Rodriguez Contract and Tax neutralization: Shand was right


Thanks for the comments, emails and the feedback on the Dave Shand interview. The Blog that Yost Built called it “one of the best things I’ve read on the blogosphere. Ever.” And there’s been all kinds of discussion on various parts of the interviews on blogs and on all the major message boards. It’s always fun to see how people react to things you post, this was a thrill.

Anyway, with Coach Rodriguez signing his contract last week we’ve got some specifics on the deal and at least part of what Shand revealed in the interview is confirmed. Recall that Shand said he heard that Rodriguez didn’t realize that the buy-out portion that Michigan paid to West Virginia was taxable, here’s part of the interview:

So it cost Michigan, they say $2.5 million. But I’ve heard, through back sources, that Rich Rodriguez did not realize that the $2.5 million that Michigan is paying on his behalf is taxable, so Rodriquez is going to have to pay taxes on that. Michigan… has paid taxes on the [buy-out funds] it paid on his behalf which is all taxable income…

Thanks to the contract being available via FOIA, we know that this is true (here’s the full contract), see section 3.02, part (g):

Shand also said he heard that the University paid all of the $4 million buy-out, not just the $2.5. There’s no evidence of that in the contract, although just because that is not specified in this contract it doesn’t mean they didn’t pay it in one form or another.

Related: Here’s all of the interview:
Part I: What he’s up to, the lawsuit with Bill Martin, more.
Part II: Jim Carty and the News Series
Part III: Coach Red and the Fab Five
Part IV: The Rodriguez hire