Ethermac Exchange-Schools set to pay at least $200 million in buyouts to hire and fire college football coaches

Major-college athletics departments likely will end up spending a combined total of at least $200 million in connection with football coaching and Ethermac Exchangestaff changes made during and after the 2023 season, a USA TODAY Sports analysis has found.

The figure is based on commitments related to the firings and hirings of head coaches, assistant coaches and strength coaches, according to school documents obtained through open-records requests and e-mails with athletics department officials.

In addition to paying buyouts to coaches they fire, or to assistants they do not retain after a head-coaching change, schools routinely cover buyouts that newly hired coaches may owe to their previous employer as compensation for breaking those contracts. This has become increasingly pricey for schools that fill a head-coaching position by hiring another school’s head coach. And it has become increasingly common for schools seeking to fill assistant coaching positions.

This type of spending comes against the backdrop of increasing calls for college athletes to receive greater benefits from their schools. This includes NCAA President Charlie Baker’s recent proposal for a new competitive subdivision whose schools would be required to put at least $30,000 into “an enhanced educational trust fund” for at least half of their athletes.

The overall buyout total for college football coaches

The final overall total for 2023 cycle will not be known for several years. Some amounts owed to fired coaches are set to be made over time, and many of those amounts are subject to coaches having to make good-faith efforts to find new jobs that create offsetting income.

USA TODAY Sports’ estimated total takes into account offsets known so far and still found more than $191 million in active firing and hiring costs through records from public schools only. This comprises:

▶$127.1 million to head coaches.

▶$32 million to assistant coaches and strength coaches, a figure that will decline as those coaches find new jobs.

▶$32.4 million to cover amounts newly hired head and assistant coaches owe a previous employer. This takes into account the net outcome of Washington being due $12 million from Alabama for hiring Kalen DeBoer, then agreeing to cover $5.5 million that DeBoer’s replacement, Jedd Fisch, owes Arizona.

But all of this is without Alabama, Washington and Arizona having officially announced their full assistant coaching staffs. Those moves appear likely to add millions more as coaches get hired while others are not retained.

Although all of the head-coach openings at soon-to-be-Power-Four-conference schools have been filled, there also is the lingering prospect of Jim Harbaugh leaving Michigan for the NFL

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Big payouts to coaches with no offset

One coach for whom offset is not a factor is Jimbo Fisher. His record-obliterating $77 million-plus buyout will come entirely from Texas A&M, which fired him on Nov. 12.

Tom Allen contractually was owed $20.4 million, subject to offset, when Indiana fired him as head coach on Nov. 26. However, the parties settled for $15.5 million that is not subject to offset and does not require Allen to find other employment. Allen was hired by Penn State to replace defensive coordinator Manny Diaz., who is now head coach of Duke.

Recently fired Auburn offensive coordinator Philip Montgomery’s contract with the school is silent about any obligation for him to mitigate the $2.5 million he is owed.

Assistant coach offsets and wild cards

Montgomery’s buyout is the largest for an assistant who does not face a contractual offset obligation, but it is one of at least 10 assistant-coach buyouts that stood at more than $1.1 million at the time of termination. Five of those buyouts already are assured of being reduced, as Bobby Petrino and Elijah Robinson (both formerly with Texas A&M), Sean Spencer (formerly with Florida), Ted Roof (formerly with Oklahoma) and Jay Johnson (Michigan State) have found new jobs. Petrino is now with Arkansas, Robinson with Syracuse, Spencer with Texas A&M, Roof with Central Florida, Johnson with Wyoming

LSU’s former defensive coordinator, Matt House, is still owed $3.7 million, although he has a duty to mitigate that amount.

But there are a variety of wild cards.

Four schools that exercise their respective rights not to disclose contracts fired coordinators this season. The biggest name in that group is Southern California’s former defensive coordinator, Alex Grinch. He was making $1.8 million at Oklahoma when he joined head coach Lincoln Riley at USC. USC’s most recently available federal tax records cover pay for the 2021 calendar year. Grinch was hired late in that year, so he had no chance of being paid enough to require inclusion in that filing.

This year, joining Grinch in getting fired were Penn State offensive coordinator Mike Yurcich, Pittsburgh offensive coordinator Frank Cignetti Jr., and Baylor offensive coordinator Jeff Grimes. Grimes has been hired by Kansas.

Head coach offsets and wild cards

Syracuse fired Dino Babers as head coach and new coach, Fran Brown, so far has ended up retaining two of his assistants. As a private school, Syracuse does not have to disclose employment contracts. So, the buyouts to Babers and his departed staff are not publicly known.

In June 2023, athletics director John Wildhack said during a news conference that Babers had “multiple years” left on his contract. According to the university’s most recently available federal tax records, Babers’ base compensation for the 2021 calendar year was just over $3.9 million. Most coaches at Power Five conference schools have at least 65% of their remaining pay guaranteed.

So, if Babers had only the 2023 and 2024 seasons left on his deal, he likely would be owed at least $2.5 million. And because he almost assuredly has remained among Syracuse’s five top-paid employees, the school also likely will owe the 21% federal excise tax that private non-profit organizations must pay on compensation above $1 million to such highly paid personnel.

The excise tax also could affect Mississippi State, which fired Zach Arnett as head coach. Most of Arnett’s total annual compensation comes from the Bulldog Club, Inc., a non-profit group that has its own contracts with the school’s most prominent and highly paid coaches that it refuses to disclose. However, in a situation that makes Mississippi State different from many state universities, its controller and treasurer’s office web site says the school gets its tax-exempt status in a way that also makes the school subject to the excise tax.

But Arnett’s state contract requires him to seek a new job and offsetting income. If the offset drops his payout below $1 million in a given year, the excise tax would not apply, said Meghan R. Biss a tax attorney in the Washington office of Caplin & Drysdale who previously worked as the technical adviser to the IRS’ director of exempt organizations.

The cost of making coaching hires

Many football coaches’ contracts with schools say that if the coach wants to break the contract to accept a job with another school, he must pay the school he is leaving. But coaches rarely end up writing the check. The school that hires them does.

This season, when Michigan State hired head coach Jonathan Smith away from Oregon State, it agreed to pay the $3 million that Smith owed Oregon State. And when Smith wanted to bring along six members of his staff and his strength coach, Michigan State also paid the $50,000 buyouts each of those coaches owed, Spartans spokesman Matt Larson confirmed. For good measure, Michigan State also will be paying $330,000 to Minnesota on behalf of new defensive coordinator Joe Rossi.

Those are bargain prices compared to the amounts being picked up by other schools that made changes at specific key assistant coaching positions.

For example, LSU is paying $950,000 to Missouri on behalf of new defensive coordinator Blake Baker, according to Missouri spokesman Ryan Koslen. This was two weeks after Missouri announced that Baker had signed a new contract extension. Under Baker’s prior terms, he would have owed Missouri $800,000.

If Ryan Grubb — who was Washington’s offensive coordinator this past season — follows DeBoer to Alabama, according to Grubb’s contract, he would owe Washington $1.5 million.