The 2025 college football season’s headlines were dominated by the firing of several prominent head coaches. Power-conference schools owed almost $170 million in buyouts, which are “the liquidated damages stipulated in a coach’s contract if they are fired ‘without cause,’” to coaches that were released. The multibillion-dollar college football industry has forced universities and athletic departments to gamble by offering coaches unbelievable amounts of money, specifically to attract the most talented coaches in hopes of improving their program. The “coaching carousel,” the group of fired coaches now looking for new positions, included coaches like Penn State’s James Franklin, LSU’s Brian Kelly, Florida’s Billy Napier, UCLA’s DeShaun Foster, and several other power-conference coaches. These multimillion-dollar buyouts ranged from $6 million to over $50 million, and many included a portion of the coach’s future contract earnings. Fans, schools, donors, and boosters all question where the money will come from to pay the buyouts. Because there are legal barriers preventing salary caps for these coaches, restructuring coaching contracts to avoid these buyout problems may be the solution.
Play Calling: Current Structure of Head Football Coaching Contracts
The current structure of most coaching contracts leaves schools on the hook for millions of dollars after firing coaches without cause. Many contracts guarantee at least 85% of the remaining money on their multi-year contracts if they’re fired, while other contracts are sometimes fully guaranteed. For coaches like Georgia’s Kirby Smart and Clemson’s Dabo Swinney who have fully guaranteed contracts, these coaches would receive at least $50 million if they were fired, but only owe as little as $5 million and $3 million to their respective schools if they left for another job. With millions of dollars guaranteed when fired, coaches have little incentive to perform well because losing may still result in a hefty payout reward. As fully, or nearly fully, guaranteed contracts remain the trend for coaches, athletic departments will continue to owe millions of dollars when terminating coaches without cause.
Rules of the Game: Legal History of NCAA Salary Caps
Coaching salary caps seem like they would provide a reasonable solution to this buyout problem, but a 1998 U.S. Court of Appeals decision ruled that such caps are antitrust violations. In Law v. NCAA, as part of a cost-reduction strategy, the NCAA implemented a rule that capped the compensation of certain Division I entry-level basketball coaches. Affected coaches filed a class-action suit alleging this rule violated the Sherman Anti-Trust Act. The Court of Appeals in Law stated that “[u]nder a quick look rule of reason analysis, anticompetitive effect is established, even without a determination of the relevant market, where the plaintiff shows that a horizontal agreement to fix prices exists, that the agreement is effective, and that the price set by such an agreement is more favorable to the defendant than otherwise would have resulted from the operation of market forces.” The court ultimately found that the rule for capping compensation for restricted-earnings coaches was an illegal restraint on trade. The NCAA’s justifications for the rule did not outweigh its anticompetitive effects. Because of this ruling, the NCAA imposing a national salary cap is not a viable legal solution to the current coaching contract dilemma that athletic departments are facing.
Home Field Advantage: Restructuring Contracts to Safeguard Athletic Departments
Because capping salaries isn’t a viable legal option to remedy the buyout problem, athletic departments should consider restructuring contracts to avoid having to pay millions of dollars when firing coaches. As of now, some coaches’ contracts are structured with clauses that prevent schools from owing the entirety of the rest of their contracts when fired without cause. Implementing these clauses more extensively during negotiations could be the solution.
Current contract structures provide little repercussions for bad performance. Implementing contracts that are more performance-based would ensure that coaches are not rewarded when they do not reach program expectations. For example, LSU’s ex-head coach Brian Kelly’s contract included bonuses for post-season appearances and awards like SEC Championship appearance, College Football Playoff appearance, and SEC Coach of the Year. Extending this incentive-based compensation to regular season records would prevent coaches from benefitting from being fired after performing poorly or not meeting agreed-upon expectations.
Another major adjustment to contracts should be adding duty to mitigate clauses. In contract law, under these clauses, there is an obligation for the injured party to take measures to keep incurred damages at the lowest possible level. Duty to mitigate clauses prevent injured parties from recovering or accumulating damages that could have been avoided. Here, coaches are considered the injured party, while schools are considered the injuring party. These clauses state that coaches are required to look for other high-profile jobs in coaching or media once fired. The school then only owes the difference between the new salary and the buyout. Many schools already have these clauses, but the schools that do not are responsible for the full buyout. For example, Brian Kelly’s contract states that if fired without cause, he must “exercise due diligence and good faith in seeking qualifying employment so long as the liquidated damage obligation exists.” Adding duty to mitigate clauses to all coaching contracts would ensure that schools do not have to pay the full amount of buyouts when coaches are fired.
Contracts should also add clauses that allow buyouts to be paid in installments, rather than lump sum payments up front once fired. For example, Kelly’s contract states that he will be paid in equal monthly installments if terminated without cause, while Florida’s Billy Napier’s contract stated that he would receive $10 million within 30 days of his termination and the remaining $10 million would be owed in three yearly installments. Napier’s contract did not include a duty to mitigate clause, meaning Florida does owe the full $20 million left on his contract. Adding clauses that state that buyouts will be paid in installments would create less of a burden at once on athletic departments who are tasked with paying buyouts. These clauses would also likely result in coaches and schools negotiating smaller buyouts over shorter periods of time.
Show Me the Money: Resetting Coaching Contract Standards
When athletic departments are suddenly on the hook for large buyouts, further legal issues arise. After failed negotiations to settle for a lower buyout amount, LSU ex-head coach Brian Kelly filed a lawsuit against the school, seeking confirmation that he was fired without cause and entitled to the full buyout amount he was owed. The school eventually agreed to the full amount of $54 million, and the lawsuit is expected to be dismissed. More clear cut contracts that lessen the burden on athletic departments could avoid these disputes that rise from multimillion dollar buyouts.
With NIL and revenue sharing increasing, coaching buyouts add yet another potential financial burden on athletic departments, donors, and boosters. Without revisions to how these contracts are negotiated, athletic departments will continue to suffer when firing coaches, especially if coaches aren’t incentivized to perform well. Additionally, when athletic departments suddenly owe millions of dollars to terminated coaches, other legal battles between coaches and schools may materialize. Restructuring contracts may be the only way to save athletic departments millions and avoid adding more coaches to the coaching carousel.