re: Miles unethical negotiation at LSU

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Deferred assets (or liabilities) typically result from differences in tax accounting and book accounting, so not sure what exactly you are getting at here.

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Deferred accounts can occur for a variety of reasons, deferred revenue is probably the most prominent kind that doesn't have anything to do with taxes, deffered assets relating to leases is about to over take it. LSU did not recognize a full loss when the signed the original agreement. They put it through the P&L as the costs were incurred.

Original Entry:
Debit Deferred asset $11m
Credit ST/LT liab $11m

Monthly Payments Made:
Debit ST Liab $133K
Credit Cash $133k

Debit P&L $133K
Credit Deferred Asset $133K

Settlement:
Debit ST/LT Liab $1.5M
Credit Cash $1.5M

Debit P&L $1.5M
Credit Deferred Asset $1.5M

Settlement Clearing Entry:
Debit LT Liab $5M
Credit Deffered Asset $5m

SHOW ME THE GAIN!!!

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They did. They also spent $1.5MM more than they needed to.

Congrats Les!!!

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Listen bud, I’m not saying you’re mentally challenged, but you might want to have a couple tests run

Know not no.. Mr businessman

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Absolutely is...

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No one's questioning that. Some people are just saying that Les milked them of that 1.5mm and they probably didn't need to pay it, most people disagree.

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I'm agreeing with EVERYTHING your saying, and this point is the X factor that we most likely will never know. I make a series of assumptions that leads to LSU saving $6.5mm. You're assumptions lead you to LSU saving $5mm.

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So let’s look at the possible assumptions here. There are a few different scenarios that lead to different outcomes for LSU, Les, and KU:

Miles chooses not to coach
If Les continues with the status quo, he continues to collect from LSU over the next 4 years.
- LSU pays Les $6.5MM
- KU pays Les $0
- Les collects $6.5MM

Miles goes to KU for less money
If the KU contract is less than $1.6MM/year, LSU has to make up the difference. For this analysis, let’s say he gets a four-year contract from KU at $1MM per.
- LSU pays Les roughly $2.5MM
- KU pays Les $4MM
- Les collects $6.5MM

Miles goes to KU for equal or more money
If the KU contract is greater than $1.6MM/year, LSU owes nothing. However, LSU’s obligation does come back if he gets fired or leaves KU before the buyout period is over. Let’s assume KU gives Les a 4-year deal at $2MM per.
- LSU pays Les $0 (assuming he makes it through the full four years)
- KU pays Les $8MM
- Les collects $8MM

Miles goes to KU for equal or greater money, but they backload the contract to take advantage of buyout
I think this is the most likely scenario if Les doesn’t negotiate the lump sum with LSU. It allows KU to negotiate a contract where Les makes more money over a four-year period while simultaneously reducing KU’s out-of-pocket obligations. For example, let’s say they negotiate a contract worth $500k in year one, $1MM in year two, $1.5MM in year three, and $3.2MM in year four. LSU would be in the hook for the difference in years one-three, and would still have further risk if Kansas fires Les before year four.
- LSU pays Les $1.8MM (assuming he makes it through the full four years)
- KU pays Les $6.2MM
- Les collects $8MM

Miles negotiates lump sum payment on buyout
This puts Miles in the best negotiating position, as it prevents KU from using his buyout to save money. Kind of like selling your vehicle yourself so you don’t have to negotiate a trade-in. Let’s say KU still thinks Miles is worth $8MM over four years.
- LSU pays Les $1.5MM
- KU pays Les $8MM
- Les collects $9.5MM

So 3/4 of these alternatives to the lump sum result in LSU paying MORE than $1.5MM, while 1/4 results in LSU paying less. Also, all of the alternatives still leave LSU with further liability if Miles loses his job at KU. The lump sum is a win for LSU because it eliminates risk. The lump sum also gives Les the highest take-home pay out of all examples. I don’t get why people don’t understand this is a win-win for both parties.

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If Miles gets the Kansas job which is being reported as likely, What he did to LSU in his negotiations is highly unethical. If he knew he had the Kansas job locked, he just knowingly screwed LSU out of another $1.5 Mil.

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Dumb arse that is why he settled for 1.5 million. That is the difference between what Kansas will pay him and LSU owed him before the negotiated deal.

This is why Louisiana education is bad, some of you reproduce

Nope LSU owes him money. He negotiated a deal that made it better for LSU to get out.

He could have taken a cheap Kansas deal and made LSU continue to pay him the balance.