Why Jim Harbaugh and Michigan recommitted now, and what comes next

Jim Harbaugh isn't leaving Michigan. At least not yet.

Despite Harbaugh's worst season as a head coach at any level, he signed an extension that runs through the 2025 season, athletic director Warde Manuel announced Friday. Harbaugh had one year left on his initial contract with his alma mater, which paid the coach slightly over $8 million in 2020.

Harbaugh's new contract will pay him a base salary of $4 million in 2021, which will increase to $4.426 million in 2025. He can earn a maximum bonus of $3.475 million in each year of the contract, including $1 million bonuses for winning the Big Ten championship and CFP national championship, and $500,000 bonuses for winning the Big Ten East Division and reaching the College Football Playoff.

This season, the Wolverines finished at 2-4 after their last three games were canceled. COVID-19 concerns nixed Michigan's Dec. 5 game against Maryland, then a Dec. 12 game against Ohio State, which opened as a 30-point favorite. As a result, Harbaugh's record against Ohio State remains 0-5, as Michigan last won The Game in 2011, when he was coaching the San Francisco 49ers. On Dec. 15, the team called off a Champions Week game at Iowa.

Harbaugh's future at Michigan has been a hot topic for months, especially with so little job security beyond 2020. Now Michigan has committed to him, at least for a little longer, despite the team's poor play.

Here's a look at why Michigan went this route, what it really means and how Harbaugh can engineer a turnaround in 2021.

Why did Michigan and Harbaugh opt for a new deal?

Michigan was never going to fire Harbaugh outright. Sources in and around Michigan were adamant about that throughout the season. While the Wolverines' record this season and their inability to win Big Ten titles might merit a dismissal, he's still Jim Harbaugh, a celebrated former Michigan quarterback who has excelled as both a college and NFL coach. Even after it became clear Michigan wasn't going anywhere on the field this season, no one with knowledge of the situation saw the school sending Harbaugh packing.

The options then became some type of mutual separation: Harbaugh departing for an NFL job; Harbaugh entering the final year of his contract as a lame duck; or a modest extension like this one. Several sources said Harbaugh wouldn't have balked at returning in 2021 to finish out his contract, as unusual as the move would have been. But a new contract makes sense for Michigan, especially if Harbaugh turns things around in 2021.

In July, Harbaugh said he and Michigan had been close to finalizing a contract extension in February before the pandemic hit. He said athletic director Warde Manuel and the Michigan administration decided in the summer that they "had bigger fish to fry" and that while the extension was no longer was a priority for either side, "I would expect something, that there would be an announcement at some time."

That time is now. But Michigan can still buy out the coach if things don't turn around. The school would owe Harbaugh $4 million if it fired him in 2021, a guarantee that goes down $1 million each subsequent year of the contract. Harbaugh's buyout to leave Michigan begins at $2 million in 2021 and drops by $500,000 in each subsequent year until 2025.

Why did this happen now?

Manuel insisted he would meet with Harbaugh after the season was over, rather than getting a deal done as quickly as possible. He also pointed out that he and Harbaugh have been in constant contact and in communication throughout the season, so the two have already had informal discussions along the way.

That timeline stirred up questions about why the two waited until after the early signing period to announce a deal as it very easily could have been used against Harbaugh on the recruiting trail. When asked about the timing and whether Manuel was concerned it might hurt Michigan's recruiting efforts, Manuel said negative recruiting is not unique to this situation and he didn't have concerns.

Michigan did end up losing two ESPN 300 commitments, but overall the decision to wait to talk after the early signing period didn't have a huge impact on recruiting. The majority of the prospects who did sign with Michigan in the early signing period said they had conversations with Harbaugh about his intentions and they felt comfortable he was planning to stay.

But now, with only a year left on his contract and the season in the rearview, it was time to get the extension done. Had Manuel let Harbaugh go into the summer or into the 2021 season -- which never seemed likely -- without an extension, it would have started to impact the next recruiting class.

If there are any doubts or issues teams can use against an opponent on the recruiting trail, coaches will use them. This move helps squash any rumors or any doubt, at least for the immediate future, about Harbaugh's intentions to stay at Michigan.

Is the NFL still an option for Harbaugh?

NFL interest is likely never going away for Harbaugh, who led the San Francisco 49ers to a Super Bowl, three NFC Championship Game appearances and a 44-19-1 record in four seasons. Six NFL teams (Houston, Atlanta, Detroit, Jacksonville, the New York Jets and the Los Angeles Chargers) have coaching vacancies.

The sense around Harbaugh is that he knows he can always go back to the NFL, especially to some of the less desirable jobs. He would likely be tempted only by a team that is closer to competing for the playoffs. One situation to monitor is the Chargers, who finished 7-9 with seven losses by eight or fewer points and fired coach Anthony Lynn on Jan. 4. They boast a talented rookie quarterback in Justin Herbert and other promising players.

Harbaugh met his wife, Sarah, while coaching at the University of San Diego, and the couple lived in California until he took the Michigan job. A return to the state could be appealing for the family.

Another potential option is Chicago, where Harbaugh was a first-round draft pick at quarterback out of Michigan in 1987. He played for the Bears until 1993 and the McCaskey family has owned the team since before Harbaugh arrived, so they have firsthand knowledge of his approach that could help him. The Bears are a desirable job if they move on from Matt Nagy, but they need a boost on offense, so Harbaugh's recent struggles could hurt his chances.

What are the biggest questions moving forward?

Harbaugh will get another chance to get his alma mater on track in 2021. He faces key decisions on players, staff and scheme. The new contract is largely for show, and if Michigan's product doesn't improve next fall, Harbaugh will face legitimate pressure to keep his job.

Harbaugh's first priority is fixing a defense that this season ranked 89th in yards allowed per game, 79th in rush yards allowed per game and 96th in pass yards allowed per game.

Michigan allowed at least 24 points in every game this season. The Wolverines dealt with key injuries, but their defense was a clear weakness.

Harbaugh must make some tough choices about the defensive coaching staff, which was led by veteran coordinator Don Brown this past season. Brown was let go by Harbaugh and has since been hired as Arizona's defensive coordinator. Brown did a masterful job at Michigan from 2015 to 2018, a span when the defense ranked fourth nationally in both points allowed (17.2) and efficiency (80.27). But there has been a pronounced drop-off and the recruiting from a mostly older defensive staff hasn't matched the production on the offensive side.

A coordinator to replace Brown hasn't yet been announced.

Michigan's offense didn't produce this season either, but those coaches are the team's strongest recruiters and are bringing in talent to help turn things around.

The team's overall class rankings and stars from the recruiting trail have still been very good, but Michigan is lacking in key areas. Defensive tackle and cornerback have been weak spots, considering Michigan has landed only four defensive tackles from the 2017 through 2021 classes and two have transferred.

Along with the likely staff changes, evaluating and landing prospects who can help turn the defense around are huge priorities for Harbaugh.

He also must examine the offense, which averaged 48.5 points in Michigan's two wins but just 18.25 points in the four losses. Harbaugh's inability to groom a superstar quarterback is still the biggest mystery of his tenure. While Ohio State has accelerated its quarterback development under coaches Urban Meyer and Ryan Day, Michigan's has regressed.

Harbaugh has to take a close look at the quarterbacks on the roster, namely Cade McNamara and Joe Milton, and the players he's adding in recruiting. Then he must figure out the best path forward, which could include some staff changes. Without better quarterback play, Michigan and Harbaugh will likely be right back in this spot in 2021.