GOR's?

[FAIRTIDES]

Has anyone seen or heard anything precise about the exact wording of T's and C's in these GOR's? I have a hard time believing that attorneys and politicians representing schools like Texas, Oklahoma, Florida State, or Clemson didn't insist on "exclusions," "yeah buts," or some other "when I said it, I meant it" language. I would not be surprised if force majeure isn't defined as a "better deal."

 

[The Funster]

I don't know about the others but I believe the Big 12 GOR is actually an addendum of the TV contract. Therefore, I assume that if, for whatever reason, the TV deal is renegotiated at that point the GOR become null and void until it is renegotiated; presumably as part of the new TV deal.

 

[FfldCntyFan]

I've been around long enough to realize that anything can be monetized. While the GOR may be an additional obstacle, it will not be an end-all if down the road some current ACC member receives an offer that they view as better and wants to change conferences.

I've seen many multi year (normally 20, often as long as 30) commercial leases that have ended within the first half dozen years. By the language of the lease, the tenant is responsible for rent for the entire term of the lease, not once have I seen a company pay even close to a fraction of the remaining rents.

If the tenant tells the landlord "we've decided to move into a new building that will open in fourteen months. Give us a buyout number for our current lease" and the landlord responds "You signed a lease, you are required to remain in the premises for the entire term". the tenant is not stuck. They'll try again to get a buyout, at some point offer something that they can claim as being fair (in terms of the current market) and eventually, will tell the landlord, "we've tried to be reasonable. We are moving out, sue us.".

If for example, UVA decides in five years to move to the B1G, they will ask the ACC for a number, if the ACC holds tight and says "we'll take your broadcast revenues until 2026 (or whatever year the GOR ends), there will be no settlement", UVA will eventually say "Sue us!". Once UVA leaves for the B1G, the ACC can ask the B1G to forward UVA's revenues to the ACC's office but the b1G will take a few minutes to stop laughing and say "we'll do what the courts decide". The damages will likely be some present value of future revenues lost (with the distinct possibility that UVA can demonstrate the incremental loss of revenues with UVA's replacement vs having UVA will be minimal) increased by some punitive value.

The reality is that if one of the ACC schools wants to leave, they will be able to measure (with of course some level of uncertainty) the cost of getting out of the GOR against the value of being in their new conference. The biggest difference the GOR has as opposed to the fixed (I believe $51 mm was the number) departure fee is that there will be some speculative component in the cost of departure.

 

[pj]

If for example, UVA decides in five years to move to the B1G, they will ask the ACC for a number, if the ACC holds tight and says "we'll take your broadcast revenues until 2026 (or whatever year the GOR ends), there will be no settlement", UVA will eventually say "Sue us!". Once UVA leaves for the B1G, the ACC can ask the B1G to forward UVA's revenues to the ACC's office but the b1G will take a few minutes to stop laughing and say "we'll do what the courts decide". The damages will likely be some present value of future revenues lost (with the distinct possibility that UVA can demonstrate the incremental loss of revenues with UVA's replacement vs having UVA will be minimal) increased by some punitive value.

The reality is that if one of the ACC schools wants to leave, they will be able to measure (with of course some level of uncertainty) the cost of getting out of the GOR against the value of being in their new conference. The biggest difference the GOR has as opposed to the fixed (I believe $51 mm was the number) departure fee is that there will be some speculative component in the cost of departure.

It's simpler than that. If UVa goes to the B1G, ESPN via the ACC continues to control their media rights, not the B1G/BTN/Fox, but the ACC out of ESPN money continues to pay UVa $20 mn per year, and ESPN has a bunch of B1G games it has to market even though B1G fans are used to going to BTN/Fox not ESPN.

So things can just go on like that, UVa gets ACC money playing in the B1G, ESPN televises their games instead of BTN/Fox, but since the games will be more valuable to BTN/Fox than to ESPN, there will be a powerful incentive to transfer the rights from the ACC to the B1G. They'll negotiate some monetary transfer. If the B1G payout is $40 mn/yr vs an ACC payout of $20 mn/yr, a plausible scenario is they would split the difference and BTN sends ESPN $10 mn/yr for the remainder of the GoR in exchange for transferring UVa's media rights to the B1G.

Of course, there is a $50 mn exit fee on top of the GoR issue, so the cost of moving ACC to B1G is now very large.

But the main point is that UVa is entitled to $20 mn / yr from the ACC as long as the ACC has its media rights, so there is no need for things to blow up immediately in a lawsuit. UVa can take the ACC money and let ESPN have its media rights until such time as the B1G/BTN works out a deal with the ACC/ESPN.

 

[UCFBfan]

While the legality of the GoR can be challenged, the concept of it is why it will not be challenged anytime soon. Just look at the 5 major "Power conferences". They all have signed a GOR (SEC will soon if they have not already) and have gotten their lucrative TV deals because of them and the sense of security and stability they offer. Would one conference be willing to shatter that thing that is holding its own conference together (even if it's just a silly idea and not something totally legally binding)? I think the Power conferences are happy where they are and until a few years of this new playoff system plays out and they see where they lie in terms of making the playoffs, there won't be anybody feeling the need to challenge the system or move on. Unfortunately, due to this, we are stuck where we are for awhile. I don't think it's going to just be a few years anymore. I can't see why any conference would feel the need to expand in the next 5 years unless they start to realize that they are not able to get to their lucrative college fb playoff

 

[sportsart]

PJ

I'm not sure where you are getting the info about the GoR from but on the point of the money still being paid if someone moves to an ESPN conference is incorrect.

From what I can find the money is turned over to the conference from ESPN and then the conference pays the teams. If a team leaves the conference gets to keep the money.

I can't find any articles that back up what you are saying.

 

[pj]

Sportsart,

What kind of contract requires one side to perform but not the other? The GoR is an assignment of media rights in exchange for a consideration. The consideration is the team's share of the conference's TV contract. In the example we were considering, UVa to the B1G, in providing its media rights to the ACC UVa obtained in return a $20 mn/yr share of the ACC's ESPN contract. If UVa changes conferences that changes the teams it is playing, but that doesn't matter, it is still fulfilling its contract by providing media rights to the ACC in exchange for its revenue share in the ACC TV contract. The only difference is that the ACC is now providing ACC+B1G games to ESPN in fulfillment of the contract, rather than ACC games only.

Now maybe there are termination clauses in the GoR which deal with such a situation. But nobody is going to negotiate a contract in which one side has to perform indefinitely but the other side doesn't.

 

[WestCoastHusky]

All I know is if there is money to be made, some lawyer somewhere will find a way to break the contract. There is no such thing as a iron-clad contract. GORs are no different. Someone will test those contracts sooner or later.

 

[FfldCntyFan]

PJ, my question on your post (which I believe Sportsart was alluding to) is if hypothetically UVA leaves the ACC for the B1G, what makes you think that ESPN would (or even could) extract UVA's portions of B1G revenues and turn them over to the ACC?

The broadcast revenues get paid to the conference and the conference distributes them to the individual schools.

 

[pj]

PJ, my question on your post (which I believe Sportsart was alluding to) is if hypothetically UVA leaves the ACC for the B1G, what makes you think that ESPN would (or even could) extract UVA's portions of B1G revenues and turn them over to the ACC?

The broadcast revenues get paid to the conference and the conference distributes them to the individual schools.

I didn't say that. ESPN can't get anything out of the B1G, all it can get is UVa's media rights. So they get to televise UVa home games, whether they are in the B1G or ACC. In exchange they have to pay $20 mn (ACC money) to UVa.

UVa presumably wouldn't get B1G revenues until their GoR to the ACC expired or was terminated and they had media rights to give to the B1G. But there's nothing to stop them being brought into the B1G before the GoR expires. And the B1G would own media rights to games at which UVa was visiting a B1G team.

 

[FfldCntyFan]

I didn't say that. ESPN can't get anything out of the B1G, all it can get is UVa's media rights. So they get to televise UVa home games, whether they are in the B1G or ACC. In exchange they have to pay $20 mn (ACC money) to UVa.

UVa presumably wouldn't get B1G revenues until their GoR to the ACC expired or was terminated and they had media rights to give to the B1G. But there's nothing to stop them being brought into the B1G before the GoR expires. And the B1G would own media rights to games at which UVa was visiting a B1G team.

When did I say that ESPN would or would not get anything out of it?

I believe that you are seriously mistaken if you believe that ESPN can extract UVA's portion of the revenue they would earn in the B1G and give it to the ACC, it doesn't work like that. If an ACC school left the conference, at some point (possibly through arbitration forced by a judge to avoid litigation) a dollar amount will be set to cover the damages incurred by the ACC for losing a member. There is little chance either party (UVA or the ACC) would allow this to linger beyond when UVA begins playing B1G varsity sports as a member of the B1G. There would not be a period where UVA's home games would go elsewhere. Once they join the B1G, the B1G will view them as their property.

 

[whaler11]

Only the SEC would challenge a GOR... and the reason the ACC has a GOR is because the schools that the Big 10 and SEC would want didn't want to leave the ACC.

Nobody is coming to save us. UConn is on their own.

 

[noeynox]

Only the SEC would challenge a GOR... and the reason the ACC has a GOR is because the schools that the Big 10 and SEC would want didn't want to leave the ACC.

Nobody is coming to save us. UConn is on their own.

Have to think this will eventually sink in....this is it boys. You don't have to like this conference but learn to accept this IS our league.

 

[pj]

When did I say that ESPN would or would not get anything out of it?

I believe that you are seriously mistaken if you believe that ESPN can extract UVA's portion of the revenue they would earn in the B1G and give it to the ACC, it doesn't work like that. If an ACC school left the conference, at some point (possibly through arbitration forced by a judge to avoid litigation) a dollar amount will be set to cover the damages incurred by the ACC for losing a member. There is little chance either party (UVA or the ACC) would allow this to linger beyond when UVA begins playing B1G varsity sports as a member of the B1G. There would not be a period where UVA's home games would go elsewhere. Once they join the B1G, the B1G will view them as their property.

Your language is so imprecise I'm having trouble telling if you're misreading me or not.

You have to distinguish the legal situation set up by the current contracts from the outcome that would be negotiated.

The legal situation is this: (1) Before any contracts are written, universities own the media rights to their home performances -- all of them. It doesn't matter what conference they are in. (2) The GoR assigns a university's media rights to a conference in exchange for financial considerations. (3) A conference's TV contract assigns the conference's TV rights to a network in exchange for financial considerations. (4) UVa has two contracts with the ACC, the GoR assigns its media rights, the athletic affiliation contract agrees to play ACC games and abide by ACC rules. It can exit the second contract, paying the exit fee, yet still be bound by the GoR. This is the situation I am describing, where UVa has exited the ACC and gone to the B1G, but its media rights continue to be assigned to the ACC (and onward to ESPN) via the GoR & conference-network contract chain, and the ACC continues to have an obligation to pay UVa its contractual consideration for those rights.

Now, in practice, if UVa does move to the B1G, the parties will have powerful incentives to renegotiate those contracts -- roughly, an extra $20 mn/yr of revenue will be generated if UVa's media rights are owned by the B1G rather than the ACC. So there will be a negotiation and settlement of the type you describe. But it's unlikely to be a forced arbitration -- there's no need for it. A judge can just require the parties to perform their contracts until good sense prevails and they negotiate a settlement themselves.

It's possible that there are termination provisions which alter this scenario. But the scenario most on the Internet are assuming, that the universities wrote in to the contract a penalty for exiting the conference that continues the GoR while forfeiting the financial considerations obtained in exchange for the GoR, is extremely unlikely. No competent lawyer would allow his client to agree to such provisions.

 

[B1GALUM]

Only the SEC would challenge a GOR... and the reason the ACC has a GOR is because the schools that the Big 10 and SEC would want didn't want to leave the ACC.

Nobody is coming to save us. UConn is on their own.

You may feel on your own but you should not be without hope. UCONN is a flagship public research university in a state that is not currently in the B1G footprint and in a region that the B1G wants to further enter. There are other schools in your east region that could have appeal to the B1G and serve as a #16 to your #15: University at Buffalo-SUNY, which as you know is an AAU member, or UMASS, which as you know is not an AAU member but has aspirations like UCONN to become a member. Before the critics come out against any of these schools, recognize B1G expansion ceased to be about getting football brands the moment Rutgers and the University of Maryland were granted admission. This is about academics. This is about markets. This is about content for the BTN, not just football, but think hockey, lacrosse, etc. Yes, I think the B1G had their sights set on UVA and UNC as #15 and #16 but this is not to be and this actually works in your favor. Will the B1G expand for the sake of expansion? No so give them a reason. Press your leadership to improve their academics such that the AAU has no choice but to notice. Continue to build your football brand by seeking out games with B1G brand teams; not just Michigan but press for games against Ohio State and Penn State. Sell the B1G on why the UCONN basketball brand will be critical for the success of the B1G in this sport given the acquisitions of Syracuse and Louisville by the ACC. It may take time but there are steps that you can take to make the B1G take notice.

 

[pj]

Great post B1Galum. Of course we're impatient and if we have to wait for SUNY-Buffalo to become a flagship university, we're going to feel like we're "on our own" for decades. But I do think we end up in the B1G sooner or later. You're exactly right about what we have to do -- build up the university academically and athletically, and expand its mindshare as an academic and athletic brand among fans in the state, region, and nationally. We should be recognized as the premier public university and athletics program of the northeast.

Actually, I think it would make sense for Fox to make a play for UConn in some form, as we're the biggest brand/property not yet in a major conference, and could be acquired easily. If ESPN were threatened with losing UConn, the ACC would probably make an offer, forcing the B1G to a decision. That would start dominoes tipping. But the vehicle for Fox isn't clear. It would seem to have to be the B1G or B12 and B12 is so remote, and Texas so reluctant to replace the likes of Texas A&M, Nebraska, Missouri, and Colorado with geographically distant schools of lesser football reputation. The B1G would have to be willing to be a 15 team conference to move quickly. Without Fox bidding, ESPN now has UConn's media rights cheaply and has a disincentive to let the ACC invite UConn which would force them to pay an extra $18 mn/yr.

The other way to force action is to make the university a successful national brand -- get AAU status, build a competitive football program, keep winning national championships in other sports, build the fanbase in New England and New York, increase enrollment so that the alumni base will grow with time. Then we would have the threat of going independent a la BYU, with scheduling alliances with the AAC or maybe a few games with major conferences (a trial run?) and/or the new Big East/C7 for other sports, and auction our media rights creating a regional network with SNY and selling national rights to NBC/Fox/ESPN. Since we got $1.5 mn/yr for SNY regional cable rights to women's BB, it's plausible we could get $6 mn for regional cable rights to all sports, plus some extra millions for national games, plus we would keep all of our playoff income instead of sharing it with conference mates. The scheduling difficulties are the issue here but the AAC is no great scheduling paradise, with distant schools that aren't nearly as good as us in most sports, so independence isn't necessarily a loss. The athletic department probably doesn't feel it has the manpower or expertise to pull this off at the moment, but I hope it's on their plans because as soon as the exit fee income winds down the current contract/league becomes totally unacceptable.

 

[whaler11]

You may feel on your own but you should not be without hope. UCONN is a flagship public research university in a state that is not currently in the B1G footprint and in a region that the B1G wants to further enter. There are other schools in your east region that could have appeal to the B1G and serve as a #16 to your #15: University at Buffalo-SUNY, which as you know is an AAU member, or UMASS, which as you know is not an AAU member but has aspirations like UCONN to become a member. Before the critics come out against any of these schools, recognize B1G expansion ceased to be about getting football brands the moment Rutgers and the University of Maryland were granted admission. This is about academics. This is about markets. This is about content for the BTN, not just football, but think hockey, lacrosse, etc. Yes, I think the B1G had their sights set on UVA and UNC as #15 and #16 but this is not to be and this actually works in your favor. Will the B1G expand for the sake of expansion? No so give them a reason. Press your leadership to improve their academics such that the AAU has no choice but to notice. Continue to build your football brand by seeking out games with B1G brand teams; not just Michigan but press for games against Ohio State and Penn State. Sell the B1G on why the UCONN basketball brand will be critical for the success of the B1G in this sport given the acquisitions of Syracuse and Louisville by the ACC. It may take time but there are steps that you can take to make the B1G take notice.

Thanks and all but I'm 40. I don't have decades to wait around to get back to the big time.

I'm mostly over it - I'm still a fan and will be at all the games.

Really I'm tired of reading fantasies on this board. The school can try and put the school in the best position - but the fans have to get over it and support what it is because if they walk away now forget it the program is doomed.

 

[whaler11]

Can we take a breath on the Buffalo stuff. I mean come on. The BTN is still about airing sports and until Buffalo has sports people would actually watch they aren't getting in a league.

You guys have talked yourself into some crazy s*it the last few years but this Buffalo stuff is tremendous.

 

[noeynox]

Thanks and all but I'm 40. I don't have decades to wait around to get back to the big time.

I'm mostly over it - I'm still a fan and will be at all the games.

Really I'm tired of reading fantasies on this board. The school can try and put the school in the best position - but the fans have to get over it and support what it is because if they walk away now forget it the program is doomed.

Yep, I'm 37. In 15 years I'll be 52. Having watched UConn sports since Calhoun's first year at the school, I"m pretty bummed at where conference realignment has left us. At the end of the day however, I'll be at the games to see UConn (unless the ticket office fuggs up my order one more time at which time I will say fugg it, I"ll watch on TV.) If something happens and we end up in a power five conference in the next few years I'll be ecstatic, but I'm done worrying about it. I'll be at the Memphis and Tulane football games to see my team beat them. Speaking of which, It would be nice if the mods linked their boards to our drop down menu. I wouldn't know where to find the Houston, SMU, Tulane, and Memphis boards.

On the basketball side I look forward to more 30 win seasons, and am hoping for just one final four run from Ollie the next few years to stabilize things on that front.

None of this is a knock on the visitors who offer positive reinforcement regarding our current situation, its just that like Whaler, I see some really far out there stuff being tossed around as possibilities and just shake my head.

 

[CL82]

Thanks and all but I'm 40. I don't have decades to wait around to get back to the big time.

I'm mostly over it - I'm still a fan and will be at all the games.

Really I'm tired of reading fantasies on this board. The school can try and put the school in the best position - but the fans have to get over it and support what it is because if they walk away now forget it the program is doomed.

My god, 40 and you are still able to get to games and use the interweb?! Well, god bless your heart you are doing great!


40, sheesh...

 

[whaler11]

My god, 40 and you are still able to get to games and use the interweb?! Well, god bless your heart you are doing great!


40, sheesh...

I'm not saying I'm dying. I'm saying if it takes decades to get UConn in a bigger conference I'll be watching on a satellite dish from a few thousand miles away.

 

[Cleanface]

The final two schools the B1G will take to = 16 will be;

Kansas and UConn.

Watch.

 

[sportsart]

The final two schools the B1G will take to = 16 will be;

Kansas and UConn.

Watch.

How many followers you got on Twitter?

 

[Cleanface]

None.

That's just how I see this playing out in the next couple/few years.

The BXII won't last, GOR be damned.

 

[FfldCntyFan]

My god, 40 and you are still able to get to games and use the interweb?! Well, god bless your heart you are doing great!


40, sheesh...

I know.

I laughed at the guy who said "in 15 years I'll be 52". I'm there already there (will be 53 before this football season ends) and (if 82 was your graduation year) you are my age (give or take a few months).