On Dec. 11, 2001, the University of Maryland, College Park finalized a 10-year deal with Ralph Friedgen, its new football coach who had just helped the team qualify for a major bowl game. That deal wiped out a six-year agreement signed just over a year before for a new “enhanced” financial agreement worth a $12 million total. Fast forward eight years and the Terrapins have just finished up a 2-10 season, prompting serious discussions about buying out Friedgen’s final two years for a cost of around $4 million.

Of course there is just one little problem. The athletic department may not actually have the money for the buyout.

Despite the critiques of big-time college sports, many of its effects are limited to the autonomous athletic departments. Athletes do eat up spots and aid budgets, but extravagant stadiums, luxury boxes, and large coaching salaries are at least partially financed by fundraising that is independent of the rest of the school. But with the poor economy and most major athletic departments losing several million dollars a year, many athletic directors are turning to their school for as a source of temporary loans or other assistance. (Loan is a generous term, as the experience of the University of California, Berkeley shows that these debts are often forgiven). For Maryland, it is considering a loan from the school’s endowment to fill the shortfall in its buyout funds.

Not surprisingly though, in a state facing a potential $2 billion budget hole, where the university system recently had to return $25 million, and state employees  are facing as many as 10 furlough days, the notion of shelling out a few millions dollars just so the football team can hire a new coach is not going over well. The state’s governor has already declared that he does not want to see public funds used to pay for a buyout. And the situation may be even worse than it appears since the university has a separate agreement in place that requires them to pay an assistant coach $1 million if he does not replace Friedgen.

Maryland is far from alone in placing itself in the bad position of buying out long-term deals in the face of some of the weakest state budgets in decades. The University Virginia (projected state deficit of $3.5 billion from 2010-12) just bought out its head football coach for $4 million, the University of Louisville (state deficit of $200 million) will spend $2.4 million on its head coach buy out, and the University of Akron will spend between $500,000 and $750,000 on salaries for its recently fired head coach and salaries of assistants who may also be let go while the state of Ohio finds itself $7 billion short for its 2010-11 budget. And do not forget Notre Dame, which is going to spend about $18 million to buy out Charlie Weis.

Perhaps even scarier is that future buy outs will only be worse as coaches’ salaries skyrocket. A study by USA Today showed that 93 college football coaches earn more than $1 million annually, with 12 taking in $3 million or more. Three years ago only 52 made that much, with a lone individual passing the $3 million mark. When you throw in college basketball coaches, four collegiate head coaches rank among the 25 highest paid coaches in the world. Give its recent 32 percent tuition increase, Berkeley should be nervously rooting that it does not have to buy out Head Football Coach Jeff Tedford’s $2.8 million annual salary any time soon.

For years, athletic departments have gotten away with lavish compensation packages for the hot coach du jour and, apart from the occasional academic scandal, have been subjected to minimal pressure about their decision making. But rather than bailing them out, universities should let them live with their mistakes. At a time of furloughs, budget cuts, rising tuition, and reduced personnel, it is downright irresponsible to redirect additional university resources just so the football team can have a better shot at playing in the San Diego County Credit Union Poinsettia Bowl.

UPDATE: Maryland decided Tuesday to bring Friedgen back, avoiding the nasty buyout situation.