Is something about to happen?

[The Viking]

Both sides will claim victory. Clearly the main victor hear is UMD though. They go to a better conference that won't be raided in the next 10-20 years and will be as stable as humanly possible.

The ACC clearly didn't want them to leave and they scrambled and ultimately made the wrong decision in picking a school that doesn't fit the academic pedigree of what the ACC used to be. As I said before, if the ACC knew what it knows now - with UConn athletics being as solid as possible from a hoops perspective and with Diaco replacing PP, along with FSU winning a national championship and Clemson's great recent success - they never would have taken Louisville over UConn.

 

[auggie22]

I was on the Kitty train until Herbst's statement yesterday. If she were aware an invite was imminent, she would never have said we would adopt "most" of the P5 measures. Why parse words like that if you know a rescue is imminent. It sounded like a defensive statement made from a position of weakness. I stressed about that all night.


I am still a huge fan of the conspiracy kitty schtick though. Best thing since the DJ Joey Franchise posts.

 

[CL82]

I was on the Kitty train until Herbst's statement yesterday. If she were aware an invite was imminent, she would never have said we would adopt "most" of the P5 measures. Why parse words like that if you know a rescue is imminent. It sounded like a defensive statement made from a position of weakness. I stressed about that all night.


I am still a huge fan of the conspiracy kitty schtick though. Best thing since the DJ Joey Franchise posts.

Conspiracy Kitty says:

Two words: Head...fake. The woman is wily.

By the way the O'Bannon decision just came out. The court found the NCAA cannot prevent the sharing of revenue from the use of players images with the players themselves. Given UConn MCBB dominance and NBA alumni success does anyone believe that the UConn players' jerseys are not a huge source of potential revenue that can be "shared" with a player? That's more potential 'value' for the university.

Yet another piece of the puzzle my friends. Stay tuned!

 

[Gurleyman]

Is the cat still alive? It's been wearing that aluminum hat for several years now.

Until we know the end result of conference realignment, conspiracy kitty can be simultaneously thought of as both alive and dead.

 

[UConnDan97]

Until we know the end result of conference realignment, conspiracy kitty can be simultaneously thought of as both alive and dead.

That joke is nerdy enough for me to like... (<-- those are not sunglasses, they are bifocals....and a pocket protector...)

 

[MilliniumPrince]

Two winners here IMO: ACC and ESPN. No team will pay $31 million to leave so the ACC is solid.

 

[Chin Diesel]

Two winners here IMO: ACC and ESPN. No team will pay $31 million to leave so the ACC is solid.

Well, if a team knew they were going to make almost $20m more per year with the new B1G contract, that fee could be recouped in two years. Which means every team in the ACC approached by the B1G has to listen to the offer.

 

[RegisteredUconn]

Surely, Maryland believes that they're getting a good deal for the long term or they wouldn't have switched. The problem is that both UMD and RU are viewed as outsiders by the fanbase in the core areas of the B1G. Even State Penn wasn't warmly received at first when they joined in 1990. Nebraska is a different story, because of where it's located and also a historical power. This has nothing to do with their qualifications as institutions or their sports programs but regional biases. Of course, every large conference has these issues.

When I was a student at College Park, the Terps were the ACC's outsider, as unwelcome as any Yankee in Dixie. I have a feeling the B1G will show a much greater hospitality than the tobacco road fanbase ever did.

 

[RegisteredUconn]

Until we know the end result of conference realignment, conspiracy kitty can be simultaneously thought of as both alive and dead.

Are you postulating that Conspiracy Kitty is Schrödinger's Kitty?

 

[RegisteredUconn]

Conspiracy Kitty says:
The state announces $1.55 billion commitment to UConn's research partnership.

There's a rumor of a settlement in the Maryland litigation.

Now, UConn settles a highly questionable Federal Civil Rights case for what seems to be far too much money given the allegations (although I defer to the legal brain trust on the board as to whether this is "right number" or not.)

All of this coming at the time when UConn would need to give its 27 month notice in order to be eligible to join the B1G in time for the start of the B1G's new TV deal.

Coincidence or is someone trying to get our ducks in a row for a move?

Might be time to stow our carry-on baggage. The captain may be about to turn on the "Fasten Your Seat Belt" sign.

 

[CL82]

Until we know the end result of conference realignment, conspiracy kitty can be simultaneously thought of as both alive and dead.

Well we do know that our fate is entangled with events out of our control.

 

[MilliniumPrince]

Well, if a team knew they were going to make almost $20m more per year with the new B1G contract, that fee could be recouped in two years. Which means every team in the ACC approached by the B1G has to listen to the offer.

If you overlook the GOR....sure

 

[freescooter]

A lot of people say GOR is both breakable and less than meets the eye. There is a school of thought that the ACC settled this in part because nobody want to test the GOR. My own guess is that if someone wanted to test it, ultimately it would end up in a financial settlement just like the ACC's "unbreakable" $52 Million exit fee turned out to be $31 million and the Big East's unbreakable 27 month notice was negotiated down to 6. As to why it is less of a deal than initially seems is that it only applies to certain games and only to home games. In other words, if FSU grants its rights to the ACC, then leaves for the SEC, its away games in the SEC are "owned" by the SEC, or by the SEC member schools just as if they were non-conference away games. FSU can't give away rights it doesn't own. Broadcast rights to Florida State at Alabama wouldn't be part of the ACC deal anyway. So its worst case scenario is that it loses rights to its home games, but those likely would be limited to the value of the ACC contract rather than the new SEC value. So in a simplistic example,if the value of an FSU home game is $2 under the ACC tv deal, and $5 million under the SEC tv deal, FSU's liability under the GOR might well be limited to $2 million, since the ACC isn't entitled to more than it would have received had FSU stayed. FSU could minimize its liability even further by agreeing to play fewer home games for a few years, or neutral site games where it is visitor perhaps so UCLA or Texas/Big 12 get the rights.

 

[BC1978]

A lot of people say GOR is both breakable and less than meets the eye. There is a school of thought that the ACC settled this in part because nobody want to test the GOR. My own guess is that if someone wanted to test it, ultimately it would end up in a financial settlement just like the ACC's "unbreakable" $52 Million exit fee turned out to be $31 million and the Big East's unbreakable 27 month notice was negotiated down to 6. As to why it is less of a deal than initially seems is that it only applies to certain games and only to home games. In other words, if FSU grants its rights to the ACC, then leaves for the SEC, its away games in the SEC are "owned" by the SEC, or by the SEC member schools just as if they were non-conference away games. FSU can't give away rights it doesn't own. Broadcast rights to Florida State at Alabama wouldn't be part of the ACC deal anyway. So its worst case scenario is that it loses rights to its home games, but those likely would be limited to the value of the ACC contract rather than the new SEC value. So in a simplistic example,if the value of an FSU home game is $2 under the ACC tv deal, and $5 million under the SEC tv deal, FSU's liability under the GOR might well be limited to $2 million, since the ACC isn't entitled to more than it would have received had FSU stayed. FSU could minimize its liability even further by agreeing to play fewer home games for a few years, or neutral site games where it is visitor perhaps so UCLA or Texas/Big 12 get the rights.

Freescooter, what does this case have to do with the GOR? UMD was never a party to the GOR. Whether this case was settled or not had no impact whatsoever on the GOR as it was never part of the litigation.

There are two separate entities - the exit fees and the GOR. It would appear that the bar has been set on the ACC exit fees at $31M and change (not $52M, but not chump change either!) (This involving a school that voted against the increase in exit fees where all of the others, except FSU, voted for it.) It would seem to reason that any ACC team contemplating leaving the ACC in the future would be looking at the likelihood of a $31M+ exit fee PLUS face the GOR - and how that would shake out in a legal challege. IMO, not a trivial risk or exposure for a team contemplating such.

 

[Mr. Wonderful]

Nothing will happen prior to 2017. Why? That's when the B1G renegotiates its media contract, and also when the ACC has it's next contract "look in." The ACC has used expansion of membership to trigger renegotiations with ESPN during look in periods in the past. It also makes sense that ESPN will wait and see what the B1G schools get before considering what to pay for the ACC, and whether expansion will be worth what they might have to pay for it. Please note, I am not predicting expansion will happen, just the business based reasons why it won't happen in the next three years.

 

[freescooter]

Freescooter, what does this case have to do with the GOR? UMD was never a party to the GOR. Whether this case was settled or not had no impact whatsoever on the GOR as it was never part of the litigation.

There are two separate entities - the exit fees and the GOR. It would appear that the bar has been set on the ACC exit fees at $31M and change (not $52M, but not chump change either!) (This involving a school that voted against the increase in exit fees where all of the others, except FSU, voted for it.) It would seem to reason that any ACC team contemplating leaving the ACC in the future would be looking at the likelihood of a $31M+ exit fee PLUS face the GOR - and how that would shake out in a legal challege. IMO, not a trivial risk or exposure for a team contemplating such.

I'm simply pointing out that GOR mihgt not be the hurdle is is being sold as for all the reasons I discussed. It is a hurdle, but no hurdle put in place by a conference has prevented a team from leaving and further no team has ever lived up to the "unbreakable" requirement. If Florida State or Georgia Tech or Syracuse gets an offer from another league and decides it wants to leave, it will leave. And any GOR, or notice requirement or exit fee will ultimately be negotiated downward. Keep in mind that the ACC said at the outset that it would not negotiate with Maryland. It would not give an inch. It of course ultimately took $31 million. The same thing will happen on any GOR. I outlined the basis of a settlement, which will be a cash payment of some sort, ultimately less than the school will earn in its new conference.

 

[BC1978]

I'm simply pointing out that GOR mihgt not be the hurdle is is being sold as for all the reasons I discussed. It is a hurdle, but no hurdle put in place by a conference has prevented a team from leaving and further no team has ever lived up to the "unbreakable" requirement. If Florida State or Georgia Tech or Syracuse gets an offer from another league and decides it wants to leave, it will leave. And any GOR, or notice requirement or exit fee will ultimately be negotiated downward. Keep in mind that the ACC said at the outset that it would not negotiate with Maryland. It would not give an inch. It of course ultimately took $31 million. The same thing will happen on any GOR. I outlined the basis of a settlement, which will be a cash payment of some sort, ultimately less than the school will earn in its new conference.

Well, we will certainly see how this all shakes out going forward. Just a couple of things to consider, FWIW:

1. Yes, the ACC's original position was that they would not settle. That said, you neglected to mention that UMD's position was also "not to give an inch". Their view was that they did not owe the ACC a dime - and, in fact, they were owed something like $157M(?) in damages. In the end, the ACC "settled" on almost 61% of what they were seeking.

2. GORs are different animals in that there is not a "fee" to be negotiated; as the the Conference owns the media rights to its teams for a specified period of years. A team leaving a conference with a GOR would need to litigate to get those rights back. Unlike the UMD exit fee case, this team would start from a position of challenging something they had voluntarily approved to begin with. For purposes of this discussion, though, let's say that the parties negotiate a "settlement." If it falls along the lines of the 61% exit fee settlement received by the ACC in the UMD case - or even a simple 50-50 split, the loss of even 50% of the value of a team's media rights for the duration of the GOR (in addition to the exit fee) would be a staggering sum which I am not sure any team could accept. IMO, the only realistic course of action for a team pursuing such a strategy would be to go all-in and challenge the GOR and/or the forfeiture clauses since a "settlement' would likely still be financially horrendous for any team given the huge sums involved.

3. IMO, if a team were to go "all-in" to overturn the GOR and forfeiture clauses, it would be an interesting litigation given that: (a) they willingly agreed to them and (b) unless the team is going to the SEC, they would be moving to a conference with the same GOR provisions (would make for interesting depositions, IMO!).

IMO, the GORs were never intended to be an absolute lock in preventing a team from ever leaving a conference. For the ACC, IMO, they are intended as a bridge to get the conference closer to the point where they can renegotiate what most consider is an historically undervalued contract. In addition, the landscape will likely change over the next 12 years so its hard to predict just how the future will shake out for any of this.

Just my 2 cents.

 

[pj]

2. GORs are different animals in that there is not a "fee" to be negotiated; as the the Conference owns the media rights to its teams for a specified period of years. A team leaving a conference with a GOR would need to litigate to get those rights back. Unlike the UMD exit fee case, this team would start from a position of challenging something they had voluntarily approved to begin with. For purposes of this discussion, though, let's say that the parties negotiate a "settlement." If it falls along the lines of the 61% exit fee settlement received by the ACC in the UMD case - or even a simple 50-50 split, the loss of even 50% of the value of a team's media rights for the duration of the GOR (in addition to the exit fee) would be a staggering sum which I am not sure any team could accept. IMO, the only realistic course of action for a team pursuing such a strategy would be to go all-in and challenge the GOR and/or the forfeiture clauses since a "settlement' would likely still be financially horrendous for any team given the huge sums involved.

3. IMO, if a team were to go "all-in" to overturn the GOR and forfeiture clauses, it would be an interesting litigation given that: (a) they willingly agreed to them and (b) unless the team is going to the SEC, they would be moving to a conference with the same GOR provisions (would make for interesting depositions, IMO!).

IMO, the GORs were never intended to be an absolute lock in preventing a team from ever leaving a conference. For the ACC, IMO, they are intended as a bridge to get the conference closer to the point where they can renegotiate what most consider is an historically undervalued contract. In addition, the landscape will likely change over the next 12 years so its hard to predict just how the future will shake out for any of this.

Just my 2 cents.

A key point is that although the GoR contract transfers media rights to the conference, the conference has no right to go onto campus to film any athletic events; yet the departing team does have the ability to film its games and if it distributes them through another media outlet, that is a material breach of contract. So you have to look at what the penalties are for an early termination and breach of the GoR. That may not be the same as transferring media rights to the old conference. Probably isn't.

 

[Cleanface]

Surely, Maryland believes that they're getting a good deal for the long term or they wouldn't have switched. The problem is that both UMD and RU are viewed as outsiders by the fanbase in the core areas of the B1G. Even State Penn wasn't warmly received at first when they joined in 1990. Nebraska is a different story, because of where it's located and also a historical power. This has nothing to do with their qualifications as institutions or their sports programs but regional biases. Of course, every large conference has these issues.

Shut up, stupid.

 

[CL82]

A key point is that although the GoR contract transfers media rights to the conference, the conference has no right to go onto campus to film any athletic events; yet the departing team does have the ability to film its games and if it distributes them through another media outlet, that is a material breach of contract. So you have to look at what the penalties are for an early termination and breach of the GoR. That may not be the same as transferring media rights to the old conference. Probably isn't.

Are you sure about this? I would think that access would have been granted as a part of the original media rights deal.

 

[pj]

Are you sure about this? I would think that access would have been granted as a part of the original media rights deal.

If it was, then denying access is just another material breach. Once you've thoroughly breached the agreement, what's a breach of one more provision? It won't affect the ultimate damage award.

 

[businesslawyer]

If it was, then denying access is just another material breach. Once you've thoroughly breached the agreement, what's a breach of one more provision? It won't affect the ultimate damage award.

This is how it plays out.

1. Team leaves conference A for conference B.

2. At its first home game in conference B, Team doesn't let Conference A's announcers in.

3. Networks sues for specific performance. Judge says I don't have to get to likelihood of success on the merits because there is no harm that money (a reduction in the fees being paid by the network to conference A) can't cure.

4. Network asks Conference A to replace the departing team with a satisfactory replacement if it wants the same money. Conference A replaces the departing team with the best replacement available and negotiates with network on whether there is a reduction in TV rights and by how much.

5. If there is a reduction, A sues departing team to pay it. Departing team either pays it or claims it doesn't owe anything because the GOR was never valid as punitive damages or challenges the whole structure of the conference taking its members TV rights as an antitrust violation based on the new O'Bannon ruling.

6. The parties settle for less than the conference wants and more than the departing member wants to pay.

7. Life goes on.

It's really that simple folks. The GOR adds uncertainty to a departing member, and is therefor something of a disincentive, but it's not going to be specifically enforceable so this is still going to come down to money damages. The ACC's loss because VPI is replaced by Cincy is what? It's not in the tens of millions a year.

 

[pj]

This is how it plays out.

1. Team leaves conference A for conference B.

2. At its first home game in conference B, Team doesn't let Conference A's announcers in.

3. Networks sues for specific performance. Judge says I don't have to get to likelihood of success on the merits because there is no harm that money (a reduction in the fees being paid by the network to conference A) can't cure.

4. Network asks Conference A to replace the departing team with a satisfactory replacement if it wants the same money. Conference A replaces the departing team with the best replacement available and negotiates with network on whether there is a reduction in TV rights and by how much.

5. If there is a reduction, A sues departing team to pay it. Departing team either pays it or claims it doesn't owe anything because the GOR was never valid as punitive damages or challenges the whole structure of the conference taking its members TV rights as an antitrust violation based on the new O'Bannon ruling.

6. The parties settle for less than the conference wants and more than the departing member wants to pay.

7. Life goes on.

It's really that simple folks. The GOR adds uncertainty to a departing member, and is therefor something of a disincentive, but it's not going to be specifically enforceable so this is still going to come down to money damages. The ACC's loss because VPI is replaced by Cincy is what? It's not in the tens of millions a year.

Yes. One can quibble about the level of damages involved, but if Va Tech were to leave the ACC with 7-10 years left in the GoR, damages would be something less than $100 mn including the exit fee. If Va Tech is picking up an extra $20 mn per year from the B1G, they can pay that and have a profit left over.

So it's really going to come down to what conference they want to be in. Here is where the B1G's AAU/CIC/research collaboration initiatives may help them with Va Tech's academic decision-makers.

 

[billybud]

This is how it plays out.

1. Team leaves conference A for conference B.

2. At its first home game in conference B, Team doesn't let Conference A's announcers in.

3. Networks sues for specific performance. Judge says I don't have to get to likelihood of success on the merits because there is no harm that money (a reduction in the fees being paid by the network to conference A) can't cure.

4. Network asks Conference A to replace the departing team with a satisfactory replacement if it wants the same money. Conference A replaces the departing team with the best replacement available and negotiates with network on whether there is a reduction in TV rights and by how much.

5. If there is a reduction, A sues departing team to pay it. Departing team either pays it or claims it doesn't owe anything because the GOR was never valid as punitive damages or challenges the whole structure of the conference taking its members TV rights as an antitrust violation based on the new O'Bannon ruling.

6. The parties settle for less than the conference wants and more than the departing member wants to pay.

7. Life goes on.

It's really that simple folks. The GOR adds uncertainty to a departing member, and is therefor something of a disincentive, but it's not going to be specifically enforceable so this is still going to come down to money damages. The ACC's loss because VPI is replaced by Cincy is what? It's not in the tens of millions a year.

An oversimplification...and off base some.

1...The concept and language of "punitive" is in the specific language of liquidated damage (exit fee) case law...but has little to do with media law.

2...In media law, the voluntary signing over of media rights and interests is a totally different concept.

 

[Dooley]

I fall into the camp that says GORs are just another negotiation tool to be used to settle an exiting schools' exit terms. MD paid $31M without GOR consideration to leave the ACC for the B1G. A future departing school might have to pay more than $31M or they might not (if I had to guess, I'd say they would). My guess is that if another school decides to challenge the GOR and argues that they signed under some sort of duress, the ACC would settle for somewhere between $31M - $52M. Still a good chunk of change for the ACC, who could easily replace an exiting school with a UCONN/UCF/Cincinnati and not lose much value (depending on the school, of course). And a good deal for the exiting school who will double their TV revenue stream in a few short years.