Excellent post. I agree with everything but have two (minor) additions.
Pay will be based on the hire. As you said, Key would probably get an incentive laden $3-$3.5 million per year contract for 4-5 years. Fritz likely gets $4-$4.5 million a year.
I have been led to believe there might be some other names in play, (Gus, Riley) and if we can pull one of them off, I could see GT spend up to $5.5 a year for the right hire, but that hire is a longshot that hasn't interviewed yet, and I am not sure either one even will.
Also, with Fritz the Tulane buyout has to be addressed, which may be the sticking point with unhappy donors. If it's anywhere near the $8 million I was told, that's an awful lot of money to come off of when you're also promising to up spending on assistants.