After abruptly firing James Franklin on Sunday, Penn State owes the former head football coach close to $50 million in buyout money. It’s among the largest buyouts in the history of college sports.
But if Franklin gets a new job soon, that number could significantly diminish. In fact, Penn State may not owe him anything at all.
Franklin and Penn State could have negotiated a settlement after his firing, but the terms of his 2021 contract extension, obtained by Front Office Sports, read: “Should Coach obtain such applicable employment prior to the date this Contract would otherwise have expired, the University’s obligation to make payments to Coach … will be offset by the total compensation earned by Coach from such applicable new position through the end of the otherwise unexpired term of this agreement.”
In other words, whatever new salary he receives from his next job will offset what Penn State owes him in a buyout. And Franklin is obligated to search for a new job, according to the deal. That language, known as “duty to mitigate,” states: “Once terminated, Coach is obligated to diligently search for and make a good faith effort to obtain another position appropriate for his skill set (i.e., coaching, scouting and broadcasting only) and to provide the university upon request with evidence that he is seeking such employment.” Franklin is also required “to make good faith efforts to obtain the maximum reasonable salary” at his new job.
Some of the terms of Franklin’s buyout were previously reported by On3.
Franklin’s buyout consists of his base salary of $500,000 per year, additional compensation of $6.5 million per year, and $1 million per year life insurance policy coverage between now and the end of the 2031 season, when his deal would have expired, according to the contract. That amounts to about $48 million.
He’s also owed the rest of that money for this year, bringing the total number to somewhere between $48 million and $50 million.
But if Franklin gets a new job between now and the end of the contract—whether in coaching or broadcasting—his new salary will offset the buyout. In other words, Penn State will have to pay him only the difference between his new salary and the amount of the buyout. If he gets another salary worth more than the terms of the buyout, Penn State owes him nothing. Franklin may even have to reimburse them if payments have already been made, the contract says.
If the Nittany Lions aren’t so lucky, they’ll have to cough up tens of millions in cash—and it’s unclear at this point how they will fund the buyout amid a $700 million renovation of Beaver Stadium.
One report suggested Adidas, the program’s incoming apparel sponsor, would help bankroll the buyout. Penn State vehemently denied this in a statement to FOS. A payout from a Big Ten private-capital deal involving a California pension fund could potentially help fund any potential buyout as well.
Athletic director Patrick Kraft declined to comment on specifics during a press conference Monday. “This is an athletics issue, this is not the institution’s issue,” he said. “We in athletics are covering all the costs.”
While it’s unclear where Franklin will land, there are currently plenty of openings across the Power 4. In the past month, Arkansas, Oklahoma State, UCLA, and Virginia Tech have all fired their head coaches.
