Gruden-Browns Deal Would Have Had to Clear NCAA Hurdle

Yesterday a report came out that ESPN commentator Jon Gruden had received an offer to become the head football coach at Tennessee, but with a twist. Included in his compensation would be a part ownership stake in the Cleveland Browns, courtesy of Jimmy Haslem, the Browns owner and a UT booster. Both Gruden and the Browns have denied the report. But it would have had two difficult hurdles to clear if it ever happened.

NCAA rules prohibit boosters from supplementing the pay of coaches. Any pay or benefits must come from the university. The same goes for in-kind gifts. Courtesy cars from dealers who are donors or sponsors are first donated to the university, then provided by the athletic department for the coach’s use. That would mean Haslem would have to donate an interest in the Browns to Tennessee, who would then “pay” Gruden with that interest.

But Haslem cannot give an interest in the Browns to UT. NFL Bylaw 3.2(B)(2) states that interest in a holding company which holds NFL franchise rights may only be held directly by individuals or by certain partnerships or trusts approved by the commissioner. Rule 3.2(A) also says that nonprofit corporations (which the University of Tennessee and its athletic department are) may not become new members of the league, although that would not seem to apply in this case, but shows a preference for not having nonprofits involved in NFL ownership.

To get around this rule would require the complex transfer of ownership rights or future interests in the Browns to a trust or partnership, all of which must be approved by the commissioner despite everyone knowing what the real purpose is. And if there is an actual transfer of ownership, it must be voted on by the NFL owners, potentially twice in this case.

The combination of NFL and NCAA rules make it impracticable, if not impossible. All of this legal wrangling including potential votes of the NFL owners would need to be conducted within the compressed timeframe of a coaching search. While there might in theory be a way to do it, there simply is not enough time.

Posted on by John Infante
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