FAYETTEVILLE — John L. Smith’s financial situation took another unexpected turn this week after documents revealed the Arkansas coach arranged to have $600,000 of his $850,000 in pay deferred until after the season.
USA Today first reported the arrangement late Sunday night. Smith’s personal services and guaranty agreement with the non-profit Razorback Foundation, which was obtained through a Freedom of Information Request on Monday, stipulates the 63-year-old would receive a $300,000 payment on Dec. 31. He will receive another $300,000 payment on Feb. 23, which is the final day of his 10-month contract.
The other $250,000 comes from the university in monthly payments.
The arrangement was finalized on Aug. 30 and came a week before Smith filed for Ch. 7 bankruptcy on Sept. 6. It raises legal questions about whether Smith deferred pay to keep it away from his creditors. Smith has a meeting with creditors in U.S. Bankruptcy Court on Friday, which is a day before Arkansas plays Kentucky.
Smith declined to comment about the deferred pay Monday.
“I will comment on football,” Smith said. “I would rather not comment on any of that. That's not in my hands. I am preparing for Kentucky.”
Arkansas athletic director Jeff Long and chancellor David Gearhart weren’t available for comment. But Arkansas spokesperson Kevin Trainor said Smith’s negotiation to have money deferred is “consistent” with other Arkansas coaches. It’s not immediately clear, however, if any have as much as 70 percent of their pay deferred.
“It is not unusual for the university to work in coordination with a coach and his representatives on the allocation of compensation,” said Trainor, who also stressed Smith’s total compensation package - $850,000 – has never changed.
The university’s letter of agreement with Smith, which was signed on April 23, indicated he would earn $425,000 in monthly payments from the university and $425,000 from the Razorback Foundation. But the letter also allowed for Smith and his “financial advisers, to develop alternative structures and allocations for the payment of the total economic value of your compensation subject to the policies of the Board of Trustees and the laws of the State of Arkansas.”
Smith signed his formal employment agreement on July 10 with new terms, which stated he would receive $250,000 in monthly payments from the university and $600,000 from the Razorback Foundation. The Razorback Foundation portion of the contract, which is for television and radio shows, was finally signed on Aug. 30 and laid out the terms of the $600,000 being received in two installments.
“The university has been forthright in how much he’s going to get paid,” said Trainor, who stressed Smith’s financial situation was personal and not a university matter. “His employment agreement was laid out. The $250,000 would come from the university and that there would a Razorback Foundation agreement.”
Smith’s financial troubles stem from land development deals in Kentucky that soured. He made his struggles public in July, telling the Associated Press he wanted it out in the public before the season so it wouldn’t be a distraction or an embarrassment for the Razorbacks. Long also said at the time he was made aware of Smith’s financial situation before he hired him to replace Bobby Petrino.
It has been in the spotlight since Smith filed for bankruptcy on Sept. 6.
A full filing two weeks later showed Smith claimed $25.7 million in liabilities and $1.2 in assets. The original filing was amended last week to show Smith had $40.7 million in liabilities and $1.3 million in assets. The $15 million difference was because of a loan owed to Branch Banking and Trust in Louisville, Kent.
“It was just a matter of research and finding out everything that’s out there, different loans,” Smith said last Thursday about the additional $15 million in liabilities.
“To be honest with you, I don’t know how many different loans there are.”
Smith also was asked about a USA Today report, which detailed how he and his business partners ran into financial trouble. One partner, Louisville developer Steve Canfield, told USA Today Smith “left us holding the bag in a lot of ways.”
“Well, when this is all over I could go through it with you over who held what bag,” Smith said last Thursday in response to Canfield’s comment.