I know this is now captain obvious, but the very top leadership at Michigan really needed to step in and take this out of Manuel's hands before he made his decision on Moore. The failure in leadership here goes way above Manuel.
Leadership must have been aware of the outside investigation taking place, even if Manuel was primarily overseeing it. If they were more dialed in, they could have had a shot at controlling the situation.
First, they'd see Manuel might have been a little too mixed up in it and might make a decision that prioritized his best interest over Michigan's. Second, I think it'd be possible for them to meet with Moore and potentially his legal counsel. If there was overwhelming evidence of multiple violations of university policy, it might have been possible to convince Moore and his representation that he could be fired for just cause. I'm no lawyer, but I'd think it be in the best interest of both parties to come up with a separation agreement that included a buyout short of the full amount Michigan would have owed him if he was let go without cause.
Michigan presumably had the leverage and perhaps could have floated next year's salary as an offer. At the same time, both parties agree to some kind of non-disclosure agreement. Or limited disclosure? Not sure what's possible for public institutions but you try to limit the juicy tell all details. And in that initial meeting, Moore's lawyer has a come to jesus meeting with him, where he outlines all the millions he'll cost himself in the long run by doing anything stupid, including anything related to his ex-lover, in the next few days.
At the end of the day, it's more or less understood that Michigan wasn't happy with Moore, they wanted to win more games, and he had some type of affair within the department. But both parties can move on with far less reputational damage than they're now suffering.
Unless I'm missing something, sort of mind boggling how Manuel was allowed to go so rogue on this one.