GOR vs. Exit Fees

[WestCoastHusky]

Great article explaining this:

http://businessofcollegesports.com/tag/conference-realignment/

Basically, ACC is screwed.

 

[businesslawyer]

Great article explaining this:

http://businessofcollegesports.com/tag/conference-realignment/

Basically, ACC is screwed.

The article explains the exit fees well, but I'm not at all convinced a court would have any trouble determining that there is no reason for the GOR other than to serve the purpose of being either punitive liquidated damages or being anti competitive generally. Neither of which are o.k.

 

[DCHuskyFan]

So if the ACC required all members to comply with a GOR demand, does that accelerate the beginning of the end for the ACC or does it prompt the current ACC members to rally together?

 

[WestCoastHusky]

So if the ACC required all members to comply with a GOR demand, does that accelerate the beginning of the end for the ACC or does it prompt the current ACC members to rally together?

Unlike exit fees, I believe GOR requires all the member schools to agree. If one does not, it won't fly. In the ACC's case, I believe they tried for GOR but got shot down so they settled on high exit fee. FSU for one will never agree to GOR with the ACC.

 

[nelsonmuntz]

The article explains the exit fees well, but I'm not at all convinced a court would have any trouble determining that there is no reason for the GOR other than to serve the purpose of being either punitive liquidated damages or being anti competitive generally. Neither of which are o.k.

There is a case on the anti-competitive side, but the GOR is not liquidated damages so much as the sale of the school's broadcast right to the conference in exchange for a fee stream. Long term sales of TV rights are definitely enforceable.

 

[businesslawyer]

There is a case on the anti-competitive side, but the GOR is not liquidated damages so much as the sale of the school's broadcast right to the conference in exchange for a fee stream. Long term sales of TV rights are definitely enforceable.

If I'm representing the conference, the weakness is it's not for a fee stream -- it's just meant to luck your members up. If the networks were demanding this, it would be one thing. But we all know this is not coming from the networks, but from the commissioners offices.

Again, I think people were creative to come up with this idea, and I'm not saying it won't work, but I won't be confident that it will work until I see a court uphold it.

 

[nelsonmuntz]

If I'm representing the conference, the weakness is it's not for a fee stream -- it's just meant to luck your members up. If the networks were demanding this, it would be one thing. But we all know this is not coming from the networks, but from the commissioners offices.

Again, I think people were creative to come up with this idea, and I'm not saying it won't work, but I won't be confident that it will work until I see a court uphold it.

It's no different than any kind of VAR relationship. The problem with breaking a GOR is getting another network to buy TV rights from a school that the school may not own. When a school breaks an exit fee, the school and the conference get to slug it out in court over who owes what. The school still owns its TV rights.

 

[businesslawyer]

It's no different than any kind of VAR relationship. The problem with breaking a GOR is getting another network to buy TV rights from a school that the school may not own. When a school breaks an exit fee, the school and the conference get to slug it out in court over who owes what. The school still owns its TV rights.

You are not changing my mind. The school will simply keep the old network's camera crew out of their stadium. The conference will then sue for damages. Guess what -- you won't get damages if the GOR is viewed as either a restraint of trade or punitive liquidated damages.

 

[nelsonmuntz]

You are not changing my mind. The school will simply keep the old network's camera crew out of their stadium. The conference will then sue for damages. Guess what -- you won't get damages if the GOR is viewed as either a restraint of trade or punitive liquidated damages.

Good luck getting a third party to jump into that fray. That is practically the definition of Tortious Interference for any conference or network that tries to buy the rights of the school under a GOR.

 

[XOVERX]

No conference yet has had the wherewithal to poach a school from a GOR league.

Doesn't mean it's impossible, but it does mean it's highly difficult and unlikely.

 

[huskymedic]

Stumbled across this tonight on Lexology...

http://www.suitsbysuits.com/20121128_acc_exit_fee#page=1

BL and Nelson can arm wrestle over it,

 

[mattp]

The article explains the exit fees well, but I'm not at all convinced a court would have any trouble determining that there is no reason for the GOR other than to serve the purpose of being either punitive liquidated damages or being anti competitive generally. Neither of which are o.k.

I heard you're a lawyer so I'll agree with you

 

[TuxedoYoda]

No conference yet has had the wherewithal to poach a school from a GOR league.

Doesn't mean it's impossible, but it does mean it's highly difficult and unlikely.

Remember, the B1G, Pac 12 & Big 12 all have a GOR and it is a key element to their multi-layered network deals. Those 3 conferences have a serious interest NOT to steal teams from each other because none of them want a GOR to appear vulnerable. The SEC has no exit fee or GOR. The SEC could lose Mizzou if the B1g offered but no one else would eve leave and Mizzou could be replaced by a great school very quickly. The ACC is the one conference without a GOR that is vulnerable that has desirable programs. The ACC is doomed.

 

[Carl Spackler]

After reading the tenets of the lawsuit filed by Rutgers today, I think it's inevitable that the entire concept of exit fees/media rights etc. being enforced is going to be dismissed. There's simply no more precedent for anything like that. We are experiencing conference movement that is unprecedented. In 1990, the movement was close - but the difference then - was that some 28 or so I think off the top of my head, decades long independants in football, we're forming and/or joining conferences.

Now it's like fleas jumping from one flea infested dog to another.