For several months in 2022, the LSU Tigers paid Brian Kelly over $1 million that he was not owed. Let’s explore how and why this took place — and how the school is making things right.
On Nov. 30, 2021, Brian Kelly stuck a fork in a dozen-year run as head football coach at Notre Dame to accept the top job at LSU. More than a few pundits and fans interpreted the move as puzzling given that the Bayou Bengals had just gone 6-7, while Kelly had steered the Fighting Irish to five consecutive seasons with double-digit wins.
But what if I told you that in the SEC, it just means more?
And more specifically, that Louisiana State University sometimes pays you twice?
As noted this week in the Greater Baton Rouge Business Report, a state auditor noticed that Kelly received $1,001,368 in additional pay in fiscal year 2022 beyond what he was owed under the terms of his 10-year, $95 million contract.
Long story short, no malfeasance has been alleged and the school has committed to making things right on the balance sheet in 2023. But let’s take a step back — how, exactly, does a state employee suddenly fall into an extra million buckos he wasn’t entitled to in the first place? What went wrong, and how are LSU and Kelly making this right?
You have questions, Boardroom has answers.
What are LSU’s Brian Kelly contract details?
He’s making an average of $9.5 million per season in total compensation, but it’s notable that Kelly’s base salary with the Tigers is actually just $400,000. The bulk of what he can and will make comes from bonuses — for instance, $500,000 for bowl eligibility and $500,000 more if he wins the national title — and an intentionally broad category called “supplemental compensation” that promised him $8.6 million in 2022.
It’s this category under which the overpay in question falls.
Click here to read Boardroom’s full Brian Kelly salary and buyout overview at LSU.
Where and how did the $1,001,368 overpayment occur?
This erroneous sum was publicized as part of a customary audit included in a report released by Legislative Auditor Michael J. Waguespack and First Assistant Legislative Auditor Ernest F. Summerville Jr.
As they wrote on Jan. 23 (emphasis mine):
We also found the current head football coach was overpaid $1,001,368 in supplemental payments in fiscal year 2022 (the reporting period). This was due to LSU making double payments in May and June 2022. The coach began his employment with LSU in November 2021, subject to the terms and conditions set forth in a Term Agreement between LSU and the coach. LSU made supplemental payments to the coach directly from November 2021 through April 2022. In April 2022, the Board approved an Employment and License IP Agreement by and among itself, the coach, and the coach’s LLC. The new agreement superseded the Term Agreement. In May 2022, LSU began making supplemental payments to the coach’s LLC. However, LSU also erroneously continued to make supplemental payments to the coach directly, thereby resulting in monthly double payments until LSU management detected it in November 2022. LSU management and the head football coach have enacted an adjusted payment schedule so the amount of overpayment will be recouped by the conclusion of fiscal year 2023.
In other words, a change in some legal fine print required these monthly supplemental payments to cease going directly to Coach Kelly and instead to his LLC. Starting in April 2022 and continuing for several months, the university did not discontinue sending the direct payments to Kelly.
How was this error discovered privately and subsequently communicated publicly?
LSU noticed the monthly overpays in November of 2022, at which point they were discontinued.
As a state institution, the office of the Louisiana Legislative Auditor is required to review LSU’s financial activities regularly — click here to read the full report.
Is Brian Kelly immediately required to pay back the money?
No. According to the legislative audit report, the parties “have enacted an adjusted payment schedule so the amount of overpayment will be recouped by the conclusion of fiscal year 2023.”
How much does the overpay represent compared to LSU football revenues or overall Tigers athletics revenues?
In 2022, a sum of $1,001,368 was approximately equal to:
- About 2.8% of football program profits ($35.7 million)
- 1.05% of football program revenues ($95.1 million)
- About 0.05% of LSU athletic department revenues ($199.3 million)
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