Southeastern University is excited about the prospect of hiring Coach Reynolds as its new football coach. The parties have agreed in principle that he will be the new coach, but have to work out the details of his contract. You represent the Coach.

I have met with Coach Reynolds and discussed what he wants from the negotiation. Here are some key points from our discussion:

• In his previous five-year contract at Midwest U., Coach Reynolds made an annual salary of $800,000 and his total package was worth approximately $950,000 a year. His only perquisites (other than basic health and life insurance) were a weekly TV/radio show during the football season, a summer football camp, and use of a Ford Explorer.
• Midwest U. would be happy for Reynolds to continue in his current position and has offered him a new five-year contract with an annual salary of $900,000. Reynolds, however, is ready to move up in the world and is not excited about the prospect of continuing at Midwest, but would do so as a last option.
• Given both his success at Midwest U and the fact that Southeastern is in a better conference that Midwest U, Reynolds hopes to raise the level of his financial package significantly. Southeastern's conference, the Big 7, is very similar to the Pac-12 and the ACC.
• In light of the ages of his children and his large family, Reynolds also is keen on securing a large percentage of his income and perquisites as guaranteed. This is particularly true because the lack of quality talent on the football team currently at Southeastern may make it difficult for Reynolds to meet certain performance levels in the first couple of years at Southeastern.
• Reynolds also wants to retain flexibility to leave should a better offer come open during the term of his contract.
• While perquisites and performance bonuses are nice, Reynolds is interested in maximizing his base salary, as he is a simple man and prefers guaranteed cash.
• Most of all, we want to make sure that we are able to finalize the deal with Southeastern, as Reynolds does not want to return to Midwest U. This must be done as soon as possible as the State of Southeastern is scheduled to release its annual economic outlook on Thursday at 7:00 p.m. Through very confidential information that has not been made available to Southeastern, we have found out that the State will announce a 5% budget cut for next year. If Reynolds has not signed the contract by then, the University may not be able to offer as large of a salary package.
• You have the authority to enter into the contract on behalf of the Coach Reynolds. Please close the deal in accordance with his interests on as favorable terms as possible.

Southeastern University is excited about the prospect of hiring Coach Reynolds as its new football coach. The parties have agreed in principle that he will be the new coach, but have to work out the details of his contract. You represent the University.

I have met with the President and discussed what she wants from the negotiation. Here are some key points from our discussion:

• Retiring Coach Vaught made approximately $2,000,000 per year, with $1,500,000 in base salary and $500,000 in perquisites. These included a country club membership, use of two cars from the Chevrolet dealership, a summer football camp, TV/radio show, uniform/clothing contracts, shoe/equipment contracts, apparel contracts, and merchandising contracts.
• Of the $500,000 in perquisites, the University only guaranteed $100,000. Given that Coach Vaught had a longstanding successful relationship with the community, it is likely that these contracts will not be as lucrative in the short term (2-3 years), until Coach Reynolds proves himself. We estimate that the Value of perquisites from boosters will be closer to $250,000 initially. In terms of bonuses, Southeastern has a policy that bonuses, including performance-based bonuses, cannot exceed 10% of the base salary in a given year.
• As ticket sales and alumni contributions are essential to the university, we try to keep close tabs on the sentiments of our fan base. Currently, there are two concerns about hiring Coach Reynolds. First, the alumni are concerned that he does not have long term plans to stay here, and, if he jumps to another school, he will disrupt both the continuity of the program and injure its overall prestige. On the other hand, the alumni are concerned about his ability to succeed in the Big 7, as Midwest U does not face the same caliber of opponents that Southeastern does.
• For your information, the average coach in the Big 7 makes $3.1 million a year, with the average base salary being around $2,500,000. We have been able to pay Coach Vaught less because of his loyalty to the University and the extra income that he has been able to make through perquisites. The Big 7 is comparable to the ACC or the Pac-12 conferences.
• Despite the public perception that Southeastern has been hurt by the downturn in the economy, the University's financial picture is quite rosy given the decision of the financial managers to sell all of our stock holdings last summer. The University's budget will not be affected by any potential cuts to be imposed by the state legislature. The University, however, wants to avoid giving too large of a base salary to Coach Reynolds, as it may send the wrong message in the current economic climate.

Most of all, we want to make sure that we are able to finalize the deal with Coach Reynolds, as his hiring was inadvertently leaked to the media last week. This must be done as soon as possible as we have received word that a more prominent SEC school will announce Thursday at 10:00 a.m. that they have fired their football coach. If Reynolds has not signed the contract by then, he will certainly try to get that job and leave us both without a coach and with some really upset alumni. You have the authority to enter into the contract on behalf of the University. Please close the deal in accordance with our interests on as favorable terms as possible.

Can you help me negotiate a deal for this problem?