Take note LSU: Penn State & Franklin negotiated his buyout down to $9m from $49m

Wrong board. /s

Well he took another job, so...

We need ucla to hire Kelly

BK isnt looking very hard

I would have taken the 49 million and never coached again

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I would have taken the 49 million and never coached again

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The BK plan

I don't think LSU will get a similar deal because I think Kelly is finished coaching.

No one is hiring BK

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It's called a mitigation clause. Franklin getting the VTech job dropped the $49M down significantly.

If they settled at $9M then his contract with VTech is probably somewhere in the $35M range

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Exactly.

I don’t know the exact details of his Penn State buyout, other than that it’s ~$49 million over 6 years. Let’s assume it’s paid in equal monthly installments. At 6% return, PV is ~$42.3M.

If his Va Tech contract is, say, $7M per year over 5 years, it means Penn State is only on the hook for ~$1.2M/year for the next 5 years and is technically on the hook for the full $8.2M in year 6 if he doesn’t get renewed.

In that case, PV of his Penn State buyout is only ~$10.9 million. If he doesn’t get a renewal or another job after year 5, Penn State “won” to the tune of $2 million PV. If he gets renewed and makes it 6 years, Penn State lost. If his contract turns out to be $8m/year instead of $7m/year, Penn State lost.

I laugh a bit at how people keep talking about a “mutually beneficial” lump sum because in reality it’s basically a zero-sum game. It might seem mutually beneficial at first based on each party’s risk tolerance etc. but in the end someone will win and someone will lose. It’s entirely possible that Penn State would have been better off not negotiating at all.

The difference for us is that there’s no guarantee Kelly will actually go get another P4 coaching job.

That’s because Virginia Tech was stupid enough to give him another job. No one‘s dumb enough to give Kelly another chance.