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Blog: Protecting Your College Program with a Buyout Clause

As the college football bowl season comes to an end, another season begins. Not the professional football playoffs or college basketball conference play - the annual game of musical chairs in college football. The first big name to lose his job was Ralph Friedgen, who was fired by the University of Maryland after being named coach of the year in the ACC. In addition to Friedgen (his replacement is Randy Edsall, who left the University of Connecticut to accept the job), the University of Miami fired its coach, Randy Shannon, and has replaced him with Al Golden, who left Temple University. The University of Pittsburgh fired Dave Wannstedt, but as I write this, the Pitt job is still unfilled.

What is interesting about the three coaches is not that they were fired - every college coach knows that he or she will more than likely be fired at some point. What is fascinating here is that all three were fired from their alma mater after posting winning records and taking their teams to bowl games. While I know it seems that every college football team with a non-losing record goes to a bowl game - it's not the accomplishment it used to be - it is still the goal of all college teams. So, if the teams were winning and the schools were staying out of trouble with the NCAA and the police, why fire the coaches? The simple answer is money. Even though it is going to cost the schools millions of dollars to buy the coaches and their assistant coaches out of their contracts - in Friedgen's case, the University of Maryland will pay him more than $2 million - the schools, and more importantly, some of their boosters, believe that they can make even more money if their teams win a few more games. Athletic departments have a simple way to protect their schools from this high-stakes game: Make sure that any contract involving coaches includes a buyout clause. The buyout clause allows the school to remove its coach without paying the full value remaining on the contract. For example, instead of paying Friedgen more than $2 million, the University of Maryland could pay him a percentage of his salary for each of the years remaining. The buyout also works for the coach. Under contract law, Randy Edsall should not be allowed to leave for the Maryland job since he is under contact with UConn. The buyout clause in Edsall's contract with UConn will allow him to pay the school a percentage of his contract to get out of it.

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