(WKYT) – The University of Kentucky’s total cost to hire former Michigan State athletics director J Batt could exceed $7 million, according to a binding term sheet reviewed by WKYT.
UK previously agreed to pay Batt’s $5 million buyout to Michigan State University. Earlier reporting indicated UK had agreed to pay $2.5 million of that buyout after Michigan State’s president decided to remain in Lansing rather than take a new position at Clemson.
What the term sheet says
The binding term sheet is pre-contract paperwork that lists the terms of the agreement without a specific start date. In the section outlining benefits for the new CEO/AD, the document addresses the buyout owed to Michigan State.
The term sheet states the payment will be made in a manner “so that it is tax neutral to CEO/AD,” with terms and conditions of payment to be mutually agreed upon.
What ‘tax neutral’ means for UK’s bottom line
A tax-neutral arrangement means Batt would not pay any new or additional taxes on his Michigan State contractual buyout obligation. The University of Kentucky would take on that additional expense.
The final cost to UK is not yet known, as the term sheet is not a final, signed contract. Two financial planners consulted by WKYT each estimated the tax-related costs at more than $2 million.