Dennis Dodd: Big Ten expansion not done...stay tuned | Page 6 | The Boneyard

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

Status
Not open for further replies.
Something also to chew on. My understanding is that the GORs only apply to home games and not to away games. So, it is possible for half of a school's games to not be included in a GORs.

So, if FSU and Clemson decided to leave the ACC, only their home games would be included under the GORs. Do you think ESPN would keep paying the same amount to the ACC if they lost half of FSU and Clemson's games? The same analysis can be applied to Texas and the Big 12.

The lawyers that drafted these contracts make about $1,200 an hour, and all graduated Top 5 undergrad, Top 5 law school. Any fantasy "out" you can come up with, they were miles ahead of you.
 
One more point. Since none of us have read a GOR agreement or ND's agreement with the ACC, we are all speculating. Does the ACC GOR agreement require an ACC Network? Can ND join another conference with minimal pain? Etc.

Finally, although I am not a lawyer, I took some business law classes. My understanding is that a plaintiff must prove that breach of a contract caused a loss. In the case of Maryland, the ACC got an increased contract and replaced them with Louisville. Hard to see replacing Maryland with Louisville (and ND) with an increased contract for the ACC resulted in a loss for the ACC schools. Clearly, losing schools such as Miami, VT, Syracuse,... Resulted in a loss for the Big East, so you can't compare the situations.
 
Something also to chew on. My understanding is that the GORs only apply to home games and not to away games. So, it is possible for half of a school's games to not be included in a GORs.

So, if FSU and Clemson decided to leave the ACC, only their home games would be included under the GORs. Do you think ESPN would keep paying the same amount to the ACC if they lost half of FSU and Clemson's games? The same analysis can be applied to Texas and the Big 12.
That's a good point Jim. You can only make of grant of that you actually own.
 
The lawyers that drafted these contracts make about $1,200 an hour, and all graduated Top 5 undergrad, Top 5 law school. Any fantasy "out" you can come up with, they were miles ahead of you.

Since you graduated from a "top 5" undergrad and "top 5" law school, I guess I should defer to you!

If that is your criteria for expertise, I am sure that each school, the conference, and the media networks each had "top 5" lawyers looking out for their interests and know the ins and outs of the contracts. But, I don't and neither do you.

Based on my business career as an investor, I have seen many contracts much larger than college football media rights and my experience has been that the maximum penalties in contracts have almost never been upheld. That doesn't mean that the conference GORs wouldn't be upheld as they haven't been tested, but, Nelson, you have no idea and you are not an expert and I am not as well, so please don't pretend you are.
 
It seems to me people are beginning to pick up more and more on how valuable UConn really is. Even Ohio State fans. We have to market ourselves aggressively amongst other B1G fanbases.
 
It seems to me people are beginning to pick up more and more on how valuable UConn really is. Even Ohio State fans. We have to market ourselves aggressively amongst other B1G fanbases.


Maybe we could take out ads on their message boards?
 
.-.
Even if you look at UConn, Syracuse, and BC's recruiting over the past 5-6 years you see that only about half of the FB recruits for these teams are from the NY&NE area (even less for BC) despite there being 34M people there. That's not "plenty of HS athletes".

UConn has potential but you're better off just not mentioning recruiting grounds - it only compares semi-favorably to Kansas (and they'll argue that they draw MO similarly to how UConn will count NY&MA)

Look at the number of NFL players from CT compared to Kansas and some other states. Maybe then you will just shut up
 
It seems to me people are beginning to pick up more and more on how valuable UConn really is. Even Ohio State fans. We have to market ourselves aggressively amongst other B1G fanbases.

Are B1G fan bases making the decisions on conference realignment now?
 
Look at the number of NFL players from CT compared to Kansas and some other states. Maybe then you will just shut up


So when looking at college football recruiting we should look at a snapshot of current NFL rosters instead of the # of D-1 prospects coming out of the state. Got it.
 
The lawyers that drafted these contracts make about $1,200 an hour, and all graduated Top 5 undergrad, Top 5 law school. Any fantasy "out" you can come up with, they were miles ahead of you.

More like $900 an hour. :)
 
.-.
The lawyers that drafted these contracts make about $1,200 an hour, and all graduated Top 5 undergrad, Top 5 law school. Any fantasy "out" you can come up with, they were miles ahead of you.

I only went to a Top 25ish law school and a Top 20ish (though admittedly it was ranked much worse back then -- not even #1 in NEngland) state public univ for undergrad, so now I finally understand why I couldn't crack $400 per hour prior to leaving private practice.

Mystery solved!! Thanks Nelson!
 
Are B1G fan bases making the decisions on conference realignment now?
Of course.

Whatever the deal, the fans are definitely mentioning us quite a bit and seem more open to the possibility of us joining the B1G than I've ever seen.
 
Have you ever read a contract in your entire life?


Are you talking about the ones I've written, or ones that others have written? If you must know, the answer is "both."

Ironically, your snarky response was exactly my point: have YOU read the ACC's Grant of Rights, in your entire life?

This may come as a surprise to you, but not every contract is legal, valid or binding.
 
The lawyers that drafted these contracts make about $1,200 an hour, and all graduated Top 5 undergrad, Top 5 law school. Any fantasy "out" you can come up with, they were miles ahead of you.

The lawyers that read and accepted these contracts are at least equals to those of ESPN and FOX. I would argue that the conference and school lawyers have had the upper hand on ESPN and FOX. Remember that ACC contract that paid only $12 million a year per school. It pays $20 million a year per school now with the addition 3 1/2 (minus 1) teams. Does anyone really think that the additions of Pitt, Cuse, Ville, and 2-3 ND football games (and subtract Maryland) are worth $150+ million dollars a year? I don't. If the contract was botched so badly, do you really have faith that the GOR is bullet proof without a single "fantasy out"? The answer is NO, because every contract has termination clauses included that describe how to define monetary damages.

Although I believe a GOR could be challenged in court and damages would be found to be equal to the loss of revenue from the departure, I do not believe a conference will challenge the GOR as it is likely the same legal document binding its own conference.
 
I only went to a Top 25ish law school and a Top 20ish (though admittedly it was ranked much worse back then -- not even #1 in NEngland) state public univ for undergrad, so now I finally understand why I couldn't crack $400 per hour prior to leaving private practice.

Mystery solved!! Thanks Nelson!
Sorry Nelson. I have no dog in this fight, but RMoore has a valid point. I've read plenty of contracts that start iron clad and then enter negotiation. You wind up with a termination clause that says that upon termination by a member something happens (such as the league retains media rights and the member forfeits its share of profits).15 pages later you have a clause (sometimes with different formatting) that discusses some condition that a party insists on. It reads "notwithstanding the termination provision discussed in paragraph 12, any institution may terminate its membership if ________. These agreements have been drafted by $1,000 per hour lawyers (really their $500 per hour associates). I admit that I don't think I've dealt with $1,250 lawyers.

I'm not saying such language in this agreement, but considering that people were surprised that the ACC got the GOR done, you'd have to see the agreement to know what's in there.
 
If an ACC school tries to default on a contract in order to get out of it, two things will happen:

1) They will likely be liable for any damages such as forfeited games or costs of scheduled opponents to find other games, plus likely stipulated penalties within the ACC bylaws; and

2) They will still be bound under the GOR.

Do you really think that you can sign a contract, deliberately fail to perform your side of the contract, and then walk away when the other party gets mad? That isn't how contracts work.

Nelson, the thesis is that an ACC team can depart for a new conference WITHOUT defaulting on the GoR and while STILL PERFORMING on the GoR. The GoR assigns their media rights to the ACC and money to the school in exchange, and both parties can still perform regardless of conference affiliation.

To be clear, I don't believe any ACC teams are leaving. Why raise the exit fee and sign the GoR if they weren't committed to the ACC; and they had ample time to explore alternatives before making those moves. I think the ACC schools knew their options and decided the ACC was best for them. So there won't be any departures in the near term.

But until the terms of the contract are released, we can't know from the simple words "Grant of Rights" that the GoR inhibits conference realignment. It depends on the specific terms of the contract. A minimal GoR by itself doesn't do much to inhibit realignment.
 
.-.
Something also to chew on. My understanding is that the GORs only apply to home games and not to away games. So, it is possible for half of a school's games to not be included in a GORs.

So, if FSU and Clemson decided to leave the ACC, only their home games would be included under the GORs. Do you think ESPN would keep paying the same amount to the ACC if they lost half of FSU and Clemson's games? The same analysis can be applied to Texas and the Big 12.

Jim, FSU and Clemson can't sell the rights to "road" games because road games by definition are someone else's home games which are already owned.
 
I wish every President of every ACC school would get chlamydia, but wishing it to be so doesn't mean it will happen. Just like wishing the GOR could be broken doesn't mean it will happen.


LOL!!!!!!!
 
To chime in with WestHartHusk, yea, away games are owned by the away school (or conference), not the visiting school. Away games are never part of the visiting school's GOR obligation (unless the home team is a member of the same conference, of course).

For the ACC, all home games are presumably subject to the GOR. Because of this (and the$50M buy-out), suddenly the ACC is a less attractive conference for raiding than is the B12.

For the B12, one home football game (and 7 basketball games) is not subject to the B12 GOR because in the B12 each school continues to own one of its so-called Tier 3 football games. This game, however, is determined by ESPN and is not the choice of the school. If a D4 comes about, and if all games in the D4 must be against other D4 schools, then this B12 Tier 3 football game would likely have some excellent value.

Retaining ownership of the one Tier 3 game is precisely why the B12 came back into the cross-hairs of realignment once the ACC passed its GOR to go along with the prohibitively expensive $50M buy-out. It would appear that the B12 might be the most suspect of the GOR conferences, due to being able to lend a new conference ownership of one home football game and all away games, but again, a high degree of speculation attaches since no one has yet to post the exact language of any conference GOR for analysis.

At least at the higher levels of B12 schools -- the "name state schools"; namely: Texas, Oklahoma, and Kansas -- there may be interest in them by other conferences if they can be had by moving to another conference without default under the B12 GOR, along with continuing to perform under the GOR in the new conference, without future revenue disbursement forfeiture. Tell you what: If I ran the B1G, and if I could nail down the NE corridor by adding UConn, and then move to 18 by adding Texas, Oklahoma, and Kansas, I would darn sure do so in the proverbial New York minute.

Furthermore, if there's a D4, then D4 could easily move for 13 regular season football games prior to the playoff beginning. If the B1G were at 18, and if the ACC faltered at all, then, if the B1G wanted to, it could move to 20 or 24 schools in a 4-pod league, play 9 or 11 conference games (thus racking up conference $), 4 or 2 OOC games, and it wouldn't matter if a school went undefeated, since the idea would be to make the playoffs, not necessarily going undefeated. Talk about raking in the dough, plus you could pretty much hem in the SEC on both its western and eastern flanks.

In the meantime, yea, I know: UConn's a helluva lot more interested in finding a permanent home in one of the P5 conferences, with a whole lot less interest in some grandiose "take over college football" scheme suggested by some anonymous internet poster.
 
Jim, FSU and Clemson can't sell the rights to "road" games because road games by definition are someone else's home games which are already owned.

Yes, but if FSU joined the Big 12 for example, the media rights of all FSU conference road games would be held by the Big 12 since they are also home conference games. Networks pay for match ups and FSU as an opponent would be more valuable than say Iowa State. (Also, it is not clear what happens with bowl game TV revenues or playoff revenues as we haven't read the contracts.) Thus, it is possible that even if a school with a GORs joined a new conference (especially if that school is in the ACC with an ~$20 million conference revenue model), they might actually see an increase in conference revenues from TV revenues, bowl games, playoffs,... We'll see what the Big 10 gets when their media rights come up as it is possible that they will be making > 2x the ACC.

I think the key issue is that all contracts have outs and the key to breaching contracts are damages. For example, I don't think Maryland will pay anywhere close to $50 million for leaving the ACC as the ACC has replaced Maryland with Louisville and negotiated a better TV contract for more money. Where are the damages?
 
.-.
The amateur Johnny Cochrane's on this board continue to make up "outs" and then attack me or others that point out the unlikelihood of said outs existing with "you don't know". You are right, i dont KNOW. I also don't KNOW that I won't be having a threesome with two supermodels this weekend, but I am not booking a suite at the Plaza just in case.

You find holes in contracts for 2 reasons:

1) they are breaking new legal ground. Investment contracts and especially joint ventures are custom contracts, so you often find holes in those contracts because stuff comes up that no one anticipated. A GOR is a boilerplate media rights agreement with a few minor tweaks. These contracts have existed for decades and been very well litigated. A mid level associate could bank this out in a few days (although the partner will bill for a couple of weeks).

2) Someone wants the out in the contract. In a lot of deals, one party doesn't want to be locked up. But in this case, every school was more worried about others leaving than they were about keeping their options open. Every side of the deal was trying to close loopholes.

It is possible that there is a hole in the agreement, but based on what we know, I wouldn't be booking a suite at the Plaza.
 
I only went to a Top 25ish law school and a Top 20ish (though admittedly it was ranked much worse back then -- not even #1 in NEngland) state public univ for undergrad, so now I finally understand why I couldn't crack $400 per hour prior to leaving private practice.

Mystery solved!! Thanks Nelson!

Seriously? How do you feed your children?
 
The amateur Johnny Cochrane's on this board continue to make up "outs" and then attack me or others that point out the unlikelihood of said outs existing with "you don't know". You are right, i dont KNOW. I also don't KNOW that I won't be having a threesome with two supermodels this weekend, but I am not booking a suite at the Plaza just in case.

You find holes in contracts for 2 reasons:

1) they are breaking new legal ground. Investment contracts and especially joint ventures are custom contracts, so you often find holes in those contracts because stuff comes up that no one anticipated. A GOR is a boilerplate media rights agreement with a few minor tweaks. These contracts have existed for decades and been very well litigated. A mid level associate could bank this out in a few days (although the partner will bill for a couple of weeks).

2) Someone wants the out in the contract. In a lot of deals, one party doesn't want to be locked up. But in this case, every school was more worried about others leaving than they were about keeping their options open. Every side of the deal was trying to close loopholes.

It is possible that there is a hole in the agreement, but based on what we know, I wouldn't be booking a suite at the Plaza.


If these things are truly "boilerplate," there must be another copy of one laying around somewhere, right? I mean, if Grant of Rights contracts have "existed for decades," can you find one? If they've been "very well litigated," can you give me a cite to just one case regarding a Grant of Rights contract for an athletic conference in which an institution gives up its rights to televise performances within venues under their control even when they're not a part of the conference?

I'm guessing you'll go 0-for-3 on those requests.

Here's the one thing we know about conference realignment: every institution is always looking out for itself, as it should, and that's why I'm pretty confident that these GORs are not the iron-clad shackles that you think they are.
 
There's still confusion over what the "Rights" are in a Grant of Rights?

It's Broadcast Rights.

The right to broadcast the games is a powerful asset. If a school decides to go to another conference, the conference it leaves can choose not to sell the broadcast rights to the new conference, effectively locking the school out of all TV exposure until the Grant of Rights expires. The old conference is still required to pay full share for those rights, but they can choose not to use them. If they were to not pay that team's share of the TV contract, they would also forfeit the broadcast rights.

And it doesn't take a lawyer, or even direct knowledge of the contract verbiage, to understand.

An analogy is automobile insurance. You get a card with an expiration date well into the future, but if you don't pay the monthly fee, it doesn't mean you're still covered until that date. A Grant of Broadcast Rights works the same way, a conference owns them as long as they pay the school the annual broadcast fee.

No team in the ACC aside from Notre Dame would challenge a Grant of Rights. Notre Dame still owns the broadcast rights to its football content, so the lack of exposure threat only exists for basketball.

As for the "Notre Dame must join only the ACC until 2026" clause, I doubt that would stand up in court.
 
Yes, but if FSU joined the Big 12 for example, the media rights of all FSU conference road games would be held by the Big 12 since they are also home conference games. Networks pay for match ups and FSU as an opponent would be more valuable than say Iowa State. (Also, it is not clear what happens with bowl game TV revenues or playoff revenues as we haven't read the contracts.) Thus, it is possible that even if a school with a GORs joined a new conference (especially if that school is in the ACC with an ~$20 million conference revenue model), they might actually see an increase in conference revenues from TV revenues, bowl games, playoffs,... We'll see what the Big 10 gets when their media rights come up as it is possible that they will be making > 2x the ACC.

I think the key issue is that all contracts have outs and the key to breaching contracts are damages. For example, I don't think Maryland will pay anywhere close to $50 million for leaving the ACC as the ACC has replaced Maryland with Louisville and negotiated a better TV contract for more money. Where are the damages?

The real question on the GOR is not whether it would be enforced in the general sense, it is whether any court would order specific performance. So in your hypo, does the ACC literally get to broadcast FSU home games on ESPN (and does it reallt want to?) or does it instead get a measure of damages that approximates the value of those broadcasts. My guess is that the courts would not require specific performance and so the new conference would indeed have the broadcast rights, but would pay damages to the prior conference, each year during the GOR.

This is important for two reasons, it means that the new conference would in fact get the games it wants on its network, even if it wouldn't get a real financial boost from those games. Second, it means that each school could argue the damages attributable to the value of its rights. So if Iowa State broke the Big 12 GOR, they could claim that the damages would not be equal to a pro-rata share of the Big 12 contract, but instead, would be much less. Texas' would be much more, though they wouldn't argue that obviously. Additionally, all commercial contracts have an implied duty to mitigate damages. So a replacement school (like Louisville for Maryland) would potentially reduce the damages.

So will any school challenge it? It isn't really in the interest of the conferences for that to happen. My guess is that if we see movement from a GOR conference, it will be negotiate in advance. Like Doc Rivers to the Clippers. So if the Big Ten wants Kansas, they would negotiate with the Big XII in adance to purchase the media rights for KU.
 
I think the key facts about the GoR are this:

1) A team can change conferences under a GoR agreement, the GoR does not prohibit that, and the GoR obligations can still be performed by both parties after the realignment, so there is no default of a GoR upon conference change. Continuation of the GoR does not leave the departing school worse off, and if the destination conference is perceived to be sufficiently better that the two parties are willing to lose a little financially as they wait for the GoR to expire, they can operate for years under the former conference's GoR. All it means is that if an ACC school earning $20 mn/yr left the ACC for the B1G paying $35 mn/year to full members, they might get $20 mn/yr from the ACC (still) and $3 mn/yr from the B1G (or some nominal payment) until the GoR expires. The school is better off. The conference doesn't care, the $20 mn/yr is paid by ESPN. ESPN doesn't care much, it now has the departing schools B1G games which may be worth as much or more to it as their ACC games. The new conference gets the new team's in-conference road games and has full rights after the GoR expires.

2) The value of the media rights is diminished after a conference change, and ALL PARTIES (the conference and its TV network assignee that own the rights, and the school that departed, and the destination conference and its TV network assignee) can make more money if the GoR is terminated, with appropriate monetary transfers to compensate the losers. Collectively they have an incentive to renegotiate the contract. There is a high chance the GoR would be renegotiated.

3) The purpose of the GoR is a pass-through of rights to the school's media to a TV network. The GoR assigns media rights to the conference and the conference in a separate but aligned agreement sells them to a network (ACC to ESPN, for instance). The GoR is timed to terminate at the same time as the conference-network agreement because the purpose of the GoR is to give the network confidence it is not going to acquire rights to an "ACC" but lose rights to UNC/FSU/Clemson/Duke games when they move to a Fox-sponsored league. It assures that the network has rights to the same collection of schools throughout the duration of the contract.

4) Because this is its purpose, there is no reason for schools to have agreed to punitive clauses that cause them to forfeit revenue from their media rights when they change conferences. That would create a windfall for the former conference's TV network. The purpose of the agreement was not to create a windfall for someone in the event of realignment, but to prevent a catastrophic loss for the network in the event of realignment. I am not going to believe that schools agreed to such a thing until some informed official states that that is the case. None have.

5) I see no reason why the validity of a GoR agreement would be challenged in court. Maryland has an exit fee case against the ACC because the $50 mn exit fee was imposed without Maryland's consent, effective immediately, at the very time Maryland was negotiating its departure. That's totally different than in a GoR where it is clearly entered into voluntarily and with full knowledge of the consequences. The outcome would be negotiated.

6) Given that a departure from a GoR conference would not prevent a GoR from fulfilling its function, I don't understand the claim of Internet prognosticators that a GoR conference would never raid another GoR conference because they fear that would impair their own GoR. No, the GoR would not be impaired and the purpose of the GoR, extracting more money from their TV network partner, would still be fulfilled.
 
.-.
Status
Not open for further replies.

Forum statistics

Threads
168,329
Messages
4,564,412
Members
10,464
Latest member
Rollskies27


Top Bottom