Does the AD have carte blanche to offer contracts like that? I thought contracts required approval of the chancellor and the financial officer? How would they even know how much money was allegedly agreed to? It makes zero sense, IMO. I just don't see a verbal contract, which is what this would have to be, being enforceable in the world of college athletics. There are no specifics to enforce, no agreed upon terms. Paying him anything would be incredibly stupid.
Unless he has dirt they don't want getting out. But that would be blackmail, not enforcing a contract.