Key tweets, and it's all gone to Hell.

[FfldCntyFan]

Like they said, there is a reason Texas/Oklahoma and USC/UCLA are leaving at the end of a GOR period and not in the middle of one.

Don't know what happened to my post so I'll try again.

The 390 is a gross number.

The calculation will be present value of future cash flows multiplied by a discount rate. On another thread I ball parked the final number at a quarter of a billion (plugged in a discount rate that brought it to a very round, very conservative number. I doubt there is an industry standard here so the quarter billion can be low by a good amount).

I've worked on somewhat similar valuation models for decades (mostly for purchases/sales of income property portfolios), determining a defendable buyout number will be the easiest part of this.

Yes, a full member of the ACC will be able to buy themselves out of the GOR. It will however come at an enormous price (not including exit fees).

 

[djct1999]

AND consider, the B10 regularly asks new schools to take very little money for the first 5 years anyway.

ND could demand from them that they get the full B10 amount to make up for the shortfall.

What if the B10 or a tv network offered to pay for some of the buyout?

 

[freescooter]

Most contractural disagreement aren’t water tight no matter how much you try. Let’s say Clemson gets a call to the SEC. They sue the ACC for breach of contract. Then it goes into negotiations and eventually they settle. Because virtually nobody abides strictly be every provision of a contract. Ever. Partly because nobody actually knows them and partly because they are often impractical. And partly because people are people and just want to get things done and get along with other folks on the other side who are friends and colleagues and who they trust. And because the impact of calling someone out on it can be disaster out for everyone. As the saying goes there’s the contract and there’s the way we do do it.

 

[noeynox]

Don't know what happened to my post so I'll try again.

The 390 is a gross number.

The calculation will be present value of future cash flows multiplied by a discount rate. On another thread I ball parked the final number at a quarter of a billion (plugged in a discount rate that brought it to a very round, very conservative number. I doubt there is an industry standard here so the quarter billion can be low by a good amount).

I've worked on somewhat similar valuation models for decades (mostly for purchases/sales of income property portfolios), determining a defendable buyout number will be the easiest part of this.

Yes, a full member of the ACC will be able to buy themselves out of the GOR. It will however come at an enormous price (not including exit fees).

I could see a scenario where desirable schools announce that they are leaving for the B1G or SEC following upon expiration of the GOR in an attempt to send schools scurrying to find new homes and thus dissolving the conference. A Hail Mary attempt if you will.

 

[upstater]

What if the B10 or a tv network offered to pay for some of the buyout?

Networks are going to renegotiate their deals immediately. So there's no incentive for them to do this.

They're going to have to pay up regardless.

 

[upstater]

I could see a scenario where desirable schools announce that they are leaving for the B1G or SEC following upon expiration of the GOR in an attempt to send schools scurrying to find new homes and thus dissolving the conference. A Hail Mary attempt if you will.

But this is like burning a hundred million dollars. There are 16 more years on the GOR and an annual payout of $36 million which will only increase over time.

The new B12 is about to negotiate a new TV package that will fall well below $40m a year. And it may be raided anyway.

So, I can't see the lesser schools scurrying anywhere.

 

[FfldCntyFan]

I could see a scenario where desirable schools announce that they are leaving for the B1G or SEC following upon expiration of the GOR in an attempt to send schools scurrying to find new homes and thus dissolving the conference. A Hail Mary attempt if you will.

Again, schools like Wake, Pitt, Cuse, etc will voluntarily assist in dismantling the GOR just to make it easier for Clemson, UNC, etc?

There is no destination that they would leave for that won't be there after GOR payments are agreed upon. There would be far too much financial incentive for the "have nots" to hold tight as long as possible.

 

[noeynox]

It would be a hail Mary and there would have to be a significant number of schools with secure landing spots to be pulled off. Thinking 4 each to the SEC/B1G.

 

[nelsonmuntz]

Don't know what happened to my post so I'll try again.

The 390 is a gross number.

The calculation will be present value of future cash flows multiplied by a discount rate. On another thread I ball parked the final number at a quarter of a billion (plugged in a discount rate that brought it to a very round, very conservative number. I doubt there is an industry standard here so the quarter billion can be low by a good amount).

I've worked on somewhat similar valuation models for decades (mostly for purchases/sales of income property portfolios), determining a defendable buyout number will be the easiest part of this.

Yes, a full member of the ACC will be able to buy themselves out of the GOR. It will however come at an enormous price (not including exit fees).

That math sounds about right, but the ACC members may also have intangible value from keeping everyone in the league. Once the ACC ends, it ends, but holding it together gives every school options. Maybe the world changes. Maybe the top 10 national programs break off and do their own thing. Maybe the NFL forms a minor league that turns NCAA football into college baseball. Maybe.

I think the departing schools will have to pay more than the liquidated value of the contract to walk away.

Either they need to figure out a way to dissolve the league, and therefore the GoR, or it probably isn't happening.

If I was Clemson, I would focus on dissolving the league. It seems like a more realistic path out.

 

[huskymedic]

This sums everything up pretty simply.

ESPN and/or FOX will decide how this shakes out just as they have with every other move that has been made in realignment.

ESPN already has some history in deciding which conferences and schools survive and which ones don't. It's very well known that FOX is all in on college sports and now owns one of the 2 prized whales.

They will determine which of the Little 3 survive just as they will determine which schools currently on the outside get in.

It's always been about the money. Now they just don't try and pretend to hide it.

 

[shizzle787]

That’s what I’m thinking. Part of the deal will be that Notre Dame keeps their home games on NBC.

 

[ZooCougar]

Again, schools like Wake, Pitt, Cuse, etc will voluntarily assist in dismantling the GOR just to make it easier for Clemson, UNC, etc?

There is no destination that they would leave for that won't be there after GOR payments are agreed upon. There would be far too much financial incentive for the "have nots" to hold tight as long as possible.

It will be in their best interest because once these ACC schools announce their intention to leave the entire conference will be in limbo.

You seem stuck on a binary result. The GoR is enforced, or it’s dismantled. The answer is really none of the above or a variation.

The GoR is what is going to force everyone to the table but it will not stop anyone from leaving because these schools will be smart enough to cut their losses and settle rather than carry on for years in dead conference which will be damaging in other ways.

 

[WestCoastHusky]

For the ACC teams that have options that want to leave, they should focus on breaking up the ACC vs trying to fight the GoR individually.

So the question should be:

1. How many schools have to vote yes in the ACC to break up the ACC?

2. Once the number of schools to break up the ACC is determined, the question is will these schools find landing spots in the B1G and the SEC? If the answer is yes, then it is on.

3. I believe both B1G and the SEC will go to 24 with 4 nationwide pods (6 teams each) or 6 pods (4 teams each). This means both SEC and B1G have room for 8 more teams each. Among those 16 spots, there will be landing spots for the ACC schools that want to leave. Of course, this has to all work out for the final TV contract.

Not sure if this will happen, but I believe administrators at schools like Clemson and FSU are definitely looking at this option right now.

 

[Jimdish255]

AND consider, the B10 regularly asks new schools to take very little money for the first 5 years anyway.

ND could demand from them that they get the full B10 amount to make up for the shortfall.

If the B10 is serious they absolutely put the best deal on the table and let ND know the ACC is going to get raided regardless. Could ND wait? Sure, but once the ACC is weakened their leverage dissipates and the financial incentives may dissipate as well. ND should take the best deal they can get now but being ND, they will likely wait until the ACC starts losing it's best schools.

 

[noeynox]

It will be in their best interest because once these ACC schools announce their intention to leave the entire conference will be in limbo.

You seem stuck on a binary result. The GoR is enforced, or it’s dismantled. The answer is really none of the above or a variation.

The GoR is what is going to force everyone to the table but it will not stop anyone from leaving because these schools will be smart enough to cut their losses and settle rather than carry on for years in dead conference which will be damaging in other ways.

Your discounting the fact that Wake BC types are going to go from making like 36 million in conference payouts for the next 14 years, keep in mind that number goes up every year until the tile end of the contract, so that Clemson and others can go make north of 50+ million a year, in order to be in a conference that is perhaps paying them 13-14 million a year? How much would the schools leaving have to pay the schools staying to offset such a number. I think we can all agree the ACC is on borrowed time, but it's death will be closer to the end of the GOR than now. We have seen it play out with the last 2 big moves TexaHoma and now ScLa. Both moves are happening toward the end of their GOR.

 

[ZooCougar]

Your discounting the fact that Wake BC types are going to go from making like 36 million in conference payouts for the next 14 years, keep in mind that number goes up every year until the tile end of the contract, so that Clemson and others can go make north of 50+ million a year, in order to be in a conference that is perhaps paying them 13-14 million a year? How much would the schools leaving have to pay the schools staying to offset such a number. I think we can all agree the ACC is on borrowed time, but it's death will be closer to the end of the GOR than now. We have seen it play out with the last 2 big moves TexaHoma and now ScLa. Both moves are happening toward the end of their GOR.

Schools leaving the ACC to the B1G or SEC will go from $36M to AT LEAST $100M a year.

LOL. They will figure it out. It’s adorable that people think Wake Forest is going to gum up the works.

 

[upstater]

That’s what I’m thinking. Part of the deal will be that Notre Dame keeps their home games on NBC.

Nope. Won't go for that, won't go for that. No can do.

 

[SU1968]

No school has broken a grant of right rights to date. Many last summer just assumed Texas and Oklahoma could negotiate out. The Big 12 had/has little to no reason to oblige. Hence the Sooners and Longhorns will be playing a Big 12 schedule in 2022. My guess is that both will again in 2023.

Notre Dame seems to be in a much a different position. The Irish granted their media rights to the ACC only for their Olympic sports. I suspect they could easily absorb that loss.

Plus basketball. ND is a full member of the ACC except for football.

 

[ZooCougar]

No school has broken a grant of right rights to date. Many last summer just assumed Texas and Oklahoma could negotiate out. The Big 12 had/has little to no reason to oblige. Hence the Sooners and Longhorns will be playing a Big 12 schedule in 2022. My guess is that both will again in 2023.

Notre Dame seems to be in a much a different position. The Irish granted their media rights to the ACC only for their Olympic sports. I suspect they could easily absorb that loss.

They don’t need to break it. From a cost benefit it’s better to just let it expire since it is so close.

It will be fun to see how the ACC handles this. But they are either way if certain schools want to leave.

 

[Waquoit]

Isn't it looking more and more like we're gonna get the band back together?

 

[noeynox]

Schools leaving the ACC to the B1G or SEC will go from $36M to AT LEAST $100M a year.

LOL. They will figure it out. It’s adorable that people think Wake Forest is going to gum up the works.

Yeah but it's not just Wake. Your talking like 10 schools letting 4 leave early and relegating themselves MUCH sooner. That's why IMO if you had 8 schools getting poached, in theory you could dissolve the conference. Again, I just point to the the last big 2 moves happening at the end GOR. For years Texas and Oklahoma refused on extending any GOR. It was publicly discussed the last few years, they opposed it and we saw why.

 

[nelsonmuntz]

Schools leaving the ACC to the B1G or SEC will go from $36M to AT LEAST $100M a year.

LOL. They will figure it out. It’s adorable that people think Wake Forest is going to gum up the works.

The ACC schools hold all the cards in the negotiation. If Clemson is pulling out $33 million a year from the ACC, and would get $115 million from the Big 10 or SEC, then it would be worth it for Clemson to leave if the ACC would get $82 million a year from the Big 10. Is Clemson willing to pay $82 million (and growing) per year until 2037 or whenever the ACC GOR ends? That would be the opening position for me if I was Wake Forest's President.

 

[ZooCougar]

The ACC schools hold all the cards in the negotiation. If Clemson is pulling out $33 million a year from the ACC, and would get $115 million from the Big 10 or SEC, then it would be worth it for Clemson to leave if the ACC would get $82 million a year from the Big 10. Is Clemson willing to pay $82 million (and growing) per year until 2037 or whenever the ACC GOR ends? That would be the opening position for me if I was Wake Forest's President.

No. Because in a settlement they will only end up paying $33-36M. Good luck to Wake Forest. I don’t think anyone will want to go to court over this.

 

[shizzle787]

I really hope we can make this thread just key tweets with no commentary. Keep the commentary to the non-key tweets thread.

 

[CL82]

Still a crazy amount but more palatable than 400 million.

Yeah, I think it’s still high. I think the right number is actually closer to $108 million. $52 million exit fee plus the value that Notre Dame currently gets from the ACC for its basketball an Olympic sports rights which I think is $4 million a year. So $52 million + $56 million is $108 M.