If you watched college football on Saturday, you saw yet another series of misleading political ads urging you to call your local congressman and tell him to save college sports! The latter give the impression that women’s and Olympic sports are in trouble because having to pay athletes a salary will put their schools out of business.
On Sunday, Penn State announced it has fired 12th-year coach James Franklin, for whom they now owe a buyout of approximately $45 million.
These schools are not bankrupt. They are just extremely irresponsible lenders.
And if they find a private equity firm to come to their rescue, which the Big Ten is actively looking for, they’ll find a way to light that money on fire, too.
We’re only halfway through the 2025 regular season and it’s clear we’re headed for a full-on coaching carousel carnage. Stanford (Troy Taylor), UCLA (DeShaun Foster), Virginia Tech (Brent Pry), Oklahoma State (Mike Gundy), Arkansas (Sam Pittman), Oregon State (Trent Bray) and now Penn State have already sent their boys packing, and Florida (Billy Napier), Wisconsin (Luke Fickell) and many more are likely to come.
By the end of the year, the combined costs of these buyouts could easily exceed their total costs $200 million. Let that sink in for a moment. Supposed “higher education” institutions have managed to reward themselves into paying $200 million to people who will no longer work for them.
How much is $200 million? First, it’s enough to pay for the college scholarships of about 5,000 female and Olympic athletes.
You may be wondering: How can schools enter into these ridiculous, one-sided coaching contracts that cost more than the House salary cap ($20.5 million) to escape?
Think about the dynamics involved in those negotiations.
On one side of the table, we have an athletic director who spends 95 percent of his time on things like fundraising, marketing, facilities, answering fan emails about the long lines of concession stands, and so on. If so, they must hire or renew a highly paid football coach every four or five years, often in a span of 24 to 48 hours.
And on the other side we have Jimmy Sexton. Or Trace Armstrong. Or another super agent whose sole job is negotiating lucrative coaching contracts. It’s a bigger mismatch than Penn State-UCLA… uh, Penn State-Northwestern… uh… you know what I mean.
Franklin’s extremely one-sided contract is a perfect example of this.
Hired from Vanderbilt in 2014, Franklin completed a remarkable turnaround early in his tenure, taking the Nittany Lions from post-scandal/NCAA consent decree purgatory to a surprise Big Ten championship in his third season. He won 11 games in three of four seasons from 2016-2019 before falling to 4-5 in the COVID-19 2020 season. But Penn State started 2021 5-0, with wins over two ranked foes, jumping from No. 19 in the preseason AP Poll all the way to No. 4.
Meanwhile, on the other side of the country, USC fired Clay Helton two games into the season, sparking months of speculation about who would be the Trojans’ next coach. The resurgent Franklin appeared on every sportswriter’s candidate list.
Fast forward to the end of October. News broke that Franklin had abruptly fired his agent at the time and hired… Sexton. The man who negotiated hundreds of millions in salaries (and buyouts) for the likes of Nick Saban, Kirby Smart, Lane Kiffin and, yes, Jimbo Fisher, he of Texas A&M’s infamous, fully guaranteed $90 million contract.
Sexton took advantage of USC’s reported interest and immediately went to work behind the scenes for Franklin, a notorious complainer who had been complaining about Penn State’s facilities and other football investments for some time. I’m sure he made it clear to Penn State athletic director Sandy Barbour at the time that she had to meet his checklist, or else.
However, while they were negotiating, their 2021 season quickly imploded. Three consecutive losses in October, including the famous 20-18 nine-overtime game at Illinois, as well as a home loss to No. 6 Michigan, left PSU 7-4 entering Thanksgiving week, after which USC thought it could finally make its rent.
It was at that point that Barbour announced Franklin’s new $75 million, 10-year contract extension. Of course fully guaranteed. For a coach who, while he had accomplished a lot, had yet to reach the College Football playoffs in his eight seasons there, and who may or may not have been a flight risk. USC eventually hired Lincoln Riley.
Coaches’ salaries have obviously been going up and up for decades, but the 2021-2022 cycle reached new absurd heights. In addition to Franklin’s windfall, USC gave Oklahoma’s Riley a 10-year contract worth $110 million, and LSU gave Brian Kelly a 10-year contract worth $95 million; and most insane of all: Michigan State’s 10-year, $75 million deal for the since-fired Mel Tucker.
So far, none of the four schools have gotten the returns they were looking for.
And of course, those deals reset the market for everyone else – especially for the guaranteed money. Before Franklin, only two schools – Texas A&M (Fisher) and Auburn (Gus Malzahn) – had ever paid a buyout of more than $20 million.
According to USA Today’s coaching salary database released last week, none of the 30 highest-paid coaches in the country have a buyout of less than $20 million.
In the past we might have just rolled our eyes and exclaimed, “You idiots!” and continued. But the current college sports climate all but demands more accountability from the people making these deals.
Right now, the Big Ten’s mostly public universities are nearing a deal to take $2 billion from an outside investor (a California pension fund) in exchange for a slice of equity in what would essentially be a new shell company to house the league’s media and sponsorship operations.
The Power 4 have used the House settlement as a means to implement an arbitrary salary cap on the amount they can pay their athletes, while at the same time creating a commission that limits what other parties’ athletes can earn.
And they’re all lobbying Congress to pass the SCORE Act, which would give them an antitrust exemption to avoid being sued for limiting what the athletes can earn. At this point, we have not heard of any movement to subject coaching contracts to a NIL Go type mechanism.
Probably because they would all be declared above market value.
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