In his first three seasons with the program, Chip Kelly coached UCLA to 10 wins, 21 losses and no winning records. An 8-4 campaign in 2021, Kelly’s fourth with the school, punctuated by a three-game winning streak to close things out, provided the first real taste of momentum the program had experienced under the big-name head coach. But that momentum fizzled when UCLA pulled out of the Holiday Bowl just a few hours before kickoff due to COVID concerns.

Four years, no bowls.

Kelly, according to the San Jose Mercury News’ Jon Wilner, has now entered into lame duck territory.

A new report from Wilner on Wednesday detailed the inner workings on a contract extension the Bruins and Kelly’s representation—super-agent Jimmy Sexton—are currently discussing. The head coach is entering into the final year of his initial five-year deal and so far there reportedly remains some distance between the two sides.

From Wilner’s report:

“Don’t be fooled by the eight-win season, the turn of the calendar or the general lack of rumor and speculation. Kelly’s situation is anything but settled.

“To be clear: We believe it’s more likely than not that Kelly will coach the Bruins next season. But by no means is his return guaranteed, according to sources familiar with the situation.”

On Jan. 16, as Wilner notes, Kelly’s $9 million buyout drops to zero. The coach could walk away from the program, or UCLA could wipe its hands clean of Kelly. In the days following UCLA’s 42-14 win over Cal, there was talk of an extension but no agreement. Kelly earned $5.6 million this season—one of the biggest numbers for a coach in the Pac-12—and wants a “fair contract,” per Wilner, but isn’t wholly focused on that piece of it.

Wilner writes that Kelly could “seek employment as an NFL coordinator or quarterback coach if a respectable offer isn’t forthcoming,” but leaving a program weeks after signing a new recruiting class and hiring a pair of new assistant coaches would be a daring move.

On the UCLA side of negotiations, athletic director Martin Jarmond has a multi-year budget deficit to consider when discussing a new contract, per Wilner, and both handing out a contract with a huge buyout to Kelly or diving into the coaching market himself would be hard financial pills to swallow. As coaching contracts soar, LA-based programs are at a disadvantage given the value of their dollar versus the value of a Midwest-based program’s dollar. If UCLA isn’t willing to up Kelly’s salary for Kelly, it likely wouldn’t be willing to provide the same range for a newcomer.

From Wilner:

“… a hard-line stance that prompts Kelly to leave would put the Bruins in a poor strategic position: The middle of January is a suboptimal time to begin a coaching search, especially in a market that was short on supply in the first place. Would there be candidates willing to accept a mid-level salary within the Power Five hierarchy who would be demonstrably better coaches than Chip Kelly?”

Kelly is 18-25 in his four years at UCLA, the worst initial four-year period in UCLA history for a head coach.  Expectations were high for the 2021 season, and many are split on whether the 8-4 record met those expectations. Still, others consider UCLA to be on the right track; the roster better resembles the style Kelly wants to deploy and the Bruins landed one of the higher-profile transfer additions so far in quarterback Dillon Gabriel.

But if the two sides don’t come to an agreement by the time Kelly’s buyout evaporates, Wilner writes “it could turn messy.”