Are Grant of Right Agreements Legal?

[dogpause]

Seems to me their purpose is to restrain movement in a way that seems wrong.

 

[Stinger92860]

Are grant of rights legal? NO

There I said it, now get us a seat at the p5 table.

 

[ctchamps]

Seems to me their purpose is to restrain movement in a way that seems wrong.

Lot of discussion about this on the CR forum. My unsophisticated conclusion based on all the developed arguments presented in that forum is that there is a debate amongst the legal community who have commented on this issue. Some say these Rights can not be supported. Others argue they are defensible. It will have to be tested and then go through the court system if this is the case.

 

[freescooter]

My guess is that if someone decides to challenge a GOR, the case will be setled for some kind of a buyout. Nobody would be willing to actually see a legal challenge go to a conclusion because the whole system is now underpinned by these grants.

 

[FfldCntyFan]

My guess is that if someone decides to challenge a GOR, the case will be setled for some kind of a buyout. Nobody would be willing to actually see a legal challenge go to a conclusion because the whole system is now underpinned by these grants.

One of the few times that I agree with you scooter.

In legal judgements, anything can be monetized. Regardless of what any of those that claimed a GOR cannot be fought, the reality is if a school in a conference with a GOR agreements decides to leave, at some point during the process (likely either in front of a judge or an arbitrator) a dollar amount will be decided as sufficient compensation for a school taking their broadcast rights with them.

That the dollar amount (until a precedent is set) will hold quite a bit of financial risk (nobody knows if it will be similar to or substantially more than what a standard exit fee had been) is what I believe has kept anyone from moving at this point. Somewhere down the road this will change and if the precedent setting amount is reasonable it may well start a stampede.

 

[Kitaman]

"For the next few decades, no teams will be able to leave the ACC without sacrificing their media rights, hence giving those schools no value to the leagues looking to expand."

Is this true?

I'm referring to the word "decades"? That seems so unreasonable and shortsighted (signing it).

Also aren't the media rights re-gained when going to a new league?

linky

 

[WestHartHusk]

I am way too lazy to do the research right now, but I am pretty confident that the GOR's as currently constructed (e.g. if you leave you forfeit media rights and payment) have been successfully challenged in other contexts like film.

It is simply against the foundational principle of constructive breach for a court to enforce an agreement that prevents an otherwise advantageous breach to support a less valuable and effective enterprise (the ACC) - especially against schools that didn't vote to it. I suspect, if challenged, a court would reconstruct the GOR to allow the school to leave, leave the rights with the conference, and make the conference pay the school. And such reformation likely result in a settlement.

 

[freescooter]

One of the few times that I agree with you scooter.

In legal judgements, anything can be monetized. Regardless of what any of those that claimed a GOR cannot be fought, the reality is if a school in a conference with a GOR agreements decides to leave, at some point during the process (likely either in front of a judge or an arbitrator) a dollar amount will be decided as sufficient compensation for a school taking their broadcast rights with them.

That the dollar amount (until a precedent is set) will hold quite a bit of financial risk (nobody knows if it will be similar to or substantially more than what a standard exit fee had been) is what I believe has kept anyone from moving at this point. Somewhere down the road this will change and if the precedent setting amount is reasonable it may well start a stampede.

My guess is that it wouldn't even get that far. The parties, for business reasons, would ultimately come to an agreement that would leave the GOR intact but let the school leave for a payment which would be less than the full GOR value. There is too much risk to the conference that if the GOR is overturned, it opens the door for the network to walk away from its deal since the financial underpinning is no longer valid. this is a business decison, not a legal one.

 

[WestHartHusk]

My guess is that it wouldn't even get that far. The parties, for business reasons, would ultimately come to an agreement that would leave the GOR intact but let the school leave for a payment which would be less than the full GOR value. There is too much risk to the conference that if the GOR is overturned, it opens the door for the network to walk away from its deal since the financial underpinning is no longer valid. this is a business decison, not a legal one.

I agree with this. My post was to 'game-it-out' - this is what would happen in practice. Once it is clear you are going to lose a lawsuit you settle and everyone saves a few bucks.

 

[SubbaBub]

Ask Paul McCartney if granting of rights (publishing or otherwise) is legal.

...he'll tell you, yes and that Michael Jackson was an ah-ole.

 

[Strummer]

Any agreement between two willing parties who had competent counsel during negotiations should be enforceable, with some very narrow exceptions.

On what grounds would a court overturn such a contract? Because it didn't work out well for one of the parties? That's not a legal ground for voiding a contract.

One of the bedrock principles of constitutional law is that parties have freedom to contract. Presumably, entrance into a conference, or continued membership, was a fair tradeoff for a GOR clause in the contract. If not, why would they sign it?

That written, whether or not a party is legally correct does not mean that it will enforce its rights, in court or otherwise.

 

[Strummer]

Ask Paul McCartney if granting of rights (publishing or otherwise) is legal.
...he'll tell you, yes and that Michael Jackson was an ah-ole.

What he won't tell you is that he signed away his rights early in his career and was then too cheap to buy back the song rights when he had a chance, going so far as to say the cost was "too pricey."
Paul was the guy who told Jackson that he could make money owning music rights, which prompted Jackson to buy the Beatles songs - which Paul was too cheap to do.

Don't cry for Paul - he was making 40 mill a year on the music he did own (not his) the day he made the mistake of telling Jackson he should buy his own portfolio, thereby making one of the richest men on the planet his direct competitor.

 

[FfldCntyFan]

One (possibly very significant) difference between the publishing/royalty rights to music (even film) and a university's to be broadcast athletic events is that the former deals with what can be characterized as completed work while the latter deals with something that has yet have been performed.

I doubt that Paul McCartney, Brian Wilson (whose father sold his music rights for a fraction of what they were really worth) or anyone else sold the rights to songs that they may one day compose. The manner in which a GOR violation would be viewed would likely be closer to not complying with a non-compete agreement and then there would be some monetary compensation decided to make injured parties whole.

 

[Strummer]

I doubt that Paul McCartney, Brian Wilson (whose father sold his music rights for a fraction of what they were really worth) or anyone else sold the rights to songs that they may one day compose. The manner in which a GOR violation would be viewed would likely be closer to not complying with a non-compete agreement and then there would be some monetary compensation decided to make injured parties whole.

In fact, Paul's original contract (which John was on too), obligated them to write 6 songs a year for many years after they signed the contract, and those future songs were owned mostly by others. The contract was put in front of them by Leon Vapnick, Brian Epstein, and Charles Silver, three Mensches, who were all in the business. Not one of these three scumbags had the decency to tell them they were signing away 51% of their rights. Ah well. One has to learn these things through living, and, unfortunately for the Beatles, they were super successful with zero experience. Dangerous combination. Ask Bieber.

I do, however, like your non-compete analogy - those are routinely thrown out by courts as overly broad. On the flip side, non-compete clauses that are too broad are thrown out because the notion is that employees aren't really dealing on a level playing field when they are looking for work. With Universities, what can be said? It suited them when they signed it, and they were on a perfectly level playing field. I say hold 'em to it, and be more cautious next time about what you sign.