It's quite the scam, but that's what college athletics has become.
What's the scam, exactly?
It's a legal scam, but getting paid $57 million for not working when you were lousy at your last job is not exactly what I'd call making an honest living. I know you believe that the market rules all and is somewhat sacrosanct, so I guess our opinions will differ. No big deal.
An institution such as Penn State has multiple options to avoid paying $57,000,000 in dead money for James Franklin not to coach. They just chose not to exercise any of them.
1) They could have let Franklin coach out the remaining years on the contract. Voila: NO DEAD MONEY
2) They could use annual contracts. Sure, they'd probably have to take a MUCH bigger budget hit each year (bigger salary in exchange for little/no security), but they wouldn't have any dead money
3) [Somewhat less sarcastic] they could trying to negotiate paying him less money each year for more years (e.g. instead of 8 million/year for 7 years, 4 million/year for 20 years, numbers made up). This wouldn't reduce the total amount of dead money, but it would reduce the annual impact...until they fire their next coach in less than 20 years