At a July 14 press conference, the two men had announced a tentative agreement allowing Allen to coach through the 1981 season at a salary of $250,000 a year. But Allen never signed it, saying that he wanted to exercise a disputed stock option in the team as part of the deal. Williams' dislike of Allen and his free-spending habits was well known around town, but the team president also knew that Allen still was one of the most savvy coaches in football, and he didn't want to risk the fans' wrath by letting him go.
So talks continued during a season in which Theismann was given increasing playing time ahead of Kilmer. Allen also made another little-noticed move that summer when he took on a young high school football coach as an unpaid intern. His name was Charley Casserly, and he would go on to become the team's general manager a dozen years later. The Redskins finished with a 9-5 record in 1977, but they were knocked out of the playoffs on the last weekend of the schedule when the Chicago Bears, by then being coached by Jack Pardee, rallied for a victory that clinched the wild-card berth.
Williams was still hoping to keep Allen as his coach, but a series of events intervened. In early January, Pardee broke off negotiations on a new contract with the Bears, the Rams fired head coach Chuck Knox, and Allen secretly visited Los Angeles to meet with Rams owner Carroll Rosenbloom. All of this led to Williams firing Allen on January 16.
"Our negotiations with George Allen have concluded," Williams said. "I gave George Allen unlimited patience, and he exhausted it." Allen went on to sign with the Rams. By the time the Redskins reported for training camp in 1978, Williams had hired Pardee, a personal favorite, as his new head coach and Bobby Beathard, a personnel executive with the Miami Dolphins, as the team's new general manager. The George Allen era in Washington had ended, but he had left a legacy of winning football teams that would continue long after he had departed.
By now, however, the cupboard seemed bare. The Redskins were bereft of draft choices, and many of Allen's veterans were either gone or no longer especially effective. Taylor, center Len Hauss, cornerback Pat Fischer, tight end Jerry Smith and safety Brig Owens all retired by the time the regular season started. Pardee relegated Kilmer to the bench, finally handing over the job to Theismann and gearing his offense around the hard-running Riggins, who had been wasted as a blocking back the two previous seasons.