From terms like "with cause" to "mitigation" to possible arbitration with the league, here's what it looks like when a deal is terminated.
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Mitigation
Guarantees in coaching contracts are offset guarantees, meaning the firing team’s financial liability is reduced if and when the coach secures work and is paid by another team during the term of the contract. While the firing team has an obligation to pay off the contract, the fired coach has a
duty to mitigate,meaning he has an obligation to seek and find a similar coaching position with another team (that can be a college team as well). In other words, the fired coach cannot simply sit and collect his paycheck; he has to mitigate and try to find another job, with the payments from the new job offsetting the amount owed from the firing team.
Reputation
Reputation-wise, the mitigation issue told me a lot about how a couple of NFL teams operate.
I dealt with the mitigation issue when managing legal and business issues with the Packers. After we fired a coaching staff in Green Bay, we found ourselves with many fired coaches being hired by other teams. Usually, the other team did the right thing, paying the fired coach a market-value contract for that job, often similar to what we owed him, sometimes wiping away our financial burden completely. However, in a few cases, the other teams were not as upstanding.
These situations showed me how certain NFL teams operate to save a few bucks at the expense of league “partners.” I will never forget these experiences, and they know that I know how they operate. And no, I will not name them here, but they know who they are.
The business of the NFL is cutthroat not only between players and teams, but can be between teams as well.