Due to the increased public attention to and congressional scrutiny of athletic compensation trends, colleges, universities and athletics department entities and their supporting organizations are advised to consider the following when negotiating and documenting compensation arrangements with key administrators and coaches:
(1) Whether the applicable contract allows the administrator/coach sufficient autonomy or authority to cause the administrator/coach to be a “disqualified person”, therefore subjecting the compensation arrangement to §4958;
(2) Whether the organization has established an independent body, or committee, to evaluate and approve proposed compensation arrangements with disqualified persons;
(3) Whether the organization has an appropriately robust, current and accurate comparability data set to evaluate the amounts and varying forms of compensation and benefits payable to similarly situated employees; and
(4) Whether the organization maintains complete and contemporaneous records of the process by which compensation decisions are made and approved?
Analysis of the foregoing fundamental considerations is a worthy exercise for determining exposure to Intermediate Sanctions.
The more recent Tax Cuts and Jobs Act has potential to disrupt the collegiate sports industry. But athletics directors (whether in their capacity as the organization manager or, potentially, a disqualified person) at many institutions should remain mindful of and diligent about their individual exposure to Intermediate Sanctions.