Sales contracts don't have termination provisions. Once media rights are sold, they are sold. That is the end of it. To beat the GOR, the league that is losing the team would have to simply release that school out of the goodness of their heart. Why would a conference do that?
And I bet even someone like you that was "modestly" paid at $400 an hour would not be so stupid as to have your client sign a GOR that someone could just get up and walk out on.
Edit: The core assumption anyone has to make to assume that a GOR can be beat is that everyone involved in drafting the GOR's are total freaking idiots, because without that assumption, there is no reason to believe GOR's can be beat.
Sales contracts do not have termination provisions for stuff that has already been sold. This is like selling a house for $500k, realizing that it was worth $700k, and trying to get the house back. This buyer may give it back, but they are under no obligation and there is nothing the seller can do if the buyer says "no". There is no way to force the buyer to give the house back.
That is the same situation as a GOR.
PJ,
Your argument holds up right to the point where you assume someone can leave. ESPN is the beneficiary of the GOR since they purchased the media rights. Why would ESPN let someone walk away? The ACC could make a credible threat that schools were going to leave, which forced ESPN to increase rights fees. In return, ESPN made the contract directly with the individual schools (kinda). There is no threat to leave now, because ESPN, through the ACC, already owns each schools rights for the next 15 years. Show is over.
So Kansas leaves the big 12 with no monetary penalty?
Not sure it's that easy...
Can't see the GOR having any teeth if a school can leave, still get paid by the old conference and get some checks from the new.
I'm guessing once a school leaves, those conference checks get cut to zero.
Without some legal loophole, either Kansas or the big would need to take a hit. Not sure why Kansas would sign up for that...
you might be right... just doesn't seem right that a school can leave the conference and still collect revenues for tv rights it no longer owns. especially if they are no longer in that conference.Marty - I am curious why you think the GOR has to have "teeth" regarding the conference. From my view the GOR is a bargaining chip, a means by which universities together negotiate a better TV deal by providing a network with a firm commitment to inventory over a given period of time. To me it is the exit fees that are the "teeth" and which are supposed to capture the damages caused by departing a conference.
PJ,
Your argument holds up right to the point where you assume someone can leave. ESPN is the beneficiary of the GOR since they purchased the media rights. Why would ESPN let someone walk away? The ACC could make a credible threat that schools were going to leave, which forced ESPN to increase rights fees. In return, ESPN made the contract directly with the individual schools (kinda). There is no threat to leave now, because ESPN, through the ACC, already owns each schools rights for the next 15 years. Show is over.
Okay, maybe I am getting a better understanding of Grants of Rights. Given some of the recent commentary:
1) GoR's are particularly important for Conference Networks: B1G has GoR, B1G has BTN (with Fox); Pac-12 signed GoR at the creation of the Pac12 Network; SEC now launching SEC network (ESPN) which *may* incite a GoR; ACC launches "planning" of network (with ESPN) and signs GoR; Big 12 has no conference network, but has GoR, schools retain Tier 3 rights.
2) Television contracts: B1G(through 2015-16): ESPN, BTN(Fox); Pac-12: ESPN, Fox, Pac12N, SEC: CBS, ESPN, SECN(ESPN), ACC: ESPN; Big 12: Fox, ESPN.
So the Big12 is the only conference firmly committed to "no network", yet it has a "GoR". Given that Big 12 Tier 1 is Fox (and Tier 3 is with the schools, most of whom have allied with Fox), that BTN is Fox and likely Fox will make major effort for B1G Tier 1 for this next contract... hmmm....
If I subscribe to the pj, westharthusk train of thought that the GoR is with the television network, well then, I'd say the odds of Kansas and Oklahoma going to the Big Ten are getting better. (There is still the issue with K-State and OkState, however.)
PJ,
Your argument holds up right to the point where you assume someone can leave. ESPN is the beneficiary of the GOR since they purchased the media rights. Why would ESPN let someone walk away? The ACC could make a credible threat that schools were going to leave, which forced ESPN to increase rights fees. In return, ESPN made the contract directly with the individual schools (kinda). There is no threat to leave now, because ESPN, through the ACC, already owns each schools rights for the next 15 years. Show is over.
I am just conjecturing -- along the lines of pj, woomba, westharthusk -- that if the GoR IS tied to the TV networks, then KU and OU going to BTN would likely be from one Fox commodity (Big12) to another Fox commodity (B1G), hence no violation of the GoR (*except* that ESPN does have Big12 Tier 2 rights now...)IIRC, the Big 12 GOR is actually an amendment to the TV contract.
Okay, maybe I am getting a better understanding of Grants of Rights. Given some of the recent commentary:
1) GoR's are particularly important for Conference Networks: B1G has GoR, B1G has BTN (with Fox); Pac-12 signed GoR at the creation of the Pac12 Network; SEC now launching SEC network (ESPN) which *may* incite a GoR; ACC launches "planning" of network (with ESPN) and signs GoR; Big 12 has no conference network, but has GoR, schools retain Tier 3 rights.
2) Television contracts: B1G(through 2015-16): ESPN, BTN(Fox); Pac-12: ESPN, Fox, Pac12N, SEC: CBS, ESPN, SECN(ESPN), ACC: ESPN; Big 12: Fox, ESPN.
So the Big12 is the only conference firmly committed to "no network", yet it has a "GoR". Given that Big 12 Tier 1 is Fox (and Tier 3 is with the schools, most of whom have allied with Fox), that BTN is Fox and likely Fox will make major effort for B1G Tier 1 for this next contract... hmmm....
If I subscribe to the pj, westharthusk train of thought that the GoR is with the television network, well then, I'd say the odds of Kansas and Oklahoma going to the Big Ten are getting better. (There is still the issue with K-State and OkState, however.)
you might be right... just doesn't seem right that a school can leave the conference and still collect revenues for tv rights it no longer owns. especially if they are no longer in that conference.
It would indeed be ironic if a league obtaining GOR for the benefit of TV resulted in a network brokering a team's departure.Yes. This is why the B1G TV contract and the B1G expansion talk are so tightly coupled. If the B1G signs with Fox then they can expand from the B12 but not the ACC. If the B1G signs with ESPN they can expand from the ACC but not the B12. (Assuming the GoRs have no "outs".) And, if the B1G wants to expand, then TV networks may be sweetening their offers by trying to broker some sort of realignment deal; and the B1G itself needs to thoroughly evaluate expansion options before choosing its TV partner.
IF Clemson leaves the ACC, then the ACC gets all revenue generated from Clemson's home games aired on whatever network Clemson's new conference has a deal with.
Is this true?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).
The conference gets the money...the school does not. The conference owns the rights to revenue.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.
Yes. Sorry, I don't have more time... but I've read several articles (that hold up better than the below), stating "Swofford has confirmed that the exit fee is replaced by the GOR."Is this true?