What's Happening?
Penn State University recently terminated its head football coach, James Franklin, resulting in a substantial buyout obligation of nearly $50 million. This buyout is one of the largest in college sports history. However, the financial burden on Penn State could be alleviated if Franklin secures a new job soon. According to the terms of his contract extension from 2021, any salary Franklin earns from a new position will offset the buyout amount. Franklin is required to actively seek employment in coaching, scouting, or broadcasting, and to provide evidence of his job search efforts. If Franklin's new salary exceeds the buyout terms, Penn State may not owe him anything, and he might even have to reimburse the university for any payments already made.
Why It's Important?
The financial implications of Franklin's buyout are significant for Penn State, especially amid a $700 million renovation of Beaver Stadium. The university's athletic department is responsible for covering the costs, and potential funding sources include a payout from a Big Ten private-capital deal. The situation highlights the financial pressures faced by college sports programs, particularly when dealing with high-profile coaching contracts. The outcome of Franklin's job search could have a substantial impact on Penn State's financial planning and resource allocation.
What's Next?
Franklin's future employment prospects are uncertain, but there are several openings across major college football programs, including Arkansas, Oklahoma State, UCLA, and Virginia Tech. The resolution of Franklin's buyout will depend on his ability to secure a new position and the salary he negotiates. Penn State's athletic director has stated that the department will handle the costs internally, but the financial strategy for managing the buyout remains unclear.
