Inside Brian Kelly’s $54 Million LSU Buyout
Brian Kelly just made $54 million by getting fired. Today's newsletter takes you inside the contract clauses, donor funding, and economics fueling college football’s most expensive mistakes.
Less than four years after signing a 10-year, $95 million deal to leave Notre Dame for LSU, head coach Brian Kelly has been fired. Kelly is now the eighth coach to be fired before November this season, the most early-season firings in college football history.
LSU has obviously underperformed on the field, and plenty of people are using the firing to take shots at Kelly, both personally and professionally. But I don’t really want to talk about what Kelly did on the field; I want to talk about the money off the field.
According to the 23-page contract that Brian Kelly signed with LSU in 2021, Kelly is owed 90% of his base salary and supplemental compensation. Given that Kelly still has more than 6 years left on his deal, LSU will now have to pay its former coach about $54 million to leave the school. Kelly’s salary is also paid in monthly installments, meaning Kelly will receive a direct deposit of nearly $800,000 every month for 6+ years.
This is the second-largest buyout in college football history, sandwiched between the $49 million that Penn State just agreed to pay James Franklin and the $77 million that Texas A&M is still paying Jimbo Fisher. But Kelly’s buyout is especially interesting because many people are already saying that LSU won’t have to pay the full amount.
The reasoning behind this opinion is simple: Kelly’s contract contains a “Duty to Mitigate” clause. This clause explicitly requires Kelly to “exercise due diligence and good faith in seeking qualifying employment so long as the liquidated damage obligation exists.” Or, in simple terms, Kelly has to look for another job, and any money that he gets paid from that job would then be used to reduce LSU’s payment.
For example, if Brian Kelly signs a 5-year, $25 million deal at another school, his buyout at LSU would be reduced from $54 million to $29 million. These are just easy numbers to use as an example, but you get the point. Kelly must look for another job, and every dollar that he earns from that job is one less dollar LSU is required to pay.
But secondly, we also need to consider the time value of money. Since Kelly’s $54 million buyout is scheduled to be paid in monthly installments over the next 6+ years, many people assume he would be willing to accept a smaller upfront amount, with the idea being that money today is better than money tomorrow. This would also allow for a cleaner divorce, and then Kelly can try to maximize his earnings at his next job.
However, after reading through the contract and looking back at past precedent, I am not sure LSU is going to get much (if any) relief here. For starters, Kelly is contractually owed the money. The contract is simple. There is no gray area or workarounds. The only way that LSU can reduce the buyout is if 1) Kelly finds another job or 2) Kelly signs a supplemental agreement with LSU to reduce the final amount.
