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Two winners here IMO: ACC and ESPN. No team will pay $31 million to leave so the ACC is solid.
Two winners here IMO: ACC and ESPN. No team will pay $31 million to leave so the ACC is solid.
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.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.
Are you postulating that Conspiracy Kitty is Schrödinger's Kitty?Until we know the end result of conference realignment, conspiracy kitty can be simultaneously thought of as both alive and dead.
Might be time to stow our carry-on baggage. The captain may be about to turn on the "Fasten Your Seat Belt" sign.![]()
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?
Well we do know that our fate is entangled with events out of our control.Until we know the end result of conference realignment, conspiracy kitty can be simultaneously thought of as both alive and dead.
If you overlook the GOR....sureWell, 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.
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.
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.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.
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.
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.
Are you sure about this? I would think that access would have been granted as a part of the original media rights deal.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.
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.
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.
Interesting BL. I suppose things get more complicated if there are different networks involved as they could be brought into the suit. I do think that uncertainty is the key deterrent. Without precedent, it harder to predict what is the likely the final outcome. That can be a significant deterrent to a risk adverse institution.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.
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.
lOL. There is a small number of lawyers around the country for whom i have so much respect that if thet tell men I'm wrong I believe them first and figure out why second. Want to guess if you're on that list?
LOL...Great...we seem to have the same opinion of each other. I immediately noticed your hashing of the "punitive" versus media rights...
It's a good thing. I like symmetry.
Maryland's position is irrelevant. They left and weren't coming back. The ACC adopted the $52 million fee in an effort to stop teams from leaving. For Maryland anything less than $52 million was a win, because that was their ultimate exposure. The rest was posturing to get a settlement. Same thing with GOR. If a school decides to go it will go. The GOR will be ultimately negotiated downward to a number both sides can accept, but the school that wants to leave is going to leave. And nobody wants to go all in on litigation over the GOR. Because both sides have too much to lose. If the leagues and their network partners lose, they lose the basis that underwrites their whole business model. If the school loses, it loses a huge income stream. So they will both negotiate and come to a settlement just like most businesses do when neither can afford a total loss. The other point is this. A school decides it wants to leave your league. Do you really want them as a partner going forward?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.
The only thing about replacing a school with another of nearly equal value is that outside of UCONN, UC, BYU, UCF and maybe UH and SMU I don't think there are any more schools that you can add that will add equal value in some way to a departing school. At some point one of these P-5 commissioners is going to go to the cupboard to fill a open spot and realize the cupboard isn't endless.You hit the nail on the head BL!
I've been saying for a couple of years now that nearly anything can be monetized and if a school attempted to depart while under a grant of rights agreement some financial settlement to cover damages would be reached. There is a bit of risk here as the dollar amount would be unknown until after negotiations were well underway (far past the point of deciding whether to depart for a new conference) but the right move would be well worth that risk in the eyes of some schools.
The kicker here (which BL also pointed out) is that if it reached the point of damages and a replacement school (which would be necessary for the conference to continue under its contract) is substantial enough to roughly replace the lost value, the damages could end up being far less than a departure fee would have been, which may in fact hurt the conference in the long run.
lOL. There is a small number of lawyers around the country for whom i have so much respect that if thet tell men I'm wrong I believe them first and figure out why second. Want to guess if you're on that list?
LOL...Great...we seem to have the same opinion of each other. I immediately noticed your hashing of the "punitive" versus media rights...
It's a good thing. I like symmetry.
LOL. Synmetry would imply that you have my Chambers rating, or ABA honors, or track record, or something that would objectively justify your opinion of me. If you'd like to play that game offline, let me know.
The only thing about replacing a school with another of nearly equal value is that outside of UCONN, UC, BYU, UCF and maybe UH and SMU I don't think there are any more schools that you can add that will add equal value in some way to a departing school. At some point one of these P-5 commissioners is going to go to the cupboard to fill a open spot and realize the cupboard isn't endless.
For the Big 10, UConn may bring in more money, especially with the new deal coming up in a few years, but who to pair them with?