Messy & Expensive Financial Situation Revs Up Pressure on Tedford and Cal

Christian Petersen - Getty Images

Jeff Tedford is under intense pressure in Berkeley. But the financial situation around his contract and the expensive renovation of the Memorial stadium has the California athletic program in between rock and a hard place.

If you haven't done it yet go over to Jon Wilner's College Hotline blog and read up his post on the financial state of the California football program with details on Jeff Tedford's K and the massive debt pertaining to Memorial Stadium.

Tedford of course is on the hot seat in Berkeley (even though his body of work since his arrival in Strawberry Canyon makes him the best coach in program's history). But firing him is not going to be an easy decision for the Bears. On one hand, the buyout amount for Tedford's K (and all of his assistants) is massive:

It's not unreasonable to think - again, if Cal's collapse continues - that Tedford and the university would come to an agreement by which he receives less than the $6.9 million, paid out in a lump sum, in exchange for ripping up the mitigation clause.

But the costs of dismissal aren't restricted to Tedford's contract.

There's the expenses involved in turning over the coaching staff ... and the price tag of the new coach's contract over and above Tedford's annual salary ... and whatever the new staff would make over and above the current staff ... and the cost of the search itself (travel, executive placement firm, etc).

So we're talking well in excess of $7 million.

(Salaries for top coordinators and assistants aren't going down. Every new coaching staff in the Pac-12 earns more than the one it replaced.)

Whether the total termination expenses are $8 million or $10 million, it's a ton of money - and it can't come from the university. State funds don't pay Tedford's salary, and state funds won't pay Tedford's walk-away money.

Ouch.

On the other hand, the cash stripped Cal athletic department is under intense pressure to fill up it's "premium" stadium seats in their renovated stadium as a result of complicated financing arrangements around the renovation:

[T]he heart of the financing plan is the Endowment Seating Program (ESP), which allows fans to buy 50-year rights to approximately 3,000 premium seats. The ESP payments can be financed over time and are placed into a fund that's used to service the debt.

The university's goal is to raise $270 million through the ESP by next summer. According to the latest figures available, through June 30, the Bears have just $40.7 million cash in hand.

That's not good, but it's not quite as bad as it looks:

1. For all intent and purposes, the figure is a bit higher because a large account (approx 30 seats) is being modified and, for that reason, isn't reflected in the report.

That single account could produce several million dollars, depending on the price of each seat, once it's on the books.

2. The $40.7 million cash-in-hand equates to $140 million over time, which is 52 percent of the $270 million goal - assuming, of course, that the payments are made.

And there's one of the keys to the Tedford situation: Participants in the ESP can drop out at any time, without penalty.

Imagine a scenario in which the season continues to fizzle and the university decides, for whatever reason, to keep Tedford.

Double ouch.

So the game against UCLA is shaping up to be Armageddon for Tedford, his staff and the embattled Cal program. You can bet they are going to come out and make one last stand to turn around this season.

GO BRUINS.

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