No, it falls on the extension. They might believe they hired the greatest basketball coach who ever blew a whistle. They still really have no idea what they have and there isn't any market for him to be pulled away from them. His price tag gets a little higher if he wins it all next year but even if that happens he isn't going anywhere.
If you have money to burn it doesn't matter but again no reason to sign him because you know he's not going anywhere. Only way he moves is if he flames out and then you're on the hook.