The college football season is in full swing, marked by the release of the first CFP rankings on November 4, 2025. As has become more commonplace in the “win now” culture, major college football coaches have already been terminated and major head football coaching jobs are available at Auburn, Florida, LSU, Penn State, and many more. These terminations are “without cause” requiring payment of contractual liquidated damages. The contractual liquidated damages provisions sometimes produce buyouts in excess of $50 million. Not too far in the past, there was public outcry over buyouts in the $10 million range.
Although the negotiated liquidated damages provisions in coaching contracts now often produce buyout figures in excess of $50 million, it does not necessarily mean that colleges and universities will actually pay $50 million. These amounts can be heavily reduced or completely nullified due to mitigation and offset provisions in the coaching contracts. For example, Brian Kelly’s coaching contract, at Schedule A in the Supplemental Terms, there is a provision titled “Duty to Mitigate” that states as follows:
Duty to Mitigate. In the event of termination by LSU without cause, the amount of liquidated damages owed by LSU under this Section shall be reduced and extinguished by and to the extent of any compensation Employee earns, receives, or is entitled to receive for football-related employment, whether intercollegiate or professional, including coaching, administration or media, from any third party from the termination date until LSU's obligation pursuant to this Section to Employee terminates or ceases to exist. Employee shall exercise due diligence and good faith in seeking qualifying employment so long as the liquidated damage obligation exists. In the event Employee obtains such other employment, Employee must notify LSU and provide documentation reasonably requested by LSU to determine the amount of compensation received by Employee and the amount of offset due to LSU.
Although the provision is titled “Duty to Mitigate”, the provision is both a mitigation and offset (sometimes also referred to as “set off”) provision. A mitigation provision requires a terminated employee to comply with a duty to mitigate his damages by making a good faith effort to obtain and retain similar employment by using reasonable diligence in seeking other employment to reduce losses. Mitigation does not require that a coach seek and obtain identical employment. As noted in Brian Kelly’s contract, he is required to seek “football-related employment” at the “intercollegiate or professional” level and also includes administration (i.e., general manager, athletic director, etc.) and media (i.e., color commentator, pre-game or halftime show hosts, etc.) employment. If the coach fails or refuses to seek and obtain employment in good faith, the college and university can argue that the buyout provision is terminated and cease payment.
Although offset (or “set off”) is similar and often coupled with a duty to mitigate, the provisions are different. An offset (or “set off”) provision allows the college or university to reduce or withhold payments owed to the coach in the amount the coach receives through subsequent employment. For example, if a coach is owed $10 million annually under the terms of the liquidated damages provision in his contract and receives compensation of $5 million annually from his subsequent employer, then the college or university would owe $5 million annually (i.e., $10 million – $5 million = $5 million).
Both provisions require the parties to stay in contact and report to one another as specified in the contract. Oftentimes, employment agreements will have provisions that require reporting quarterly or bi-annually regarding efforts to seek and obtain employment and amounts received. If the former employee fails to do so (depending on the terms of the contract), the employer may terminate the obligations under the liquidated damages provision.
For any questions, feel free to contact Christian Dennie at cdennie@denniefirm.com.
