Understanding Coach Buyout Article posted on June 2, 2011

Win AD includes more than 21,000 coaches. With more than 20% of Division 1-A football Head Coaches being replaced each season (for various reasons), we reviewed contract language to benchmark buyout clauses. Here’s what we found:

  1. Of those coaches whose buyout clauses went into effect when they were dismissed in the 2010 or 2011 seasons, 70% of them had buyouts based on their remaining full or base salary.
    1. 40% were guaranteed all their remaining total salary
    2. 30% were guaranteed all their remaining base salary
  2. The other 30% were made up of a combination of considerations, including:
    1. A certain amount per month(s) or year(s) remaining on contract
    2. A percent of remaining base salary
    3. Total salary equal to one year (no matter how many years left on contract)
    4. Base salary equal to one year (prorated if less than one year left on contract)
  3. There was a pretty strong correlation between the amount of a head coaches’ full salary and the percentage of that full salary made up by a base salary, (the higher the full, the less it was made up of base). But we didn’t find any correlation at all between the amount of salary, full or base, and the type of buyout, meaning that the type of buyout employed is probably the result of the preference of the AD, head coach, or both.