Less than a month after the much-hyped hiring of Brian Kelly as head football coach by Louisiana State University comes word that U.S. Rep. Bill Pascrell is probing whether Kelly’s LSU contract is consistent with federal tax code.
As reported by the The Reveille student newspaper, Pascrell, a New Jersey Democrat who is chair of the House Ways and Means Subcommittee on Oversight, sent a letter dated Dec. 17 and addressed to LSU president William F. Tate IV that laid out Pascrell’s concerns and asked for more information regarding LSU’s athletic and academic programs. A similar letter was recently sent to University of Southern California president Carol Folt after USC offered a large contract to Lincoln Riley.
Kelly will receive a base salary of $9 million annually, with an annual $500,000 longevity bonus and another $500,000 bonus for every year LSU makes a bowl game. LSU has been bowl eligible for 21 straight seasons, excluding the 2020 season.
“Undoubtedly, most of the activities undertaken by LSU further the university’s exempt purposes,” Pascrell wrote in the letter. “However, recent reports about compensation that LSU will pay its current and former football coaches have raised significant concerns about whether the university is operating consistent with its tax-exempt status.”
Before Kelly signed his contract with LSU's administration in late November, athletic director Scott Woodward had to gather nearly $17 million to buy out the contract of previous head coach Ed Orgeron.
Part of Orgeron’s buyout included a $5 million payment on December 15, 2021, and continuing for the next two consecutive years Orgeron will receive two separate $1 million payments. The yearly installments decrease from year to year, but are scheduled through 2025, The Reveille reported.
In a statement to The Reveille, Mark Greenbaum, a spokesman for Pascrell said “Pursuing fair application of the federal tax code that encompasses all 50 states guides the Oversight Subcommittee’s work, and the lavish contracts awarded by LSU and USC to Brian Kelly and Lincoln Riley caught our attention given the tax-exempt status enjoyed by these two institutions. Our Subcommittee continues to examine this wide-ranging issue and is exploring additional letters to universities that have awarded massive contracts to their coaching staff.”
The letter seeks information about “how these programs protect athletes and contribute to LSU’s educational purpose,” specifically asking how many employees make more than $1 million, what departments they work for and what their categorizations are, how much LSU pays as “buyouts” to former coaches, how the football and basketball programs contribute to the schools educational mission (excluding profits), and whether profits are used to support educational programs.
Shortly after he was hired in 2019, Woodward announced the end of a seven-year-old athletic department policy that transferred millions of dollars annually to the university’s general fund, but said he would consider one-time funding of certain projects, such as building improvements. No such funding has yet been made, The Reveille reported.
In a statement to The Reveille, LSU spokesman Ernie Ballard said “We fully intend to respond to Rep. Pascrell’s questions and will outline our position at that time.”
