OT: Florida State to sue ACC over GOR

[UCFBfan]

I will laugh, as will Oregon St and Washington St, if Cal and Stanford were left without a conference again. SMU having to beg to go back to the AAC would make me smile too.

 

[NE Football]

The ACC has a couple of big advantages over the Big 12. First the ACC has its own network that is making a lot of money for both the ACC and ESPN. Second the ACC has several top 20 TV markets. Third the ACC teams are still making more money per team than the Big 12 teams. Fourth, the ACC has Notre Dame and they don’t want the conference to fold.

If and it’s a very big if, a few teams leave the ACC they will be replaced by Big 12 teams. WVU Cincinnati & UCF are easy geographical adds. TCU, TT, KU, KSU, OK St, Arizona & ASU are all good additions to the ACC and the ACCN. It’s not really about the Big 12 versus the ACC, it’s the remaining teams from both conferences simply taking the assets of the better conference.

I think at the end of the day, FSU settles for more performance based payouts from the ACC. Their timing is not good due to the TV providers pulling back. They are not worth a full share in either the B1G or the SEC. They are worth a larger share in the ACC.

 

[NE Football]

No one other than ACC leaders knew about ESPN's 2027 option until the end of last week. I imagine that was in the thinking of the Magnificent 7. We can agree to disagree, but I think there are 7 or 8 of the top ACC FB schools that have been talking to the three Power conferences and lining up their exit scenarios and decision trees. This is not a case of 2 ACC members acting out on their own. Case in point is the PAC implosion. This will be different but similar.

No ACC team is talking with the Big 12. It’s a step down financially and a lot more travel. The B1G and the SEC need a lot more TV revenue to expand, that they don’t have, hence Oregon & Washington getting half shares. That’s less than what the ACC schools will be receiving.

 

[upstater]

You're convinced the ACC is going to survive (and it seems like you think they're in a better position than the Big12). I disagree. Why? 25% of the ACC's tv value comes from 2 schools - FSU and Clemson. It's too top-heavy and not valuable enough overall to survive long term as currently constituted.

In the long term, we're all dead.

13 years is, first of all, a long time.

But second of all, the ACC with a loss of 4 schools is STILL more valuable than the B12. Just go up and down the list and you'll see it.

In 2037, this will be all irrelevant anyway. There will be an entirely new structure.

 

[CTFAN4LIFE]

No ACC team is talking with the Big 12. It’s a step down financially and a lot more travel. The B1G and the SEC need a lot more TV revenue to expand, that they don’t have, hence Oregon & Washington getting half shares. That’s less than what the ACC schools will be receiving.

You know this how?

 

[CTFAN4LIFE]

In the long term, we're all dead.

13 years is, first of all, a long time.

But second of all, the ACC with a loss of 4 schools is STILL more valuable than the B12. Just go up and down the list and you'll see it.

In 2037, this will be all irrelevant anyway. There will be an entirely new structure.

I think you vastly overrate the value of the middle and low end of the ACC FB properties, underrate the Big12 properties, and aren't accurate in saying the ACC's deal is worth far more than the Big12's (ACC schools receive 30m annually). Starting in 2025, the Big12 schools get 50m annually and it contains a pro-rata clause for expansion, with members receiving a full share of the media rights revenue starting in 2025...

You don't see how ESPN can simply decide not to not extend the ACC in 2027? If the top 4-8 schools move on why on earth would ESPN renew in 2027? The schools left would be worth less than half of the current configuration/contract terms. ESPN would at least renegotiate down their annual payout to a remnant league and at most let the whole thing die. So, there is no guaranteed annual share stream in its current state past 2027.

ESPN's option to walk away in 2027 is partially what is causing this all to happen now. The other driver is the expanded CFP and the associated mountain of money that conferences/schools will receive (some are guestimating over a billion dollars annually to be split amongst power conference members). This is a gold rush. And it would make FSU feel more comfortable paying whatever they settle on paying the ACC.

I'm starting to believe that FSU will actually cut checks that are a small fraction of the 500+m. They can negotiate so as to take future monies and pay it to the ACC/schools thereby not being set back huge sums of cash in real-time while being a good threat to be in a 12 team CFP where they would get additional CFP monies for participating.

In this changing landscape, FSU is simply being smart about their future. If the other top 4-8 ACC schools don't do the same, then they're asleep at the switch.

 

[CL82]

It was the option to extend the media deal that was extended, not the GOR. As far as that extension being illegal, we do not have sufficient information to determine this at this point. Time will tell.

If the ACC settles with FSU, it will open the door for others to consider departure and it will have set the price for departure.

This. Uncertainty is one of the supposed strengths of a GOR. One of the main goals of the FSU lawsuit appears to be to quantify the cost of leaving. Once that is quantified, the uncertainty of the GOR goes away and the decision to stay or leave becomes a matter of crunching the numbers to determine when (not if) it becomes viable.

 

[CTFAN4LIFE]

This. Uncertainty is one of the supposed strengths of a GOR. One of the main goals of the FSU lawsuit appears to be to quantify the cost of leaving. Once that is quantified, the uncertainty of the GOR goes away and the decision to stay or leave becomes a matter of crunching the numbers to determine when (not if) it becomes viable.

And FSU is challenging the GOR itself as being a penalty, rather than a quantifiable remuneration of true value. I think they're correct on that and this will help them greatly negotiate a settlement far lesser than what the GOR clause states.

 

[Tfoyle]

Say FSU ends up paying 180M. You think NCST and Pitt will pay that to go to the Big 12? Assuming they get a full share (which they probably wont till the next contract), they would be in the red for the next 6 years. In six years the Big 12 contract is up and if the SEC/BIG plan is to get to 24, the best programs will probably be grabbed diluting the Big 12 (ie the flagship state schools Zone/KU/Colorado/Utah). Honestly the Big 12 and ACC will probably be on the same playing filed after ND, FSU, Clemson, UNC and UVA leave . 2 top teams (Utah vs Miami or TCU vs V Tech) then a bunch of teams in the middle that beat each other up. But the Big 12 and ACC can have great basketball (especially if ACC tries to grab StJ, GTown and Nova).

 

[UConnTrumbull]

But the Big 12 and ACC can have great basketball (especially if ACC tries to grab StJ, GTown and Nova).

Nice trolling

 

[How Sway?!]

People are taking FSUs lawsuit as gospel, as if they didn't have a vested interedt in making the ACC look like the villains.

Also wildly overestimating how many acc schools have landing place in the B1G and SEC. Right now, at most is 3 (FSU, UNC, and UVA). ND just signed a tv deal paying them good money so they aren't leaving. Clemson is a toss up, they don't add anything to the SEC so hard to see them getting an invite. The might get a partial invite to the B1G but that might not be worth it considering the exit fee money that will likely be available in the ACC

 

[CL82]

And FSU is challenging the GOR itself as being a penalty, rather than a quantifiable remuneration of true value. I think they're correct on that and this will help them greatly negotiate a settlement far lesser than what the GOR clause states.

It's debatable. The GOR is a conveyance of broadcast rights it isn't a "penalty "per se that only springs into existence when a school chooses to depart the conference. Indeed, there is no dollar amount associated with GOR, which is part of the difficulty in litigating what its valuation. Grants of Rights have been found to be enforceable In other areas. It is just an odd fit to broadcast rights.

I'm not sure that this is a great analogy, but let me throw it out there. I agree to lease a certain piece of property from you for 30 years for a lease payments with a built-in escalator clause. I build a building on the property and sell the use of it to a third-party. At some point during that lease term you decide that you find out that the third-party is paying other people more money to lease other buildings and you decide that can make more money leasing your property to someone else. The fact that I want to continue to use the property under our existing terms isn't a penalty to you. It is just what we agreed to.

 

[CTFAN4LIFE]

People are taking FSUs lawsuit as gospel, as if they didn't have a vested interedt in making the ACC look like the villains.

Also wildly overestimating how many acc schools have landing place in the B1G and SEC. Right now, at most is 3 (FSU, UNC, and UVA). ND just signed a tv deal paying them good money so they aren't leaving. Clemson is a toss up, they don't add anything to the SEC so hard to see them getting an invite. The might get a partial invite to the B1G but that might not be worth it considering the exit fee money that will likely be available in the ACC

Of course there's no shoe-ins in terms of ACC schools to the SEC or B1G, but there are several shoe-ins to the Big12. When you combine them (FSU, Clemson, UNC, Miami, NC St, VA, VA St, Louisville, Pitt, and then a reluctant ND) you can fairly easily hit the magic number of 8 to dissolve the conference. I believe that dismisses the GOR. I think there has been a building consensus amongst the ACC's top brands over the past year to do this before the 2027 ESPN renewal clause. Hence, the Magnificent 7 this past summer. It makes the top half of the conference and the media partners all content because it creates stability and value for everyone in the top half and ESPN can cut out overpaying for the bottom half of the league.

It sucks to be in the bottom half for sure, but they can rebuild and become a top tier G5 with some access to the CFP and TV revenue that is more in line with their true value.

 

[upstater]

I think you vastly overrate the value of the middle and low end of the ACC FB properties, underrate the Big12 properties, and aren't accurate in saying the ACC's deal is worth far more than the Big12's (ACC schools receive 30m annually). Starting in 2025, the Big12 schools get 50m annually and it contains a pro-rata clause for expansion, with members receiving a full share of the media rights revenue starting in 2025...

You don't see how ESPN can simply decide not to not extend the ACC in 2027? If the top 4-8 schools move on why on earth would ESPN renew in 2027? The schools left would be worth less than half of the current configuration/contract terms. ESPN would at least renegotiate down their annual payout to a remnant league and at most let the whole thing die. So, there is no guaranteed annual share stream in its current state past 2027.

ESPN's option to walk away in 2027 is partially what is causing this all to happen now. The other driver is the expanded CFP and the associated mountain of money that conferences/schools will receive (some are guestimating over a billion dollars annually to be split amongst power conference members). This is a gold rush. And it would make FSU feel more comfortable paying whatever they settle on paying the ACC.

I'm starting to believe that FSU will actually cut checks that are a small fraction of the 500+m. They can negotiate so as to take future monies and pay it to the ACC/schools thereby not being set back huge sums of cash in real-time while being a good threat to be in a 12 team CFP where they would get additional CFP monies for participating.

In this changing landscape, FSU is simply being smart about their future. If the other top 4-8 ACC schools don't do the same, then they're asleep at the switch.

You're comparing apples to oranges here. You've limited the ACC to only TV money while the $50m B12 figure lumps in the football playoff money.

Assuming the football playoff money is equal for everyone (but actually should be better for the ACC because they have better football and fewer teams), then we should only be looking at TV money.

Here's something you might not know: the ACC money increases every year. The B12 money is level.

As for the opt-out in 2027, you've clearly not understood what I wrote. Everyone knows about the opt out. We're saying why would each school risk hundreds of millions to trigger the end of the conference? 8 schools aren't joining the SEC/B1G. We're all proceeding here on the absolute certainty that if the conference disbands there is no way ESPN reups with the remaining schools at these levels.

In other words, the opt out is totally irrelevant to the conversation. Either they stay together or they don't. ESPN either pays all the current schools in the current setup or the deal totally unravels.

 

[upstater]

This whole thread needs a reset. Focus on ESPN. They are effectively the counterparty.

They agreed to provide these schools with an incredible amount of money, more than the B12 and Pac12 schools, for 2 decades.

In return, they required total ownership of the TV rights.

Florida State agreed to this by taking the money. The money would not have been as great had they entered into some other kind of agreement. The exit fees are irrelevant to all this. The TV rights are the total game.

This is just a deal with the devil; you can't squirt out of it.

 

[Ha Who]

This is an emergency. Time for the ACC to call

Gene DeFilippo​

 

[Sea Goat]

The ACC has a couple of big advantages over the Big 12. First the ACC has its own network that is making a lot of money for both the ACC and ESPN. Second the ACC has several top 20 TV markets. Third the ACC teams are still making more money per team than the Big 12 teams. Fourth, the ACC has Notre Dame and they don’t want the conference to fold.

If and it’s a very big if, a few teams leave the ACC they will be replaced by Big 12 teams. WVU Cincinnati & UCF are easy geographical adds. TCU, TT, KU, KSU, OK St, Arizona & ASU are all good additions to the ACC and the ACCN. It’s not really about the Big 12 versus the ACC, it’s the remaining teams from both conferences simply taking the assets of the better conference.

I think at the end of the day, FSU settles for more performance based payouts from the ACC. Their timing is not good due to the TV providers pulling back. They are not worth a full share in either the B1G or the SEC. They are worth a larger share in the ACC.

I see a lot of problems with your analysis. IMO, FSU is gone and it's only the number we're talking about. In addition, it appears that there really is only a deal until 2027. In addition, there are more rumblings from the so-called "Magnificent Seven" (FSU, Clemson, UNC, NCSt, UVA, VT, UM) to leave also. It appears, the ACC is a "dead conferences walking" . It will never be in the Super Two Conference category. The SEC and the BIG will be paying more than double to their members than the ACC will pay. The recent effort to become the A&PCC by adding 3 geographically disconnected schools evidences more desperation rather then shrewd conference planning.

Months ago I suggested we'll come down to a hard core group of 36-40 CFP schools, most of these are in the Super Two conferences (BIG and SEC) already. I see this as more likely now. Maybe that number jumps to 50 by adding the ACC's "Magnificent Seven", plus ND a couple of one-offs and a couple of current Big 12 members. After that, the pickings get slim.

The remnants of the ACC, including under achievers, BCU,Syra, Pitt, WF etc, will be trying to preserve a conference that is (and will be) weak in football and other than Duke weak in hoops. This is where the rubber meets the road. How valuable in any sport is BCU or Syra to a conference? Let's be real, those schools have been riding coattails to a $30mm payout per year. This especially pissed off FSU and it likewise makes the rest of the "7" pissed off too. I think the TV markets angle is overdone - who in Boston tunes in at any time to watch BCU play football or BB? Even in Boston, college football fans will tune in a great SEC matchup vs. BCU playing anybody. If anything, college sports in Boston is driven by hockey. Getting eyeballs and markets is the end all? That catches up to you when your product doesn't attract viewership...

 

[CTBballfan243]

BCU will try and leverage their premier hockey program to get into the B1G. Maybe ND will want another small religious institution in the B1G when they eventually are forced to join.

 

[Sea Goat]

BCU will try and leverage their premier hockey program to get into the B1G. Maybe ND will want another small religious institution in the B1G when they eventually are forced to join.

Hockey doesn't move the needle. BCU must earn their way in with football and/or basketball

 

[dayooper]

BCU will try and leverage their premier hockey program to get into the B1G. Maybe ND will want another small religious institution in the B1G when they eventually are forced to join.

Yeah, I don’t see that happening. Maybe a decade ago but I don’t think they bring enough to keep what the Big10 has with their contract. I believe there are 4 schools that can potentially can break even on their media deal and those are FSU, ND, UNC and maybe Clemson. That’s it. No one else moves the needle. The SEC might be able to bring in UVA or VT as well, but I’m not even sure on either of those schools.

 

[upstater]

I see a lot of problems with your analysis. IMO, FSU is gone and it's only the number we're talking about. In addition, it appears that there really is only a deal until 2027. In addition, there are more rumblings from the so-called "Magnificent Seven" (FSU, Clemson, UNC, NCSt, UVA, VT, UM) to leave also. It appears, the ACC is a "dead conferences walking" . It will never be in the Super Two Conference category. The SEC and the BIG will be paying more than double to their members than the ACC will pay. The recent effort to become the A&PCC by adding 3 geographically disconnected schools evidences more desperation rather then shrewd conference planning.

Months ago I suggested we'll come down to a hard core group of 36-40 CFP schools, most of these are in the Super Two conferences (BIG and SEC) already. I see this as more likely now. Maybe that number jumps to 50 by adding the ACC's "Magnificent Seven", plus ND a couple of one-offs and a couple of current Big 12 members. After that, the pickings get slim.

The remnants of the ACC, including under achievers, BCU,Syra, Pitt, WF etc, will be trying to preserve a conference that is (and will be) weak in football and other than Duke weak in hoops. This is where the rubber meets the road. How valuable in any sport is BCU or Syra to a conference? Let's be real, those schools have been riding coattails to a $30mm payout per year. This especially pissed off FSU and it likewise makes the rest of the "7" pissed off too. I think the TV markets angle is overdone - who in Boston tunes in at any time to watch BCU play football or BB? Even in Boston, college football fans will tune in a great SEC matchup vs. BCU playing anybody. If anything, college sports in Boston is driven by hockey. Getting eyeballs and markets is the end all? That catches up to you when your product doesn't attract viewership...

A couple questions about your post:

1. Why does 2027 matter at all? ESPN can only opt out if 8 leave. But if 8 leave, that dissolves the conference. No one believes ESPN would re-up with the remaining members. Therefore, 2027 is irrelevant. Either the ACC exists in 2027 or it doesn't. Either 8 leave or they don't. If 8 don't leave, 2027 is totally irrelevant.

2. How many schools get into the SEC and B1G? 8? If it's less than 8, then explain why any school would take LESS money to go into the B12 AND, in addition, lose its NCAA credits, football playoff credits, and pay exit fees? That's a huge loss of money. Unless of course they all do it together, then that gets rid of the exit fees, but they still have losses! They make less money than they will make in the ACC, and surely in the dissolution they'd lose credits.

 

[John]

Hockey doesn't move the needle. BCU must earn their way in with football and/or basketball

Basketball barely moves the needle.

 

[History Geek]

I’m think the recent adds of Calford and SMU were are proactive step to start setting up the ACC remnants with a coast to coast more eggheady G5 conference that would be on par with the Big 12. Let the P2 do their thing and complete with the Big 12.

 

[Tfoyle]

Yeah, I don’t see that happening. Maybe a decade ago but I don’t think they bring enough to keep what the Big10 has with their contract. I believe there are 4 schools that can potentially can break even on their media deal and those are FSU, ND, UNC and maybe Clemson. That’s it. No one else moves the needle. The SEC might be able to bring in UVA or VT as well, but I’m not even sure on either of those schools.

I think UVA is the 4th school to get UNC, FSU and Clemson in the SEC. After those 4 are in the SEC, the SEC owns the south and any addition by BIG is just second place. Before anyone say FSU and Clemson adds nothing based on the state, SEC already has A&M, Miss St and Auburn. Having a second school in a state is not a huge issue (only maybe to SC and UofF).

 

[upstater]

I’m think the recent adds of Calford and SMU were are proactive step to start setting up the ACC remnants with a coast to coast more eggheady G5 conference that would be on par with the Big 12. Let the P2 do their thing and complete with the Big 12.

It was done to shake some more $$ from ESPN's pockets in order to give that money to FSU and Clemson in the hopes they'd stop all their whining and moaning. No other reason.