We need controversial shows like “Friday Night Tykes”
January 6, 2014My Cleveland Sportsman of 2013: Urban Meyer
January 6, 2014Candidly, Jimmy Haslam wasn’t lying when he called the firing of Rob Chudzinski an “expensive decision.” Following the dismissal of the first-year head coach, plenty of talk surrounded the $10.5 million buyout that the Toledo-native would receive along with his pink slip. What didn’t get as much attention was the fact that Chudzinski was simply one line item on the ledger of previous head coaches and front office members to still be on the Browns’ payroll.
CBS Sports’ Jason La Canfora reports that this current coaching search will merely be an addition to the $50 million due to those who have been shown the door.
A year prior Haslam decided to part with team president Mike Holmgren, general manager Tom Heckert, coach Pat Shurmur and their staffs as well, a move that several sources have estimated at having cost him roughly $30 million in all.
Firing Chudzinski, and letting go of high-priced coordinators Norv Turner and likely Ray Horton, will likely cost another $20 million, sources said, and then Haslam is obviously going to have to now pay an entire new coaching staff that is coming on board.
As with most NFL contracts for front office members (and more recently, high first-round draft selections), there is offset language that would allow a bit of a reprieve in the event those who were fired find work elsewhere. La Canfora estimates that even if Chudzinski, Turner or Horton find work as coordinators or collegiate coaches, the amount they will be paid will barely dent what Haslam will be paying for the next several seasons.
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(Image via Candice Vlcek/WFNY)
120 Comments
cash abhors a vacuum.
I would guess that those are separate accounts. (Would the Browns even be able to do that? Isn’t player payroll separate from coaching payroll? Doesn’t that cap space carry-over? Serious questions – I have no idea.)
Totally get that they’re separate pocketbooks/buckets; but all successful business owners “see” them the same. Again, to me, it’s evidence that he cares – even if it doesn’t mean that he can’t buy that pretty yacht he’s been wanting.
Just saying, if the Browns are on the hook for the whole salary minus Chud’s new salary then the Browns would want him to go get a job to save them money.
If paying out a portion of that salary ensures that Chud gets off his duff and takes a coaching job somewhere else then it makes some sense. That’s assuming a lot, of course. Like Chud would rather not coach over the next three years.
Worked for Mangini . . .
My fear is that they will pay this off by means of unused salary cap.
You know… I’ve wondered about that… And it’s why I qualified my comment with “coaching job”. I really can’t know the particulars of how their agreements worked, but I’ve seen it written that Mangini was owed the money minus what he made if he took another coaching job.
Now this is conjecture… but I wonder if that means ESPN commentator or NFL special consultant (or whatever his title is with the 49ers) money doesn’t strictly qualify. Again, this is stuff we just can’t know and less sports and more contract law than anything else… regardless… I’ve spent time thinking about this (long before today too)…. too much time…
unused cap carries over for one year. heckert left them twelve odd million which evaporates if not used this fiscal year. and then there’s the thirteen odd million that’s rolling over into next year and who’s to say that doesn’t go unused also.
and when the company is owned by one person, all those separate buckets are contained within the owner’s overall bucket. it all rolls up to the top.
all im saying is that while i get your point that it’s good to have a colonel ruppert versus a calvin griffith, part of the calculus behind approving a $10M buyout for chud was likely, ‘hey we saved $12M in payroll so net net we’re still up even if we have to eat this contract.’
I think you’re right on, and I believe that’s exactly what happened – which is why I also think Hasbro was likely careful to structure Chud’s contract differently. But . . . it would provide the missing leverage, for sure.
by the way and related: i dont think it’s a given that haslam is particularly flush. PFJ has 4B in debt that is at risk of downgrade. within that 4B there are two loans that look suspiciously like the purchase price of the browns:
$800M and $343 secured term loans. these were got in or around july 2012.
so it’s not like haslam just stroked a check for $700M to buy the browns. i’m just saying we can’t rule out that we actually do have a financially-strapped owner.
Just to play Devil’s Advocate for a minute (not at all saying that I actually hold this belief):
IF what you suspect is true, then it’s potentially evidence for confidence in this FO. Assume that Hasbro realized very, very early that Chud was a mistake and that the Browns weren’t going to have a winning season. Then they adeptly realized that they were going to need $10-12 million to buy him out. Arguably, they weren’t going to get a winning season with $10-12 million in FA acquisitions, so they decided to bankroll the buyout in advance. Let Chud either prove them wrong or hang himself with his own rope. Either way, they’ve hedged their loss. That’s good business management!
Fair point. But . . . if true – if Haslam is a financially-strapped owner, then it’s further confidence for me that spending the $10 mil to buy out Chud was indeed a big decision, and one that we can credit to Haslam.
this would hold more water if haslam had a better hiring record as opposed to the recent PFJ CEO hire/fire in the span of six(?) months as well as the releasing of a half dozen odd execs due to criminal fraud investigations…
but, ok. what you’re saying could be true.
personally i thought chud was doing a great job. perhaps it’s due to the shurmur, crennel experiences and to a lesser extent the mangini tenure.
Usually in things like these, the terms tend to go against the party trying to get out of the contract early. I sure hope Chud’s lawyers put in language to protect him, his salary, and his ability to find new work in case something like early termination occurred.
every now and then you had to see him in a suit & scarf though
could also be due to a front office that wants to micromanage personnel/coaching staff decisions conflicting with a head coach who has a backbone. don’t forget that.
Always soccer gear though. Even he was embarrassed to wear Browns stuff.
Yeah, I have purposefully and with great pain been withholding judgment (and wind) on this whole Chud firing thing since it happened. I’m still agnostic, and don’t believe anything will be clear until well after the new coach is hired and the 2014 draft is in.
I will say this: My kneejerk reaction to the Trent Richardson trade was violent and critical, and I was proven wrong. This alone was enough for me to extend vast amounts of deference to Haslam/Banner/Lombardi – as it alone was better than any and all FO decisions made by this organization in 14 years. Until the new hire and draft (and indictments?) are done, it remains enough for me to give them the benefit of the doubt. I have no idea what to make of the PFJ stuff, and again take an “innocent until proven guilty” stance, but the facts that we actually KNOW about Haslam tend to indicate that he’s a solid and sharp businessman. Hiring and firing CEOs/coaches quickly very well could be the mark of a decisive leader. I have no idea.
Anyway, I figure it will be better for me to show up late to the pitchfork mob than to be one of the groupthink masses that quietly ditches the farm implement and sulks away with my tail between my legs.
Well said… I’ve been somewhat the opposite – keeping mum on the original coaching search, biting my tongue as much as I could about Lombardi, completely sitting out the TR mob, ignoring the salary cap issues, etc etc etc. Now I’m at the point where they don’t get the benefit of the doubt.
I’m still fairly agnostic I think. But at best, they have not diminished my trust in them as Cleveland Browns personnel. Which sounds good until you realize how very, very, very low that bar is set.
Why do you say that? Any good business borrows rather than uses cash to finance big purchases. I don’t see why PFJ would be any different.
$4B in debt for a company that does $30B in revenues simply is not a lot.
In all seriousness, why is this the straw that breaks the “benefit of the doubt” camel’s back? Do you really think that Chud was that good? I’m honestly curious, because my gut reaction was also: “I liked Chud; I thought he was doing a good job.” But when I engage my brain, it occurs to me that he probably wasn’t all that good. At least, there’s no tangible evidence that he was good. I certainly can’t point to any. For me, this has been an exercise of divorcing my Cleveland heart from the “Cleveland guy” (Chud). I think it has relaxed my mind.
I worry that it is just more of the same. New owner, new FO all preaching patience and stability only to just show the same type of constant flux that we are all too used to seeing.
The Chud firing means they are either incompetent in their coaching search last year or impatient to let him build the team. Neither is a good look.
revenue isn’t a useful metric for company health.. he is in the truck stop business; im sure flying j had a lot of revenue before they went bankrupt.
of course you have to borrow to run a business day-to-day. that’s what his 800M revolver is for. of course you need funding for expansion, that’s probably what the other billion term loan is for. all i’m saying is that that other two loans add up to the browns purchase which doesnt seem quite kosher.
anyway, it’s not me downgrading haslams’ debt’s probability of default rating. it’s moody’s and s&p. i guess theyre not super impressed with the 30B in revenue.
I totally get that. But serious question: What was it about Chud that showed that this was the guy that we wanted at the helm for the long haul? I’ve tried to figure it out in my own mind, and have come up with bupkis, with said bupkis continually countermanded (reinforced?) by some hefty evidence of really, really bad coaching.
On the patience front: I see a FO that appears to be as impatient as we are. The other FOs seemed just indecisive. Not this one. Not to me, anyway.
I’m not sure what’s not kosher about it; private company, able to get the bank to loan them the funds, why not?
As for the downgrade, I’m guessing that’s a much greater function of the investigation than anything else. We’ll see what happens if they do get past that in the clear.
I hope his lawyers were louder than his love of hometown.
I shouldn’t say benefit of the doubt. I just mean it hasn’t changed my opinion of them or increased my already low expectations.
I’m not going to go burn down Berea or anything, but I don’t see how such a colossal failure on the most integral of hires can’t raise your ire a little bit.
Exactly… Either a ridiculously stupid hire or a knee-jerk emotional response… Pick your poison.
On Patience: Fans and Coaches worry about the short-term. How to get the most of what is on hand. FO’s are supposed to worry about the long-term and create the best team possible for the coaches/fans.
On Chud: No idea. Hard to believe that the veteran coaching staff wasn’t doing a professional job. Not sure if Chud was the correct guy long-term or not, which is why I haven’t been harping on losing him. I will harp on the decision though because they CHOSE Chud. To think he is so completely inept that they need to cut bait after 1 season means they botched their decision more than anything Chud did.
Well, to that they still get a gold star compared to prior regimes. At least they took action on the colossal failure by correcting it, and quickly! But there we are: low Cleveland expectations are low.
I don’t have an answer, but I wasn’t the one who hired him and gave him 4yrs at $10M+. Banner and company looked at him and said YES!!! Now they’re all like NO!!! Did they not vet this guy? It’s like when McCain started talking smack about Palin after the election.
the kosher part is whether the nfl normally allows franchises to be purchased by businesses. it seems possible/probable that the browns were bought with low-grade debt whose service is reliant on the pfj’s ongoing liquidity.
pilot borrowed 2B to ‘merge’ with flying j in 2009. in 2011 their debt was 2.9B. in 2012 their debt was 4B. that a lot of leverage to take on in a short amount of time.
again, it’s not me raising a flag on this: it’s moodys. their first downgrade of PFJ was in 2011. in it, moodys said “The downgrade of the PDR to Ba3 is driven by Pilot’s proposed all bank capital structure which increases the company’s overall probability of default as well as expected recovery in a distress scenario.” the criminal investigation is contributor to the current negative outlook but so is concern about EBITDA ratios in their core business.
I get that. It’s the optimistic view. The pessimistic is that if they f’d up so badly the first time, what makes you have any trust in any of their decisions moving forward?
Truth: I am completely apathetic towards the Browns so whatever. If I told you how many games I actually watched this year, I think my Browns Card would get revoked.
Which is better? Keeping Shurmur for another year after it was evident to a blind man that he was incompetent, or firing Chud after reaching a similar conclusion (about a much better guy)?
So they botched the hire. We can pound them now for making it, or we can pound them later for not correcting it. Personally, my fists are tired.
or we are just cycling back to the beginning of the new Browns.
Palmer – co-ordinator hired as HC, in over his head plus expansion team stunk, fired after 2 short years.
Butch – great college coach whose style didn’t work in the NFL as well though some bright spots. Left to go back to college after 3 1/2 years.
Romeo – older, respected DC who never got his HC shot until he was likely a bit too old for it, was a great guy, but not fit to lead the team at that point of his career. Let go after 3.5 years
Mangini – an okay but failed HC elsewhere who immediately came here and was given complete control. 1 year control, 1 year lame-duck.
Shurmur – below average OC elsewhere given a promotion based on networking skills and coaching tree. 1 year real HC, 1 year lame-duck.
Chud – good OC resume with multiple styles of offense and good veteran staff to hire to help (thanks to the Bidwells). Let go after 1 year without getting a real chance (hey, sorta like Palmer!!!)
2014 HC – lots of reports of interesting in Franklin, Malzahn, possibly Stoops, etc. Hmmm, college coach as HC.
2016 HC – Hey, looks like we will finally hire Mike Zimmer!!!
Good analogy. I wish McCain had acted as (relatively) quickly as the Browns FO to make a change!
It would still reflect very poorly on his decision making ability.
LoL his Viagra hadn’t worn off yet!
That’s not exactly ‘purchased by a business’. They [I’m guessing] took out loans to fund operations formerly funded by Haslam equity that had been kept in PFJ as cash. i.e. PFJ took out a loan, thereby freeing up cash for Haslam to withdraw from the company, reducing his equity holding.
In regards to the rest, that’s interesting, and certainly a company taking on a lot of debt or using basically purely debt to finance themselves will raise some flags. That doesn’t mean they’re doing anything wrong, though, it just means there’s Qs about if they’re spread too thin vs. the return they’re getting.
It’s just hard to speculate with a private company, and Moody’s is effectively saying “it’s a company that’s growing at a modest rate but picking up debt at a heavy rate, so we’re going to question their ability to fund that debt”. That’s fair, but that could simply be the owners saying they’re going to take cash out and use debt financing even though it costs.
well, the only big-time hires I know Haslam to have made are the Pepsico CEO as Pilot CEO and Chud and staff as coaches (and Banner as FO).
Pepsico guy lasted 6 months. Chud lasted less than 12. I am sensing a pattern that I do not like.
And, I hope that whoever they hire lasts 15 years and this all seems silly. But, I’m allowed to worry about it for now 🙂
But it wasn’t an either/or situation. There was a third option: hire the right guy to begin with.
See (and this is to your other point re optimism vs. pessimism), this is where we differ. We all make mistakes. The bigger our responsibilities, the bigger those mistakes are. I would much rather have a guy in charge that corrects those mistakes quickly than one that doesn’t. To me, that is also good decision making.
all true. and this gets to the greater point i was trying to make in the post: haslam has (may have) more to fear from the credit services’ investigations than the fbi’s.
Well, very easy to say. Much harder to do (particularly if the right guy doesn’t want to be hired).
FWIW, I would venture a guess that a good 20 NFL teams think they hired the wrong guy. At least our team is willing to acknowledge it and fix it.
is there consensus that chud was the wrong guy? not from the locker room. not from respected longtime nfl coaches. not from national punditry.
your scenario is possible, but the evidence indicates that this was an impulsive power play by a impatient typeA.
Well, gosh. The categorical descriptions that you laid out above encompass every possible candidate – including Mike Zimmer! Like to fulfill your own prophecies much?
All of this just shows that NFL head coaching is a crapshoot. I’m all for rolling the dice once more.
I actually doubt that. There’s a reason most every team give coaches multi-years to prove their stuff. It takes coaches time to learn how to be effective NFL coaches.
If the Pepsico guy sucked, should he have kept him to let him suck some more?
I get that everyone is up in arms that Haslam missed on the HIRING of Chud, but still, nobody can explain why his FIRING was a bad thing! I guess it’s just time for us to give up!
It’s not about keeping him. Our issue isn’t with retaining an inept employee. It’s Haslam’s own record of hiring them.
Not to mention, this sort of thing does not make Cleveland an appealing job destination. Would any prospective coach choose us over another NFL HC job? College job? ESPN to kill a year for a better position?
Eh, I doubt that highly. Why should he need to re-do his loans? I don’t think there’s enough reason to believe yet that he can’t at the least keep up to date on the current loans. He may not be able to get more great loans, but as long as PFJ is getting enough to cover the current ones he’s fine. Even within Moody’s downgrade it says it reflects PFJ’s good debt protection and adequate liquidity.