Understanding Buyout Clauses In College Coaching Contracts

In the collegiate ranks, many coaches have buyout clauses in their contracts. Put simply, this is money the school owes the coach if they’re fired before the contract is up. For the most part, these buyouts tend to backfire on the university, with schools sometimes owing astronomical sums of money to coaches who are no longer coaching. Yet, in a cutthroat hiring process, adding a buyout can be the difference between getting the coach you want and watching them go somewhere else.

The University of Tennessee is experiencing this "buyout remorse" right now — but the university's administration has actually been smarter about it than most other schools before them. On March 25, Tennessee lost to NC State in the second round of the women's NCAA Tournament. A week later, Tennessee athletics director Danny White fired Lady Vols coach Kellie Harper after five seasons. By waiting those seven days, the university saved $1.1 million.

Harper signed a contract extension in May 2023. That extension included a buyout worth north of $3 million if she was fired before April 1. Harper would have received 100% of her compensation between the time of her firing and April 14, 2027. By waiting an extra week, Tennessee was able to slice the buyout by about a third. On April 1, Harper's buyout terms changed to 50% of her annual compensation owed through April 14, 2028. She'll still receive $2,222,916, though it's not nearly as bad as it could have been. The money will be paid out in annual installments of $550,000, with a little extra due for the first two weeks of April 2028.

After signing her initial Tennessee coaching contract in 2019, Harper received two extensions, one in 2022 and another in 2023. But she couldn't keep up the success from her earlier years, and the Lady Vols decided to head in a different direction. Harper finishes her Tennessee tenure with a 108-52 record overall and 53-24 in the SEC. She led the Lady Vols to back-to-back Sweet 16 appearances in 2022 and 2023. She also played for the university from 1995 to 1999.

Before Tennessee, Harper had head coaching gigs at Missouri State, NC State, and Western Carolina. She's likely not done coaching; if she signs with another team, that could offset some of what Tennessee owes. Even if she doesn't, it's a rare example of a school showing patience — and it was worth the wait.