Here's how it works. There's usually what's known as a " Compromise Agreement " written into Managers Contracts when they sign it.So the compensation they paid us worked out at £3 million a month. Plus his wages and whatever pay off Potter gets means this has been a expensive, and hilarious, failure.
There's usually a sort of unwritten formula agreement between the LMA and the Club's which often works out at 1 years salary for PL and Championship Clubs and half a years salary for League's 1 and 2.
There is sometimes also a points accumulation payment which also has to be paid over and above the Compromise Agreement amount.
Some of the above can vary if a Manager can get a better agreement written in but they would be the Exception rather than the Norm. And Exceptions are usually only your really high standing Managers around the World.