Dennis Dodd: Big Ten expansion not done...stay tuned

[UConn Dan]

The grant of rights agreement essentially replaces the ACC's $52 million exit fee, which is being challenged in court by Maryland. Boland said he believes the grant of ights agreement will be legally enforceable.
"Rather than holding the school, it simply holds the school's money," Boland said. "So in that sense, it is less subject to being circumvented or negotiated than the exit fee contracts since it is the conference that has the money and the advantage in the status quo."
http://articles.courant.com/2013-04...20130422_1_uconn-ad-warde-manuel-exit-fee-acc

 

[Excalibur]

Is this true?

I don't think so. Pretty sure there's still an exit fee, but not sure of the amount.

 

[UConn Dan]

No. The GoR is not a "grant of revenue generated by media rights", it is a "grant of media rights." The conference gets the media rights from the school in exchange for money and assigns them to its TV partner in exchange for money. The conference is a conduit between schools and network. The GoR together with the conference-network TV deal ties the school's media rights to a network, and guarantees a defined revenue stream to the school for those media rights for the duration of the deal. The school in signing the GoR gives up the option of moving its TV rights to greener pastures, in exchange for a bump in revenue from its existing TV partner. If Clemson moved from ACC to SEC or B1G, they would not get an increase in revenue until the current contracts expired, because they'd still be paid out of the ACC deal and it would be the ACC's media partner who would own the rights to televise Clemson home games in SEC or B1G. If Clemson games in the SEC or B1G generate more revenue, that is a windfall to ESPN, not Clemson.

There's one thing that I may have been mistaken on and that's that the departing school's home games would be aired on their new conference television network, that's most likely not the the case. But the fact that the rights and money (for HOME games) are with the Conference and not the network. The departing team would get absolutely zero from their old network TV deal. It would be up the team's new conference to subsidize this loss of revenue. Keep in mind that the new team can "add value" to league away games and overall conference strength and ratings.

 

[UConn Dan]

I don't think so. Pretty sure there's still an exit fee, but not sure of the amount.

See above. There's no need for an exit fee when the GOR is valued at around $300million.

 

[SouthronCross]

What if a school changing conferences would benefit ESPN? Let's say UNC wanted to join the SEC. Would ESPN think that UNC as a member of the SEC is worth more to ESPN than it would as a member of the ACC?

Thats a great question. I'm curious as to what the answers might be.

 

[btstimpy]

PS - with the ACC GOR (agreed in principal prior to July 1st), there is no more $50million exit fee -- that's gone as of the GOR (but not quite sure if the GOR has been officially signed yet).

This is incorrect. Both the GOR and the exit fee remain in place. To leave the conference now, the league would retain the member's television rights while the member also pays the exit fee to leave. The Grant of Rights has an expiration date. The Exit Fee does not.

 

[Adios]

This is incorrect. Both the GOR and the exit fee remain in place. To leave the conference now, the league would retain the member's television rights while the member also pays the exit fee to leave. The Grant of Rights has an expiration date. The Exit Fee does not.

Inflation will make the exit fee easier to afford over time.

 

[uconnbill]

I don't see how the Big 10 expands anywhere but to the SEC or non-P5. The Big 12 and ACC are off limits now. Missouri is the only SEC school I could see having any interest in leaving. That is pretty much the extent of realignment discussions involving the Big 10.

I also think the SEC would trade Mizzou for Cincinnati without losing much sleep. Better football, better basketball, better recruiting. The SEC doesn't worry about markets.

You really need to talk to people who are fans in the SEC as some I know wouldn't want Cincinnati at all and if they lost Missouri they would find another school in the Big 12 to fill the spot.

 

[btstimpy]

Inflation will make the exit fee easier to afford over time.

It is 3X Operating Revenue. So it isn't static. The 2012 amount is $53 million, but it will increase when operating revenue increases as it is currently written.

 

[nelsonmuntz]

You really need to talk to people who are fans in the SEC as some I know wouldn't want Cincinnati at all and if they lost Missouri they would find another school in the Big 12 to fill the spot.

No schools are leaving the Big 12 or ACC. Read the rest of the thread.

 

[UConn Dan]

This is incorrect. Both the GOR and the exit fee remain in place. To leave the conference now, the league would retain the member's television rights while the member also pays the exit fee to leave. The Grant of Rights has an expiration date. The Exit Fee does not.

Link? Show me. I've provided articles that say the GOR replaces exit fee. I've read quotes from ACC officials that say the same.

No league with GOR has an exit fee as well and the SEC has neither.

 

[woomba]

Might as well wait for the Maryland lawsuit to clear up rather than debate it here - we'll see how much bite the exit fee has then.

 

[BTwelve]

You really need to talk to people who are fans in the SEC as some I know wouldn't want Cincinnati at all and if they lost Missouri they would find another school in the Big 12 to fill the spot.

The only attainable target of value for the SEC (even assuming the B12 GOR could be broke) in the Big 12 is Oklahoma State.

Texas, Oklahoma- no interest in the SEC (OU was courted up to three times, including along with A&M twice).
There is a multitude of reasons for this. I can elaborate later if anyone cares.

Kansas- no interest in the SEC currently as long as the B1G has open spots. And might not be any interest in any case. Their media market makes them #3, while their basketball is gravy.

No other Texas school outside of UT gives the SEC any more than what they already have. West Virginia is just too small. They have loyal fans and a solid national brand but if Missouri can be added to the SEC, then you know markets have something to do with this. If there is one or two areas in Texas that A&M might not necessarily bring along it's North and West Texas. And short of UT (everywhere) and OU (specifically DFW), you aren't going to address that.

That leaves Oklahoma State. It would at least get the SEC Net plastered all over a football crazy state. With a rising program and a few top 50 media markets (OKC, Tulsa).

All that said, if you're even considering the Big 12 schools, you might as well consider the ACC schools. Because it's the same GOR either way. The ACC reportedly asked for "help" from the B12 in the wording.

 

[WestHartHusk]

Might as well wait for the Maryland lawsuit to clear up rather than debate it here - we'll see how much bite the exit fee has then.

Given that Maryland presumably has a viable argument that the $50M exit fee is a punitive damage (rather than a compensatory one), how in the world is a GOR that would cost a school upwards of $250M for leaving not punitive?

 

[caw]

No. The GoR is not a "grant of revenue generated by media rights", it is a "grant of media rights." The conference gets the media rights from the school in exchange for money and assigns them to its TV partner in exchange for money. The conference is a conduit between schools and network. The GoR together with the conference-network TV deal ties the school's media rights to a network, and guarantees a defined revenue stream to the school for those media rights for the duration of the deal. The school in signing the GoR gives up the option of moving its TV rights to greener pastures, in exchange for a bump in revenue from its existing TV partner. If Clemson moved from ACC to SEC or B1G, they would not get an increase in revenue until the current contracts expired, because they'd still be paid out of the ACC deal and it would be the ACC's media partner who would own the rights to televise Clemson home games in SEC or B1G. If Clemson games in the SEC or B1G generate more revenue, that is a windfall to ESPN, not Clemson.

So ACC partner keeps games, Clemson gets paid for games from ACC. So just discussing GoR, everything stays net neutral until the context ends for Clemson and ACC. Why do people say Clemson would lose 250 million or whatever it is. They dot lose anything, they just don't gain anything from media.

Of course Clemson may sell more gear/seats/better bowls/etc by a move, but strictly media wise they don't lose or gain anything besides some control

So if they went ESPN conference to ESPN conference the only entity that gains money is ESPN. Why would ESPN want to do that (sarcasm).

I could hurt the ACC if prime timeslots are assigned to Clemson rather than say UNC.

Obviously just using these schools as examples.

 

[UConn Dan]

If a school leaves the ACC that school forfeits all rights to revenue from the ACC TV deal for its home games. Not sure why people are saying the school still gets paid by the ACC regardless of what conference they are in!? That's just spreading misinformation.

 

[Excalibur]

If a school leaves the ACC that school forfeits all rights to revenue from the ACC TV deal for its home games. Not sure why people are saying the school still gets paid by the ACC regardless of what conference they are in!? That's just spreading misinformation.

I don't think anyone knows whether that is true or not. I question whether you are correct because I wonder what the consideration is for the grant of rights if it is not a share of the revenue, but it's speculation on my part, just like it's speculation on your part.

 

[husky10]

May have already been explained here but i am just curious. The gor assigns a conference the media rights to all a schools home games but what in fact makes it a home game? Who gets to sell the tickets? Where the game is played? Could Georgia tech move to the B1G play all their home games at the Georgia Dome and call them neutral site games thereby giving the ACC rights to none of the TV revenues?

 

[woomba]

May have already been explained here but i am just curious. The gor assigns a conference the media rights to all a schools home games but what in fact makes it a home game? Who gets to sell the tickets? Where the game is played? Could Georgia tech move to the B1G play all their home games at the Georgia Dome and call them neutral site games thereby giving the ACC rights to none of the TV revenues?

Technically, yes. For true neutral site games gate proceeds are usually pocketed by the sponsoring party and both teams receive a flat fee for going to the game - similar to how a bowl works. However, sometimes one of the teams owns the rights to the gate proceeds and just pays the other team a flat fee - and in this case this isn't considered a neutral site game...which is why I think the ND games played in Ireland are technically considered to be ND home games.

Anyway, the scenario you describe was one of the conspiracy theories that one of the WVers were throwing around a few months back. Doubt it's all that practical to pull off though.

 

[UConn Dan]

I don't think anyone knows whether that is true or not. I question whether you are correct because I wonder what the consideration is for the grant of rights if it is not a share of the revenue, but it's speculation on my part, just like it's speculation on your part.

The basic details including that each school would forfeit their home TV earnings are in black and white...all from reputable sources...google it.

 

[CTMike]

If a school leaves the ACC that school forfeits all rights to revenue from the ACC TV deal for its home games. Not sure why people are saying the school still gets paid by the ACC regardless of what conference they are in!? That's just spreading misinformation.

This thread has definitely confused me on that point.

 

[BlueHen]

If a school leaves the ACC that school forfeits all rights to revenue from the ACC TV deal for its home games. Not sure why people are saying the school still gets paid by the ACC regardless of what conference they are in!? That's just spreading misinformation.

That makes sense, otherwise it doesn't seem like GOR would be much of a CR deterrent.

FWIW I read an article a while back that said a team that leaves a GOR conference forfeits the revenue that it would otherwise get under the GOR. Said team would have to do without that revenue or hope that it's new conference home would be willing to make up the revenue difference.

 

[Excalibur]

The basic details including that each school would forfeit their home TV earnings are in black and white...all from reputable sources...google it.

I've seen plenty of articles making that assumption, but nobody quoting an official with knowledge of the contracts. Most of them seem to take the info from an original Charlotte News-Observer article discussing the "basic principles of a grant of rights." Frankly, it's a moot point. The GOR makes a team essentially worthless to another conference, or at the very least chops their value in half. It's a huge deterrent to expansion.

 

[kyleslamb]

The basic details including that each school would forfeit their home TV earnings are in black and white...all from reputable sources...google it.

That doesn't really make logical or legal sense. A legal agreement wouldn't be valid if one party ceased offering consideration to the other.

Right now, the Grant of Rights is an addendum to the television agreement. What is being offered? The team's rights of televising their home games is being granted to the conference for a set period of time rather than just the period of time in which they are members. What is being given? In return to those rights, teams are compensated by the conference an agreed-upon share of the television revenue.

The agreement has to be fulfilled on both ends in order to be valid. If a team leaves to join another conference, the old conference still has to honor the consideration (in this case, compensating a team for those rights). It can't just say "we get to keep your rights but you don't get paid for them." That would be a breach of the contract.

Think about a singer that records 10 tracks for a record label under an exclusive contract. They release the album that was contracted. Ten years later, the label, which has a grant of rights to the recording, releases another album with re-worked tracks based on the original recordings. That artist is still entitled to the royalties despite being under a new exclusive contract with another label. Likewise, a school does not forfeit its right to compensation just because it's granted the rights to a conference. It didn't grant the rights for free. It's granted under the condition it will receive consideration for those rights.

If a team leaves the Big 12, for instance, it will still be entitled to its share of the Big 12 media revenue (although it would no longer get bowl revenue, NCAA units or gate sharing). The deterrent comes because the new league would not have a right to televise those games, and instead, the revenue would be split equally among Big 12 members (including the school that left). So the new league would have to work out an agreement with the school that it's willing to forfeit that revenue as a deduction against its new conference revenue distribution.

The Grant of Rights isn't intended to be punitive against a school. It's meant to make schools less attractive to conferences seeking to take them. The schools will still be entitled to compensation in exchange for its television rights wherever it goes. The only difference is that the conference retains those rights and obligations that come with.

 

[jostar1]

The agreement has to be fulfilled on both ends in order to be valid. If a team leaves to join another conference, the old conference still has to honor the consideration (in this case, compensating a team for those rights). It can't just say "we get to keep your rights but you don't get paid for them." That would be a breach of the contract.

The Grant of Rights isn't intended to be punitive against a school. It's meant to make schools less attractive to conferences seeking to take them. The schools will still be entitled to compensation in exchange for its television rights wherever it goes. The only difference is that the conference retains those rights and obligations that come with.

This doesn't seem correct, that the school that is leaving would still get paid. According to this story from CBS Sports, the school would NOT get paid:

"A Grant of Rights, in basic form, is written permission from league members to relinquish control of television rights to the league for the duration of the deal. If a school leaves, it forfeits those earnings to be spread among the rest of the conference."


http://www.cbssports.com/colle...-of-rights-deal