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

[pj]

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.)

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.

It does seem like the B12 is a more likely target for a raid, and that Fox may have a leg up with the B1G.

 

[UConn Dan]

With the GOR, the television rights (for home games) are retained by the Conferences not the Networks. The networks have deals with the conferences, not the teams. The deal is to air X amount of games per year (not specific teams).

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. Of course it would never come to this because if Clemson were to actually leave the conference it would attempt to negotiate a monetary buyout and games to be played later type deal. Let's just assume the buyout is worth half of the GOR value for the remaining contract - is it worth it? Maybe if the new conference pitches in.

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).

 

[Excalibur]

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.

There has to be consideration for the grant -- otherwise you don't have a contract. I haven't seen the contract so I don't know what it may be, but the payout of TV revenue (or some portion of it) seems like a logical place to start.

 

[CL82]

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.

It would indeed be ironic if a league obtaining GOR for the benefit of TV resulted in a network brokering a team's departure.

 

[pj]

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.

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.

 

[CTMike]

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).

Is this true?

 

[Bearcats#1]

Let's say the Texahoma 4 bolt the B12 for the Pac12 or SEC or B1G or whatever leaving WVA, Baylor, ISU, KU, KSU, and TCU meaning the B12 has to add some teams...and most likely they are at this point looking at AAC/MWC teams so, Boise, Cincy, mabye even looking at BYU. Would UCONN be interested in this or would you prefer to stay AAC at that point and hope for a B1G or ACC invite?

 

[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.

The conference gets the money...the school does not. The conference owns the rights to revenue.

Every article describes it the same. Here's just one because I'm busy:

http://www.usatoday.com/story/sport...obbies-florida-state-grant-of-rights/2113527/

The agreement, called a grant of media rights, requires any university leaving the ACC to forfeit all of its television revenue — hundreds of millions of dollars — through the length of the contract.

 

[nelsonmuntz]

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.

 

[UConn Dan]

Is this true?

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."

http://www.cbssports.com/collegefoo...er/22116192/acc-approves-grant-of-rights-deal


Goodbye $50 million exit fee.
The ACC on Monday announced a Grant of Rights agreement among its 15 members.

CBSSports.com reported earlier Monday the ACC presidents were in the process of clearing the Grant of Rights with their departments. The agreement goes to 2026-27, the duration of the league's contract with ESPN.
Unless a member takes the league to court to escape this agreement, the ACC believes a Grant of Rights will protect it from conference realignment poachers. Starting July 1, the ACC's average annual media rights intake per school will surpass $20 million, according to a league source.







The North Carolina-based David Glenn Show reported the news early Monday afternoon.
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.

 

[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.