First of all, buyouts are almost never 100% pay, and only get paid in 'full' if you don't take another job. Hi contract might be 1.4 million left, but there's almost no way it's the full amount. Plus he's a young guy with connections--he'll almost assuredly be an assistant on a P5 team or an AHC in a G5 team after this even if he gets the pink slip.Would we really need to fire him after next season though? We'd have to pay 2 years of his buyout, I believe, so unless it's really bad, why can't we just let him continue on his contract for another year? He'd still have 2 years left, so if after the 4th year, still no progress, then yeah, maybe you buy out that last year. But if he gets it figured out, then you can do an extension.
Generally, most coaches don't recruit during as a lame duck sitting on an expiring contract without an extension. If he has a bad year this year and you are serious about giving him all the tools he can to improve, then you almost have to give him an extension so that he can recruit and keep a staff together. If you give him a fourth year you are essentially committing to an extension and a raise...and if you don't believe in him enough to do that then you should have just fired him.