Jim Harbaugh's contract as the head coach of Michigan has been strange from the very beginning. The former San Francisco 49ers head coach famously agreed to a contract that was (slightly) below market value in order to return to his alma mater, but now, it appears that Michigan is making him whole again as part of a new contract addendum signed in June.
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Nick Baumgardner of MLive.com brings the details:
Michigan and Jim Harbaugh signed an additional compensation package earlier this summer that will net the head coach $2 million per year throughout the remainder of his contract with the university.
The additional payments will be made by Michigan in the form of a life insurance policy. The university will pay a premium of $2 million to Harbaugh's chosen insurance company until his original deal expires in 2021.
A $2 million per year "raise" will get the headlines here, but Harbaugh's compensation being this directly tied to a life insurance policy is a bit strange. While the school will reportedly stop paying on the policy if Harbaugh leaves (or is terminated), Harbaugh can take money out as the chief owner of said policy.
Beyond that, this new deal could have a ripple effect across the college football landscape, as it seems as if Harbaugh will be the country's highest-paid coach this season (also from MLive.com):
In addition, the addendum states that Michigan was required to pay $2 million into the policy on the date the deal was signed in June. So, if Harbaugh's still Michigan's head coach Dec. 6, he'll be compensated at least $9 million in 2016 — which would be more than any head coach in the country.
Any Michigan fan will tell you that Jim Harbaugh has been worth every penny, so the new contract will not be controversial in Ann Arbor. Nationally, though, heads will begin to turn if the Wolverines do not enjoy the success that many project during the upcoming season.
