The long-term viability of the Mike Woodson era as head coach at Indiana has been a popular topic over the last year.
And that brings about the understandable question — what are the terms of Woodson’s contract buyout should Indiana decide to make a change after this season, or sooner? And would those contractual requirements play any meaningful role in the decision-making process to retain or fire the fourth-year head coach?
The simple answer to the latter question is no, Woodson’s buyout arrangement does not appear likely to be a key consideration.
Woodson signed a contract amendment in August of 2023, boosting his guaranteed total compensation from about $3 million per year to $4.2 million. The new deal also guarantees to Woodson 100% of amounts owed to him under the contract if he was fired at the end of this season or sooner.
The 2023 amendment did not add years to Woodson’s original six-year deal, meaning he has two years remaining on his contract following the 2024-25 campaign. It runs through March 31, 2027.
While Woodson did get a nice salary bump in 2023 and additional buyout protections, he agreed to at least one contractual term that is quite favorable for Indiana, at least on an annual cash flow basis.
The amended deal requires that Indiana pay Woodson the full balance remaining on his contract if he were to be fired at the end of this season or sooner. So with two years remaining after this season, he’d be owed approximately $8.4 million from IU. There is a clause in the new deal that allows Indiana to pay out that obligation in annual payments of $1 million until the the buyout has been paid in full. The deal also requires Woodson to attempt to mitigate the buyout obligation by seeking other employment.
Most of IU’s coaching buyout obligations are paid over the remaining life of the contract. Accordingly, the amended arrangement with Woodson would significantly soften the annual financial blow to Indiana. IU Athletics brought in more than $170 million in its most recent fiscal year according to a recent report by the Bloomington Herald-Times.
An additional $1 million payment per year does not appear to be a significant consideration as the University considers how to proceed with Woodson. Indiana terminated men’s basketball coach Archie Miller in 2021 and paid or secured donations of $10.3 million for his buyout. Football coach Tom Allen received $15.5 million under the terms of his arrangement with the school when he was let go.
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