The Panthers fired head coach Matt Rhule on Monday after a home defeat at the hands of the San Francisco 49ers the day before. As the Panthers have so far slipped to a 1-4 record, and with Rhule winning 11 and losing 27 games during his tenure with the team, it might have been expected that he was walking a thin line.
Rhule, 47, has seen success at the college level in which he turned around both Temple and Baylor universities. However, the Panthers felt the bounce wasn’t happening for them and have placed defensive pass game coordinator/secondary coach Steve Wilks as the interim head coach.
What is eye-watering about Rhule’s firing is that he will pick up $40 million from the six-year guaranteed contract he signed in 2020.
The money will only be an issue if Rhule takes charge of another NFL team, so he has to decide whether to enjoy his millions and sit out a few years or whether the desire to coach again will overrule his desire for the cash.
Dr. Dan Plumley, principal lecturer in sports finance at Sheffield Hallam University in the U.K., told Newsweek that the practice of offering lucrative, long-term contracts will have to be tempered in order for NFL teams to stay sustainable.
The huge payoff being given to Rhule along with other football head coaches including Herm Edwards, who is still getting $10.8 million after his dismissal from Arizona State University, could see new contract deals being reshaped so that teams are not left with such a financial burden, according to Plumley.
Despite this, the system seems to be working for many teams with the financial foundations stronger in the NFL than there is in soccer.
He said: “There is plenty of research on managerial change in American sports that suggests teams have been more inclined to give coaches longer contracts with less managerial turnover seen in American sports versus other sports around the world (English soccer being the prime example).
“This has also been linked to the structure of American sports in a sense that revenues are more secure and predictable because you have closed leagues, salary caps, revenue sharing agreements, etc.
“However, some more recent examples of high compensation payouts in American sports might mean that things are changing slightly and more emphasis is being placed on short-term sporting performance than ever before.
“Revenues remain safer for American teams compared to other sports, but people are now also seeing the opportunity for teams to generate more revenue through innovative digital platforms (often engaging with fans directly) and more lucrative commercial and sponsorship opportunities.
“With this, comes the added pressure of success on the field of play being instant to deliver significant returns.”
Plumley continued: “Financially, this may force some teams to change the way they approach head coach contracts and we may see shorter deals signed in the future to better manage the finances and lower the risk.
“We have also seen release clauses and agreed compensation fees in manager contracts now being signed up front in other sports so that both the team and coach know that if they are to be fired then they will receive a negotiated amount (most likely lower than the full contract value) agreed upfront as part of the deal.
“It is the acute pressure of short-term sporting success that is driving the model here and we may see a change in the length of contracts that head coaches sign in the future as clubs have to balance financial sustainability with sporting success.”
Sports finance expert Daniel G. Kelly II, who is the academic director of graduate programs at Preston Robert Tisch Institute for Global Sport at NYU, has told Newsweek that it is actually necessary for teams of the Panthers’ stature to go bold with the bucks to give them a chance of mixing it with some of the ‘bigger’ teams in the NFL.
Kelly said: “In 2020 when Carolina Panthers owner David Tepper hired Matt Rhule for seven years and $62 million, it set a new standard for coaching contracts in the NFL.
“It was a major publicity move for the small market team.
“The coaching marketplace for ‘proven winners’ at both the NFL and NCAA Division-I level has gotten so competitive that it is a proverbial ‘financial’ arms race to acquire top-tier talent.
“The recipe for winning in high-level football is linked directly to players and coaches similar to any business entity looking at high-level talent and leadership to bring in strategic competitive advantages.”
Kelly continued: “Unlike the current trend of ‘younger’ coaches with flashy personas such as Sean McVay [of the Los Angeles Rams], Zac Taylor [of the Cincinnati Bengals], and Kliff Kingsbury [of the Arizona Cardinals], Matt Rhule was a proven commodity who was adept at building winning football programs in college with Temple University and Baylor University.
“David Tepper was looking at Rhule’s pedigree in college [as head coach] and past experience [as an assistant coach] with major NFL experience to build a winner for the Carolina Panthers.
“Long-term contracts with guaranteed money are needed by NFL owners like David Tepper in order to get a hot-shot coach like Matt Rhule to consider leaving a ‘cushy’ college job for the allure of the NFL.”
Speaking about the financial implications to the team, Kelly told Newsweek that it is the only way the likes of the Panthers can have a chance of competing on the same level as other teams in the NFL.
He continued: “Financially speaking, this type of investment in a long-term/high-value financial deal by David Tepper who needed a spark to win games which leads to increased ticket sales and merchandise revenue.
“Additionally, the publicity from bringing in a proven winner from the coaching ranks impacts sponsorship and partnership engagement and increases the visibility of a small market team like the Carolina Panthers.”
With some soccer teams having a rise from the splash of cash before a terrible fall when the money dries up, Kelly believes the NFL is fit to combat that and that teams will not be in danger of being liquidated due to financial issues.
He continued: “While the NFL head coaching contracts are guaranteed, unlike the player contracts, there are some contractual contingencies such as ‘mitigation,’ where the amount of money owed on the contract can be lessened or terminated based on the coach [Rhule] receiving another head coaching opportunity [or making an attempt to find another opportunity].
“In the end, David Tepper and his $18.5 billion fortune from hedge fund investment banking might see this type of risk/reward to be worth the time and effort.”
Meanwhile, Rhule will no doubt spend some time for reflection before beginning to enjoy the benefits of the last four years of the guaranteed contract he signed in 2020.
