Sigh:
With Kentucky football off to a spirit-crushing 0-2 start, the $12 million contract buyout that it would take to remove Mark Stoops as UK head coach after this season has garnered national focus.
Were UK to change its coaching staff following the 2016 season, it could cost far more than $12 million, however. ...
The only thing that would justify paying a coach $12 million — and, potentially a coaching staff almost $18 million — not to work would be a complete competitive collapse.
via www.kentucky.com
Actually, to this alumni, losing doesn't justify paying a coaches $18 million not to coach ... unless the lost gate revenue over the next several years is greater than $18 million. Let's say attendance falls to 30,000, about a 50% reduction. If tickets cost $40 each then each game results in lost revenue of $1.2 million. If there are 6 home games per season the revenue loss is $7.2 million. If there are two seasons left on the coaches' contracts then the total loss is $14.2 million. You'd still want to keep the coaches. The only way an $18 million buyout makes financial sense is if the recovery in ticket revenue begins sooner, rather than later, you'll break even sooner (maybe they should fire the athletic director that set up the $18 million buyout).