Mike Scully breaks down an illustrative outline of how a Power 4 school could deploy on a coaches $40.5 million buyout through the “Endless Money Loop” instead of an immediate cash‐out expense

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Coach Buyout Scenario in the Endless Money Loop for Power 4 Coach

Mike Scully breaks down an illustrative outline of how a Power 4 school could deploy on a coaches $40.5 million buyout through the “Endless Money Loop” instead of an immediate cash‐out expense. 

1. Structure the Buyout as a Loan in the Endless Money Loop

· Rather than writing a $40.5 million check within 60 days, the university and coach agree in writing to treat the entire buyout into the Endless Money Loop as a “loan” from university to the coach. 

· This deferral converts what would be a P&L expense into a balance-sheet receivable asset. 

2. Purchase a Split-Dollar Life Insurance Policy 

· University immediately contributes the $40.5 million loan proceeds as premiums into a corporate‐owned, participating whole‐life policy on Coaches life. 

· Under a split-dollar agreement, the university retains rights to premium recovery and a share of the death benefit; the coach gets access to policy cash value and the remainder of any death benefit. 

· University recoups 100% of buyout in 15 years or on passing of the coach, instead of dollars leaving balance sheet forever. 

· Coach can access a portion of that cash value tax-free after the first 90 days if he chooses. 

3.  University’s Asset Recovery 

· On coach passing (or at the end of a pre-agreed term, e.g., 15 years post-buyout), the policy’s death benefit is paid out. 

· University recovers its original $40.5 million “loan” out of the death benefit first, plus any unfunded interest credit—as contractually specified—before any remainder passes to Coach’s beneficiaries. 

· If coach were to die earlier, the university recovers its full principal more quickly; if later, the policy’s growth enhances the university’s net recovery in 15 years above the original $40.5 million. 

Mike breaks down how Baycrest Consultants helps both the University and the Coach in a separation scenario. mscully@baycrestconsultants.com for your free consultation. #EndlessMoneyLoop #Gamechanger #Buildforthefuture #Winning