Kennedy's deal was the topic of discussion when he and Ole Miss chancellor Dr. Dan Jones met over the weekend, senior executive associate athletics director John Hartwell said.
Kennedy just completed his sixth season at Ole Miss, his fifth with 20 or more wins, and has two years remaining on a contract that pays him $1.3 million a year. His name has been mentioned in connection with the opening at UAB, his alma mater, which fired coach Mike Davis on Friday.
"Conversations will continue over the next several weeks," Hartwell said. "We recognized this as something that needed to get done before the UAB situation."
Kennedy was an immensely popular player at UAB from 1988-1991 after transferring from North Carolina State. He still holds a prominent place in UAB record books including season scoring average (21.8) and career records for 3-pointers attempted (728), made (318) and 3-point percentage (.437).
To take the UAB job would likely require a significant pay cut. Davis was paid $625,000 a year, and the administration, having fired a football coach in 2011, may not be in position to increase that salary for its next basketball coach.
Last extension in 2010
Mississippi law allows contracts for up to four years. Kennedy signed an extension in 2010, but athletics director Pete Boone did not extend the contract after the 2011 season.
Kennedy is 125-78 at Ole Miss. Only five coaches in the history of the SEC have won more games in their first six years, but the Kennedy has not led the Rebels to the NCAA tournament.
It's unclear if a new deal for Kennedy might include more money or just more years on the current contract.
Boone is in his last days as AD and will stay on the job through June at the latest. His replacement has not been named.
A decision on Kennedy will come from a series of discussions between Jones, Boone and Hartwell - with Jones "signing off," Hartwell said.