OT: Florida State to sue ACC over GOR

[billybud]

CL, you could be correct. The thing is nobody has ever had to value what an equitable buyout would be on one of these.

My thought process (which I've posted in greater detail a couple times over the years) would be to start at present value of future cash flows. If there is no contract covering the remainder of the GOR, logically it shouldn't cost a lot to buy your way out of it.

One thing that emboldened FSU/Clemson is that when the lawyers finally saw the ESPN agreement, they saw that the ACC was only obligated to ESPN for a Member's media rights "while that program is a member of the conference".

There has been a mechanism to resign the conference in place in the Constitution and Bylaws...give notice and pay the EXIT FEE.

The ACC had been saying that the conference "owned" these rights though 2036 regardless if a school is still in the conference. FSU/Clemson now believe that was a misrepresentation.

The GOR is clear that the "rights" are only ceded to the conference as necessary to perform the ACC's obligation to ESPN. FSU and Clemson are prepared to pay the EXIT FEE outlined and give notice.

 

[billybud]

There is a mechanism in the ESPN Agreement for ESPN to adjust the payment to the ACC if the conference falls below 15 members...the Composition Clause. Thus Cal-ford, SMU added.

The proverbial fly in the ointment ? Networks are not as free with the money as in the past....Will anyone pay for an FSU or Clemson ?

 

[nelsonmuntz]

CL, you could be correct. The thing is nobody has ever had to value what an equitable buyout would be on one of these.

My thought process (which I've posted in greater detail a couple times over the years) would be to start at present value of future cash flows. If there is no contract covering the remainder of the GOR, logically it shouldn't cost a lot to buy your way out of it.

Isn’t a GOR more like a sale contract? If you sell your house, it is hard to go back and claim you didn’t sell it 8 years later because you think someone else will pay more.

The only way I see out of the GOR is ESPN terminating the tv contract. If you sell something contingent on a series of payments, and the buyer stops making the payments, you usually get it back.

 

[FfldCntyFan]

Isn’t a GOR more like a sale contract? If you sell your house, it is hard to go back and claim you didn’t sell it 8 years later because you think someone else will pay more.

The only way I see out of the GOR is ESPN terminating the tv contract. If you sell something contingent on a series of payments, and the buyer stops making the payments, you usually get it back.

I could well be wrong but I imagine it would be viewed closer to a long term commercial lease than a home purchase. One glaring exception being the lease would have specific language on what the cost would be to terminate early.

Also, if the GOR is viewed as indentured servitude, then it can be viewed by the courts as being excessive, which would make it easier to break. This is why the ACC said that they would be willing to negotiate a buyout.

There will be quite a bit of conjecture until this is resolved as there really is nothing to confidently compare it to. I do also believe however that the lower the media payments guaranteed to the ACC over the remainder of the GOR, the lower the cost of buying out will be.

 

[Kolumbo]

Isn’t a GOR more like a sale contract? If you sell your house, it is hard to go back and claim you didn’t sell it 8 years later because you think someone else will pay more.

The only way I see out of the GOR is ESPN terminating the tv contract. If you sell something contingent on a series of payments, and the buyer stops making the payments, you usually get it back.

I think a GOR is more like a lease agreement. I'm not going to continue to give you some economic benefit if I move out. If I break the lease, I'll pay the penalty, but I'm not paying you on an ongoing basis. At some point someone has to step in and say the contract was so egregious because the future is too uncertain in the NCAA world.

The ACC members should agree to dissolve the conference and let the chips fall where they may. Your true value will determine where you end up. Certainly won't happen, but it should.

 

[SoFla Steve]

Saw this on the Cuse board. It's a bit long so skip at least the first 5:00 of banter. Interesting especially when they talk about CF from the fans' perspective.

 

[nelsonmuntz]

I could well be wrong but I imagine it would be viewed closer to a long term commercial lease than a home purchase. One glaring exception being the lease would have specific language on what the cost would be to terminate early.

Also, if the GOR is viewed as indentured servitude, then it can be viewed by the courts as being excessive, which would make it easier to break. This is why the ACC said that they would be willing to negotiate a buyout.

There will be quite a bit of conjecture until this is resolved as there really is nothing to confidently compare it to. I do also believe however that the lower the media payments guaranteed to the ACC over the remainder of the GOR, the lower the cost of buying out will be.

I used a home sale as an example because in the case of media rights, they are being sold for a period of time. Once sold, they are gone. There wouldn't be a media industry of sellers could un-sell their media rights every time a better off came along. Friends doesn't get to jump back and forth between MAX and Netflix every week in an ongoing bidding war.

 

[Vowelguy]

The ACC members should agree to dissolve the conference and let the chips fall where they may.

Why on earth would anyone not named FSU/Clem/UNC (and 1 or 2 others) agree to that?

 

[freescooter]

I read something that suggested that the GOR only applies to home games since only the home team owns the rights to a game. So if FSU plays Ohio State at Columbus, it collects a visitors payment but it has no rights to the game to grant. For conference games it doesn’t matter because both teams have granted rights to their games to the league. So if you could set a schedule where you play say 6 road games plus a neutral site game, where again you get a fee rather than the rights to the game, you could theoretically reduce the value of your GOR. If you assembled a 5 year schedule where you had say only 4 home games, the value is greatly reduced. It might not be ideal but if you joined the SEC under a deal to play 5 road games/year under the guise of paying off the entry fee, for example, plus played a neutral site game and another road game you could reduce your GOR exposure maybe to a manageable level. Especially taking into consideration the higher SEC payments.

 

[billybud]

North Carolina politics is now working overtime to hold the line, keep the four North Carolina schools together, keep the ACC offices, keep the merchants happy with the championships scheduled in Carolina.

BC doen't have the will to invest and play at a higher level.....Cuse is just on idle....Stanford is probably upset.."What ? The contract can end in 2027 ? Nobody told us. Get me the B1G on the line".

 

[billybud]

 

[jostar1]

Facing open meetings lawsuit, UNC board says it won't discuss athletics budget in closed session

Members of the UNC Board of Trustees said Monday they would discuss the school's athletic budget during closed session Thursday. But at its meeting, the chairman said that was never the case.

The chairman of the University of North Carolina at Chapel Hill's Board of Trustees said it would not discuss the school's athletic budget in closed session Thursday despite saying it would do just that during a special meeting Monday.

The about-face came after a complaint was filed Wednesday afternoon in Orange County alleging that the board was in violation of the state's open meetings and public records act.

A judge granted a temporary restraining order to stop the board from going into closed session to discuss "UNC Athletics' financials, budgeting, deficit, or ongoing or future conference realignment and related strategic planning."

The board went into closed session Thursday morning, but not before saying it would not discuss athletics.

Near the beginning of Thursday's full board meeting, in open session, chairman John Preyer read a statement seeking "to correct and clarify" the board's intent.

"I want to clarify comments made during that meeting that made a suggestion that we planned a separate budget presentation for athletics in an upcoming closed session. We do not schedule budget presentations and discussions for closed session. And we did not do that this week," Preyer said.

He continued: "A lot of us are very passionate about our athletics program. Concerns about the future have been expressed. We are in an uncertain time regarding the future of college athletics. That future is fraught with substantial and intersecting legal risk. We did not speak with the precision or clarity that we should have on Monday, but no statement made or action taken during that meeting changed the board's plan for today's closed session, our commitment to respect the legal ground for closed session or the accuracy of our published agenda."

Facing open meetings lawsuit, UNC board says it won't discuss athletics budget in closed session

Members of the UNC Board of Trustees said Monday they would discuss the school's athletic budget during closed session Thursday. But at its meeting, the chairman said that was never the case.

www.wral.com

 

[Kolumbo]

Why on earth would anyone not named FSU/Clem/UNC (and 1 or 2 others) agree to that?

They gotta man up and face the music. They can't ride coattails all their lives. They gotta look in the mirror. They gotta ask themselves, "who are we?" They gotta face the music. Pay their own way. Grow a pair. All that sheet

 

[billybud]

Interesting..a Duke grad (who is a lawyer) filed the open meeting complaint against the UNC BOT....

 

[Vowelguy]

They gotta man up and face the music. They can't ride coattails all their lives. They gotta look in the mirror. They gotta ask themselves, "who are we?" They gotta face the music. Pay their own way. Grow a pair. All that sheet

I see.
And if you discovered that you're being overpaid at your job relative to your contributions, I assume you would immediately tell your boss that you didnt want to ride on anyone's coattails and needed a salary reduction?

 

[CL82]

They gotta man up and face the music. They can't ride coattails all their lives. They gotta look in the mirror. They gotta ask themselves, "who are we?" They gotta face the music. Pay their own way. Grow a pair. All that sheet

They gotta ask themselves is this my beautiful wife? They got to ask themselves is this my large automobile?

 

[Kolumbo]

I see.
And if you discovered that you're being overpaid at your job relative to your contributions, I assume you would immediately tell your boss that you didnt want to ride on anyone's coattails and needed a salary reduction?

How did I get here?

This whole fiasco looks really bad for the ACC. The Big 12 went out and got top shelf athletic and academic programs, in my opinion. The ACC is getting sued because some members want out. The longer it goes on, the worse it is for everyone, especially the hangers on looking desperate. So yeah, I'd jump ship and find something which works better for me long term, even if it means a pay cut. Happens all the time. The Pensky File doesn't lie.

 

[freescooter]

How did I get here?

This whole fiasco looks really bad for the ACC. The Big 12 went out and got top shelf athletic and academic programs, in my opinion. The ACC is getting sued because some members want out. The longer it goes on, the worse it is for everyone, especially the hangers on looking desperate. So yeah, I'd jump ship and find something which works better for me long term, even if it means a pay cut. Happens all the time. The Pensky File doesn't lie.

I am of the opinion that the ACC should be following the B12’s model. They lost Texas and Oklahoma, after losing Texas A&M and before that Nebraska and Missouri and Colorado. They are still in solid shape. The ACC needs to get rid if FSU and Clemson. Those schools will be nothing but trouble the rest of the way. Work out a buyout plan that is high enough to discourage others and get on with a reasonable expansion plan.

 

[Vowelguy]

This whole fiasco looks really bad for the ACC. The Big 12 went out and got top shelf athletic and academic programs, in my opinion. The ACC is getting sued because some members want out. The longer it goes on, the worse it is for everyone, especially the hangers on looking desperate. So yeah, I'd jump ship and find something which works better for me long term, even if it means a pay cut.

Who exactly is the ACC going to add at this point that is going to save the conference?

If they open the floodgates and allow anyone to leave today, then not only are the best gone but the middle are off to the B12.

That's today. Maybe in 2 years something will have changed. A few years ago everyone though the B12 was toast. Now it's outlived the PAC, and will surpass the ACC if fsu/clem/unc leave. So the ACC-lessers are trying to hold things together until/if the wind blows their way again.

 

[Kolumbo]

I am of the opinion that the ACC should be following the B12’s model. They lost Texas and Oklahoma, after losing Texas A&M and before that Nebraska and Missouri and Colorado. They are still in solid shape. The ACC needs to get rid if FSU and Clemson. Those schools will be nothing but trouble the rest of the way. Work out a buyout plan that is high enough to discourage others and get on with a reasonable expansion plan.

I think it would be great if the NC and VA schools decided to make the ACC somewhat great again. Like you said, let those 2 football schools leave, bring in other solid programs. The rest agree to stay or dissolve the ACC and create a new ACC. Neither the Big 12 nor the ACC will compete with the Big 10 or the SEC in terms of media dollars, at least in the near future, so don't bother trying. The ACC could become the top basketball and academic conference and the football programs would be just as good as 75% of the P2. But greed will win out and whoever can jump, will jump, while asking how high. It is inevitable.

 

[billybud]

The conundrum...2012 thru Nov 10 2023:

FSU and Clemson had a combined 59 games with views of 4.0 million...

The rest of the ACC, combined, didn't reach that total...the bottom nine teams in viewing averaged 3 apiece over that span.

 

[tiger paw]

Football money is everything. Basketball + academics are irrelevant in the world of Power 2+1/2. Even UConn basketball could not get us over the hump with expansion. ACC rebuilt will be FSU out. South Florida in. Clemson out. Memphis in. North Carolina out. East Carolina in. If B12 expands UConn is not even listed in the top 8 potential candidates.

 

[billybud]

Virginia does not draw for football...Neither does UNC, Duke...

But, the ACC could put together a pretty nice basketball league.

 

[Vowelguy]

The conundrum...2012 thru Nov 10 2023:

FSU and Clemson had a combined 59 games with views of 4.0 million...

The rest of the ACC, combined, didn't reach that total...the bottom nine teams in viewing averaged 3 apiece over that span.

Somethin not right. 4 million viewers divided by 59 games is not good. Did you mean 4 million average?

 

[billybud]

Somethin not right. 4 million viewers divided by 59 games is not good. Did you mean 4 million average?

Left out word "over"...as in over 4 million.