The Importance of the Buyout for College Football Coaches

When the University of Nebraska hired Scott Frost, an alumnus and standout football player, as the head football coach ahead of the 2018 season, the school thought he would be the program’s saving grace. After all, Frost was a significant part of the Cornhuskers’ prominence in the 1990s; he was the quarterback on the team that shared the national championship in 1997. However, his time as a coach was less successful than his playing days.

Frost was fired three games into the Cornhuskers’ 2022 season, ending with a 16-31 record in his less-than-five-year tenure. He had four years remaining on his contract, meaning Nebraska owed him a $15 million buyout. If the program had waited until Oct. 1 to fire Frost, it would have saved $7.5 million in buyout money, per Frost’s contract. Instead, Nebraska fired him the morning after a disappointing loss to Georgia Southern on Sept. 10.

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Buyouts are a major aspect of coaching contracts in today’s college football landscape. They dictate how much a coach should receive when fired without cause (if a coach is fired for cause, the contract—and thus the buyout—is canceled) yet also protect the university from losing the coach to a different university or professional team. Because of that, buyout money needs to be emphasized more in contract negotiations between the athletic director and the coach’s representation. Specifically, universities need to structure the contract so that when a coach leaves for another job, the university would receive more money than in years’ past.

Where does this large amount of buyout money come from? To put it simply: boosters. Boosters are major donators and fundraisers who finance and account for most of a university athletics program’s budget. While a lot of money comes from other sources of income such as conference payouts, postseason participation and success and broadcast money, boosters can act fast and round up their assets faster than those other sources.

While the buyout money weighs largely in favor of the coach, it could help the university as well. For example, Frost was hired by Nebraska while he was the head football coach at the University of Central Florida, a smaller university and football program. UCF received money from Nebraska when Frost was hired away; in turn, UCF used that money to hire Josh Heupel, who was then bought out when he was hired at the University of Tennessee. When a coach gets fired, he receives the buyout, but when the coach gets hired to go to a different university, the university receives the buyout.

Buyouts can also be a detriment to the university involved. For example, Nebraska has paid roughly $50 million in buyout money since 2005. Having to pay large buyouts hampers the university further by not allowing them to use their fundraised money to upgrade facilities or to spend on its academic programs.

In the future, we could see higher buyouts when a coach is hired by another team to protect the university—but with that comes a higher buyout for the coach when fired without cause. It’s a double-edged sword, but one that may be necessary as coaches are changing jobs rapidly.

John Lloyd is a graduate of the University of Idaho College of Law where he received a Juris Doctor with an emphasis in entrepreneurship and sports law. He is currently working on his master’s degree in Sports Administration with an emphasis in law from the University of Florida.

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