Big Bucks, Big Buyouts: Severance payments to football coaches who haven’t won enough now top $1 billion in the past two decades

By Jill Riepenhoff, Nic Napier and Nadia Scharf

(InvestigateTV) — Officials at the University of Houston were so pleased with their football team’s 12-2 record in 2021 that they awarded its head coach a handsome new contract that would keep him on the field through 2027.

Two years later they were eager to get him off their sidelines, no matter the cost.

On Nov. 26, Houston fired Dana Holgorsen after the Cougars struggled to compete in their new conference, the Big 12, and ended the season with four wins and eight losses.

Houston will be paying Holgorsen $14.5 million not to coach.

He is one of nine head football coaches that public universities ditched during or after the 2023 regular season because they didn’t win enough.

The fallout is a hefty sum — a combined $120 million — that public universities will pay out in the name of amateur athletics.

The moves follow massive buyouts made last year to 13 head football coaches for a total of more than $76 million, and the $63 million that was paid to 21 coaches the year before that.

All told, the public universities that make up the Football Bowl Subdivision (FBS) of Division I athletics have paid at least $1 billion over the past 20 years to part ways with football coaches with lackluster records.

“It’s pretty ludicrous,” said B. David Ridpath, a professor of sports management at Ohio University and a member of the Drake Group, which has advocated for reforms to out-of-control athletic spending for decades.

“This is essentially middle management at a university. Right? This is not the president. This is not the provost. This is not the athletic director or dean,” he said. “This is a football coach who really had at best as middle management but has become the highest paid employee in the state.”

This year, the mid-season dismissal of Texas A&M football coach Jimbo Fisher dropped jaws when his firing came with a $76 million price tag.

School officials said that they will pay Fisher from its athletic funds and with financial help from its athletic foundation.

For Ridpath, it doesn’t matter what the source of the money is, he said, because all money becomes university money once it hits the coffers.

“It’s more of a sleight of hand to say, ‘Hey, we’re not paying any institutional funds, we’re using donor money,’” he said, “but that donor money is technically still institutional funds.”

‘These institutions are allowed to act like Mr. Monopoly’

Fisher’s buyout alone could fund the entire athletics budgets of 68 FBS programs — at schools such as Colorado, Iowa, Oklahoma State and UCLA — according to InvestigateTV analysis of the Knight-Newhouse College Athletics Database at Syracuse University.

The amount of his buyout also could cover a year of in-state tuition for about 2,400 undergraduates to attend Texas A&M.

The contract that Texas A&M gave Fisher is “the height of fiscal irresponsibility and a failure of fiduciary duty,” said Len Elmore, co-chairman of the Knight Commission on Intercollegiate Athletics.

“Like public companies, where the board of directors and management owe a fiduciary duty to act in the best interests of shareholders, these public institutions owe the same duty to state taxpayers and students and have breached that trust,” he said. “But unlike public companies who would be on the receiving end of a derivative lawsuit, these institutions are allowed to act like Mr. Monopoly and spend recklessly with other people’s money.”

A 2022 InvestigateTV report showed that since the fall of 2004, Division I public universities have paid out more than $1.1 billion — or $1.3 billion in 2024 dollars accounting for inflation — to hundreds of coaches across all sports who were let go, largely, because their teams did not win enough.

Of that money, a majority — 75% of it — has gone into the pockets of football coaches who played in the FBS, which includes schools that make up the five power conferences: ACC, SEC, Big 10, Big 12 and the PAC-12; as well as Notre Dame and schools that belong to the lower-profile conferences, such as the MAC and Sun Belt.

Now, thanks to the latest buyouts, football alone tops $1 billion.

Some coaches have 100% money back guarantee, regardless of future employment

Critics of big-time athletic department spending such as the Drake Group and the Knight Commission say that each year, the contracts awarded to head coaches carry head-scratching provisions.

Fisher, for example, is one of at least 14 head coaches with contracts guaranteeing they will be paid all of their base and supplementary salary through the end of the contract. Among those with the 100% guarantee are Jim Harbaugh at Michigan, Lane Kiffin at Ole Miss, and James Franklin at Penn State.

At least six other head coaches have contracts this year that promise to pay them 100% of their base salary through the end of the contract, including fired Middle Tennessee State University head coach Rick Stockstill, who, according to ESPN will collect $5 million.

Those provisions mean that even if those coaches are fired, they still receive a paycheck as if they were still on the sideline until the contract expires.

One of the winningest coaches in college football, however, does not have a 100% guarantee. If the University of Alabama decided to dismiss Nick Saban, he only would collect 2 years’ worth of salary totaling about $46 million.

Unlike his predecessor, Texas A&M’s new head football coach Mike Elko also does not have a 100% guarantee in his contract, which actually includes a mitigation clause that reduces the amount of the buyout based on his salary at his next job.

Elko will be paid $7 million a year, according to a term sheet released by the school and shared on social media by The Athletic.

Elmore said that the money that followed the creation of the televised College Football Playoff in 2015 created the “fiscal boon.”

Prior to the CFP, the total severance for head and assistant football coaches was about $32 million, or $41 million in today’s dollars — more than half of what was paid to a single coach this year.

“It appears that when more money is available, more money is irresponsibly thrown at coaches,” Elmore said. “If the FBS (and CFP) adhered to the core institutional mission of college sports — connect revenue to athletes’ education, health, safety and success — schools would prioritize the spending to address the shortcomings contained within that core mission.”

He said athletics departments struggle with gender and racial equity as well as making sure athletes have meaningful access to healthcare and mental health resources.

The “fiscally dysfunctional several payments to dismissed Power 5 football head coaches” could make a serious dent in addressing those long-standing problems, he said.

Since 2021, Elmore said the Knight Commission has been imploring universities to make systemic changes by, among other things, increasing financial transparency and adhering to other core missions that are for the greater good of all athletes — not just those in revenue-generating sports.

“These students must stand-up and speak-up for the increase in education, health and well-being benefits to be derived by a reallocation of resources and revenue that would occur with money freed from the ‘dead money’ held ransom by ill-advised contract obligations to many fired coaches,” he said.

Small successes sometimes lead to big deals

Texas A&M now assumes the No. 1 spot for the highest amount of so-called “dead money” or severance payments made to football coaches in the past 18 years: more than $87 million.

Auburn University falls to second place, with $53.4 million paid out to football coaches who didn’t win enough. That includes $21 million paid to Gus Malzhan at the end of the 2020-21 season and $15.3 million paid to his successor, Bryan Harsin, who was fired midway through the 2022 season.

Harsin’s record during his Auburn tenure was 9-12. His successor, Hugh Freeze, finished this season at 6-6. His buyout, should things come to it, currently stands at about $24 million.

“The numbers are, they are staggering,” Ridpath with the Drake Group said. “It’s not surprising, the way that the industry has grown and coaches basically saying, ‘Hey, if you want me you got to give me this long-term contract like (former Michigan State coach) Mel Tucker, and you if you want to get rid of me, you’ve got to give me this massive buyout.’”

One good season could lead to a massive deal such as the $95 million contract awarded to Tucker in 2021. He has since been fired for off-the-field issues.

In 2020, Indiana University made news in sports, not because of its perennially-good men’s basketball team, but because its football team finished as a ranked team, beating Big 10 powerhouses Michigan, Michigan State and Penn State.

The Hoosiers 6-2 record during the shortened COVID season was the team’s best finish since the 1960s — and coach Tom Allen scored a new contract.

But those wins came in large part thanks to quarterback Michael Penix, Jr., and when the star player got injured, losses mounted. Then Penix transferred to Washington, where he shined as one of the best college-level quarterbacks this past season while the Hoosiers won just three games.

Indiana dismissed Allen on Nov. 26, and using money from athletic departments donors the school will pay him $15.5 million not to coach the Hoosiers.

It’s the second highest severance payment made this season to sideline a coach with too few wins — but a big buyout.

“The school panicked and thought, ‘We might lose him,’” Ridpath said of the prior contract increase. “But if you look at reality, Indiana has not had sustained success in football for 50 years, and likely never will.”

From gridiron glory to a big buyout

Even before Indiana lost to rival Purdue on Nov. 26, fans began speculating about Allen’s future on social media.

Every year since the magical 2020 season had been worse than the one before.

For Elias Khoury, a junior IU student and staff writer, the buyout is a positive sign.

Regardless of the culture Allen was known for, such as the team’s mantra “Love Each Other,” or “LEO,” Khoury said the coach’s departure is better for the future of IU football.

“It was really nice to see that the program actually cares about winning, because if they only cared about culture, they would have kept Tom Allen,” he said. “It was nice to see that they wanted to at least be on an upward trajectory.”

Khoury said he supported the buyout, in part, because of Allen’s contract structure.

Allen was contracted for four more years, receiving $4.9 million per year on average. That adds up to nearly $20 million — the size of Allen’s original buyout before it was negotiated down, meaning Allen would have received a multi-million dollar check at the end of his time at IU regardless of how long he stayed.

Instead, Allen and the university agreed to the lesser $15.5 million deal.

“They paid too much money for somebody who had had limited success,” Khoury said. “This all could have been avoided.”

Nic Napier and Nadia Scharf are students with the Arnolt Center for Investigative Journalism at Indiana University.