl game, Big Ten title or other championships, regardless of whether it is eligible to actually play in those games because of NCAA sanctions.

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