Mike Scully - Managing Director at Baycrest Consultants shares their plan to help Universities dealing with their Coach's Buyouts!

 Atlanta, GA 

Mike Scully - Managing Director at Baycrest Consultants shares their plan to help Universities dealing with their Coach's Buyouts!  

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

Here’s 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.  

4. Financial Impacts & Benefits  

• For University:  No immediate $40.5 million cash‐out; the buyout becomes a long-term asset that grows on the university’s balance sheet.  

Offsets—or even eliminates—the lump‐sum budgeting shock and may help avoid or reduce excise taxes on high-compensation payments.  

• For Coach: Deferred income avoids a large tax bill in the year of termination.  

Provides optional liquidity: tax-free policy loans or withdrawals after 90 days, giving him flexibility for new career opportunities or personal needs.  

Long-term retirement asset with death‐benefit protection for his heirs on any residual value.  

5. Summary  

By rolling his $40.5 million buyout into the Endless Money Loop, the university would transform a six-figure near-term liability into a multi-million-dollar, tax-efficient asset. Coach gains optional tax-free liquidity and retirement funding, while the university recoups its outlay over time—potentially with investment upside—rather than simply writing a large check on day 61.