After months of speculation following the Michigan football team’s dismal 2020 season, coach Jim Harbaugh isn’t going anywhere.
Harbaugh has inked a four-year contract extension to bring the total duration of his contract to five years, as first reported by Chris Balas of The Wolverine. Sam Webb of The Michigan Insider confirmed the news with Harbaugh himself, according to a tweet. The deal includes a $4 million base salary, while Harbaugh can earn up to another $3,475,000 in possible incentives. Perhaps most notably, the deal includes a low buyout — one that begins at $4 million following next season and then decreases by $1 million per year.
On Friday afternoon, the program formally announced the extension.
“I continue to believe that Jim is the right man to lead our program in pursuit of Big Ten and CFP championships,” athletic director Warde Manuel said in a statement. “Our program didn’t achieve at a level that anyone expected this year but I know those setbacks will drive the coaches, players and staff moving forward. Jim is a tireless worker and competitor. Following the completion of the season we talked for many hours on what it will take for Jim to lead and get us back on the right trajectory.
“Jim loves the University of Michigan and this football program. He has been committed to this university, athletic department and football program since his days as a player and returning in 2015 as the head coach. He wants to do everything possible to build a championship football team while graduating our student-athletes. We all need to do our part to continue to help in that pursuit as it takes everyone pulling the same direction to have a championship level program.”
Harbaugh, who just finished the sixth season of a seven-year deal that began in 2015, is currently the fourth-highest-paid coach in college football, according to USA Today. Harbaugh’s scheduled school pay would’ve been just north of $8 million in 2020, but he took a 10% pay cut over the summer to help offset the financial impact of the COVID-19 pandemic. USA Today’s list shows no other Big Ten coach making more than $6 million this season.
When Harbaugh first returned to Ann Arbor in 2014, his contract included a $500,000 annual salary and $4.5 million in additional compensation. Michigan added an annual life-insurance policy two years later that pays Harbaugh a $2 million premium advance each year through the end of his contract. Add in contract-stipulated pay raises, and you arrive at the current estimated $8 million figure. The life insurance policy will carry over into Harbaugh’s new contract, a source told The Daily.
But for all the money Michigan has invested in Harbaugh, the results have been underwhelming. Even though the Wolverines are 49-22 since 2015, Harbaugh’s teams have repeatedly fallen short on the big stage. Harbaugh is 0-5 against Ohio State, 3-3 against Michigan State and 2-12 against top-10 teams. Michigan hasn’t won an outright Big Ten title since 2003.
The extension news comes on the heels of a 2020 season that saw Harbaugh’s team struggle, to say the least. The 2-4 Wolverines lost as a three-touchdown favorite against Michigan State, fell to Indiana for the first time in three decades, suffered their worst halftime deficit in Michigan Stadium history against Wisconsin and lost to a then-winless Penn State team by double digits. Michigan had never finished a full season without a home win prior to this year, and it had never lost to a team 0-5 or worse until the Nittany Lions left Ann Arbor with a win on Nov. 28.
“There is work to be done and challenges to be addressed,” Harbaugh said in a statement. “These challenges are being addressed as we continue to strive for excellence in the classroom and championships on the field, a message that I hope is noted in the language of our agreed-upon contract.
“Thanks to our University of Michigan players and their families who have placed their trust in our program and our goals, said Harbaugh. “All our energy and focus is directed toward laying an outstanding foundation for the 2021 football season.”
Despite the struggles, firing Harbaugh following this season would have made little financial sense. Even after the return of football, athletic director Warde Manuel projected in mid-October that the Michigan athletic department would operate at an $80 million deficit. According to David Jesse of the Detroit Free Press, terminating Harbaugh’s contract and firing much of his staff would’ve cost Michigan up to $10.8 million — $6.4 million for Harbaugh’s buyout and $4.4 million to dismiss assistant coaches.
With an extension finalized, Harbaugh’s next task comes in the form of his own coaching staff. The Wolverines fired defensive coordinator Don Brown in December, and they appear set to replace him with Baltimore Ravens linebackers coach Mike Macdonald. At this point, it’s reasonable to expect additional turnover in the coming days and weeks.
This is a developing story and will be updated.