- Penn State University and head football coach James Franklin have agreed to a 10 year contract extension worth a base $75 million USD.
- There are also a variety of incentive bonuses that will be paid for reaching various goals including the National Championship, Big Ten Championship and Big Ten Coach of the Year.
- Franklin has a buyout clause that would allow him to leave for another job that becomes more reasonable year by year. Penn State would owe Franklin the full annual compensation amount of $70 million USD should they fire him.
In our previous post, we talked about the contract extension that head coach James Franklin signed at Penn State. In this article, we’ll take a look at some of the numbers behind the deal. The basics are impressive enough–Franklin signed a 10 year extension for a guaranteed base $75 million USD. You don’t appreciate how one sided the contract is in Franklin’s favor until you drill down into some of the minutia. Franklin is not only making insane money, he’s got some very lucrative performance bonuses to shoot for. Most impressive are the buyout terms of the deal. Sum it all up and it could be one of the most impressive byproducts of a team-coach negotiation in college football history.
If there was a Heisman Trophy for deal making in college football it would likely go to agent Jimmy Sexton. Sexton is one of the most powerful men in college football as he represents a number of ‘A List’ coaches, not the least of which is the University of Alabama’s Nick Saban. Sexton was recently hired by James Franklin and he went to work to get his client a contract extension with a raise. It took him a couple of months to get to where we are now and I’m thinking it was by design. Sexton likely timed the process to put Franklin into the best possible negotiating position. It’s really a ‘perfect storm’ of timing and circumstance. Franklin is in demand by powerful, deep pocketed programs including USC and LSU–two jobs that could arguably be considered a ‘step up’ in prestige from Penn State.
Penn State is also seeing the reality of finding a new head coach in the current environment. Florida likely needed to move on from Dan Mullen but the problem when you fire a head coach is that you wake up the next day and have to start looking for a replacement. The nature of that process is that you often find it difficult to find–let alone hire–a coach that is better primed for success than the one he replaced. Since Urban Meyer departed as Florida head coach eleven years ago they’ve been trying find his replacement. When they hire their next head coach it’ll be their fourth permanent hire since Meyer departed. Throw in three interim head coaches and they’ve been through seven different candidates and are no closer to finding a long term head coach.
Penn State desperately doesn’t want to be in the same position. They may never get the stability and continuity they had under Joe Paterno but one key component of their ability to move on from the JoPA/Sandusky fiasco was strong leadership. Bill O’Brien and Franklin deserve a ton of credit for the program’s ability to ‘turn the page’ and rebuild from scratch. At 49, Franklin should be at the top of his game for more than a decade and that would do wonders for the program both internally and externally. If there’s a rap against Franklin it’s a perceived inability to ‘win big games’ but that notwithstanding he’s led Penn State to a 67-32 record in eight seasons, including a 2016 Big Ten championship. Put it into historical context and this is even more amazing–the thinking immediately after the Sandusky situation went down was that Penn State would struggle for years to regain a competitive level and struggle even more to rebuild their reputation. Instead, they’ve had one losing season since and that was the COVID disrupted 2020 season which almost doesn’t count.
Franklin is also a great recruiter and he was smart enough to use the new deal to give him more tools to work with. In addition to what he’s getting personally, the school has agreed to make a significant investment to upgrade the program. Here’s Franklin’s comment about his contract extension:
“Penn State’s future is bright, and I’m honored to continue to serve as your head football coach. Nine weeks ago, the administration approached me about making a long-term investment in our football program. This prompted numerous conversations outlining the resources needed to be competitive at a level that matches the expectations and history of Penn State. What’s most evident from those conversations is the importance of our student-athletes’ success both on and off the field.”
It’s the opposite of a ‘downward spiral’ (an ‘upward spiral’?). Give a strong recruiter better facilities and more resources and he can bring in better athletes. That will (in theory at least) produce more on-field success which will then translate into more elite athletes and more resources to further enhance the program. The more that this cycle continues the easier Franklin’s job as a recruiter becomes and the more attractive Penn State becomes to highly sought after recruits. We quoted Penn State athletic director Sandy Barbour in our previous article but it’s worth running his comments back again here:
“We are excited to have James Franklin lead our football program for a long time. We will continue our collective efforts to constantly improve in all aspects of our program. We have made, and will need to continue to make, significant investment in our football program because we believe we have a very bright future under James. With this contract, we are signaling our sustained commitment to being one of the premier programs in the history of college football.”
The school has put themselves in a position where they’ve agreed to sign off on anything Franklin needs to make the football program competitive. A successful football team is obviously good for Penn State so it’s not like this isn’t a prudent investment. Still, Franklin has managed to get a significant raise while simultaneously making his job easier. Here’s some of the incentives that Franklin has to shoot for–all of which theoretically become easier with the resources the school is promising to bankroll for the football program:
The contract is filled with incentives adding to the $7 million base salary and $500,000 a year retention bonus. In addition to a yearly $1 million life insurance loan, Franklin can earn an $800,000 escalator to his salary by winning a national championship. Other incentives include $350,000 for winning the Big Ten, $400,000 for earning a berth in the College Football Playoff and $100,000 for winning Big Ten Coach of the Year.
The most mind blowing component of the deal is the buyout provisions. It’s clear from the way this is structured that Penn State’s primary concern was in the short term–that Franklin would bail for USC, LSU or some other program at the end of this season. They’ve bought themselves some near term security that this won’t happen but after a few years Franklin can easily leave for any plum opportunity that presents itself. Here’s how CBS Sports writer Shehan Jeyarajah explained it:
While the contract is for 10 years, don’t expect it to keep Franklin’s name out of the rumor mill. The structure of the contract is primarily built to keep Franklin in town through the 2021 offseason.
Franklin’s buyout to leave for another job is $12 million through April 1, 2022. After April hits, the buyout immediately drops to a manageable $8 million before $6 million in 2023 and all the way down to a tiny $2 million in 2024, just three seasons from now. To the contrary, Penn State will owe Franklin the entirety of his $70 million annual compensation, even if it fires him.
The contract gives Franklin unmatched flexibility in choosing his own future. If a high-caliber job comes open, he’ll be able to leave without much issue. If his recent struggles continue, Penn State is still on the hook for $70 million. The flip side is that Penn State now no longer has to worry that it will have to fill Franklin’s job on short notice during one of the most crowded coaching searches ever.
As soon as two years from now, Franklin can walk for another job for less than a year’s salary. Of course, that doesn’t necessarily means it would come out of his pocket since any school that wanted him bad enough would pick up the expense of the buyout in the same way that Penn State scratched out a $1.5 million check to Vanderbilt in 2013. Franklin’s side of the buyout might discourage other programs from approaching him for no more than two seasons. On the other hand, Penn State has given Franklin more job security than just about any coach in college football. They are in a position where they *have* to keep Franklin happy and give him whatever resources he wants.
Franklin strikes me as a good guy so it’s not like he’s trying to scam Penn State out of $70 million. He’s not going to ‘run the program into the ground’ to try and get fired or anything of that sort. Still, it’s an amazing deal that Jimmy Sexton has negotiated for him. On top of everything, the $7.5 million a year puts Franklin right at the periphery of the 2021 ‘highest paid college football coaches’ Top 5.