Look out for the Big 12 GOR details

[UConn Dan]

Kyle S. Lamb (@Kyle_Lamb)
2/8/13, 2:59 PM
I received the Big 12 Grant of Rights addendum today through an open records request w/Oklahoma. Will have more details on that later!

 

[kyleslamb]

OK here is an overview of the Big 12 Grant of Rights agreement. This agreement was obtained by an Open Records request through the University of Oklahoma, being a signed contract by a public university.

Big 12 Grant of Rights overview:

* The agreement is a signed addendum by member schools dated July 1, 2012 to the television agreement made with the Big 12, ESPN and FOX. The agreement lasts through June 30, 2025

* All prospective members of the league must agree to sign and be added to the addendum as a condition of membership

* The Grant of Rights does not transfer ownership of rights, but rather grants rights to the league to fulfill the television contract for the duration of the agreement. It does, however, give the league ownership/copyright of an audiovisual reproduction

* The league is granted rights to all games present and future that are currently given to television partners, which constitutes home football and basketball games, excepting certain third tier games ("retained rights"). The school, even if it elects to leave the Big 12 conference, will continue to have its "retained rights" meaning that any game not exercised by television partners, would revert back to the school (to presumably be contracted back to a new league).

* This means that essentially the league retains all future tier-1 rights through 2025 of home contests, except the existing rights the schools have to broadcast one home football game and select home basketball games.

* There is no exit fee or buyout specifically stated in the addendum

* Additionally, the institution retains all rights and ownership to ancillary programming

 

[UConn Dan]

OK here is an overview of the Big 12 Grant of Rights agreement. This agreement was obtained by an Open Records request through the University of Oklahoma, being a signed contract by a public university.

Big 12 Grant of Rights overview:

* The agreement is a signed addendum by member schools dated July 1, 2012 to the television agreement made with the Big 12, ESPN and FOX. The agreement lasts through June 30, 2025

* All prospective members of the league must agree to sign and be added to the addendum as a condition of membership

* The Grant of Rights does not transfer ownership of rights, but rather grants rights to the league to fulfill the television contract for the duration of the agreement. It does, however, give the league ownership/copyright of an audiovisual reproduction

* The league is granted rights to all games present and future that are currently given to television partners, which constitutes home football and basketball games, excepting certain third tier games ("retained rights"). The school, even if it elects to leave the Big 12 conference, will continue to have its "retained rights" meaning that any game not exercised by television partners, would revert back to the school (to presumably be contracted back to a new league).

* This means that essentially the league retains all future tier-1 rights through 2025 of home contests, except the existing rights the schools have to broadcast one home football game and select home basketball games.

* There is no exit fee or buyout specifically stated in the addendum

* Additionally, the institution retains all rights and ownership to ancillary programming

Thanks Kyle!

We need a lawyer on this stat

 

[Fishy]

There's nothing new there.

 

[kyleslamb]

There's nothing new there.

Did you know that contrary to public opinion, the schools did not sign away "all" their rights? They actually will retain all rights to home games not picked up by the television partners. That is not how it's been portrayed in the media. And while it may have been common sense, only home games apply to the G.O.R. as those are the only games in which the conference owns rights to.

 

[pj]

Is it only conference home games or all home games? I'm assuming the former.

 

[Fishy]

Did you know that contrary to public opinion, the schools did not sign away "all" their rights? They actually will retain all rights to home games not picked up by the television partners. That is not how it's been portrayed in the media. And while it may have been common sense, only home games apply to the G.O.R. as those are the only games in which the conference owns rights to.

All of that was known previously.

Not insulting you - actually impressed that someone FOIL'd a school for something like this, but yes, this was all known.

 

[kyleslamb]

Is it only conference home games or all home games? I'm assuming the former.

I believe it's all home games except those retained within the bylaws by the institution (which I believe is one football game and up to four or six basketball games if memory serves me correctly). Because the television agreement wasn't subject to the request, though, I can't verify that with 100% certainty. I believe that's how it's written in the bylaws though.

 

[Scoot]

Forgive me for my ignorance I don't understand most of what that means,but does this mean the likelihood of Texas or Oklahoma going to another conference? I lurk these boards often and it seems most of you think Super conferences are the future of college sports, I find it hard to believe the PAC 10 will settle for teams like Boise for expansion. I would think they would go for bigger fish! If it wasn't for the lousy Acc television contract would they have a better chance of outlasting the Big 12? Thanks

 

[Dann]

all i want to know is this

how many votes does it take to blow up the league
majority? so 6? or 3/4 so 8 votes...

the answer to that will be how many teams the pac takes. just a matter of if kst and baylor get left out with wvu and tcu or not.

 

[kyleslamb]

All of that was known previously.

Not insulting you - actually impressed that someone FOIL'd a school for something like this, but yes, this was all known.

I didn't take offense to it, but I beg to differ as I had seen most people assume that all television rights were granted to the league. I have not seen many people correctly surmise that it's only right of first refusal nor have I seen it correctly speculated that all retained rights will stay with the institution even upon leaving.

 

[pj]

I didn't take offense to it, but I beg to differ as I had seen most people assume that all television rights were granted to the league. I have not seen many people correctly surmise that it's only right of first refusal nor have I seen it correctly speculated that all retained rights will stay with the institution even upon leaving.

It makes sense that the contract would only strengthen the status of rights previously assigned to the league or its TV contract; if new rights had been assigned it would require modification of many third-party contracts and would disrupt offerings like the Longhorn Network, and we didn't hear of such negotiations.

I wasn't aware though that the conference had rights to non-conference home games, that seems quite odd. We always hear of schools getting the revenue from non-conference home games.

If the B12 truly does control the rights to non-conference home games, the contract is not nearly as favorable as it appears.

 

[kyleslamb]

It makes sense that the contract would only strengthen the status of rights previously assigned to the league or its TV contract; if new rights had been assigned it would require modification of many third-party contracts and would disrupt offerings like the Longhorn Network, and we didn't hear of such negotiations.

I wasn't aware though that the conference had rights to non-conference home games, that seems quite odd. We always hear of schools getting the revenue from non-conference home games.

If the B12 truly does control the rights to non-conference home games, the contract is not nearly as favorable as it appears.

Generally you are absolutely correct that non-conference games are negotiated separately. My understanding was the games were included in the Big 12's agreement, but again, without seeing the TV agreement itself, I can't say that with any absolute certainty. If in fact those rights are not included, then essentially the Big 12 would only retain about four games a year if someone left. Obviously that means it's not as big a deterrent as people originally assumed.

Edit: after going back and looking at the previous reports, it does in fact seem to include non-conference games for football and men's basketball. However, while institutions retain one football game and four basketball games each year (at FOX's designation, apparently), there is an option to sublicense additional games for a set fee.

 

[UConn Dan]

If we had to put a $ estimate on this than $20m annually perhaps? Over the next 12 years. That's one hell of a buyout.

I guess for a team to leave we'd be looking at the league dissolving for that to happen or waiting it out till 2025.

But maybe we're missing something. Ohio States Gee mentioned the possibity of THREE 20 team leagues. That would mean B1G SEC and PAC.

 

[upstater]

This is not really good news for UConn. Florida St. might not want to leave for a B12 that is still relatively unstable, unless it feels strongly that no one in their right minds wants to go play games on the west coast.

 

[huskypantz]

Hypothetical:

School X leaves the b12 for the B1G.
B12 retains media rights for tier 1/2 until 2025 as per above.
In accordance with that, B12 is likely liable for full payment to school X for those media rights.
School X brings their tier 3 and whatever games don't get picked up to the B1G and get a reduced payment on top of annual B12 income
B1G gets the added content for school X's road games and tier 3

Here are the kickers -
1. If you're the B12, why would you want school X to take up one of your tier 1 broadcasts playing a B1G school? You don't. You don't want them to get a single tier 1 broadcast and you want them to get the crappiest possible tv slots for tier 2- BUT - you don't control their schedule any more (the B1G does). So forget trying to slot them into a Friday night broadcast.
2. School X leaves and is replaced by School Y. How exactly do you pay school Y? School Y has to sign the GOR so you better believe they want a full revenue share. Now you need to go back to Fox/ESPN and renegotiate for another share - when they know darn well that the B12 is not going to want "school X vs B1G" taking slots from current conference members. What incentive is there for Fox/ESPN to give you another 20 million per year?

The GOR is a better way to make teams think twice about leaving and it guarantees media content and income for the conference, but ultimately it will create enough issues to warrant a settlement.

 

[kyleslamb]

Hypothetical:

School X leaves the b12 for the B1G.
B12 retains media rights for tier 1/2 until 2025 as per above.
In accordance with that, B12 is likely liable for full payment to school X for those media rights.
School X brings their tier 3 and whatever games don't get picked up to the B1G and get a reduced payment on top of annual B12 income
B1G gets the added content for school X's road games and tier 3

Here are the kickers -
1. If you're the B12, why would you want school X to take up one of your tier 1 broadcasts playing a B1G school? You don't. You don't want them to get a single tier 1 broadcast and you want them to get the crappiest possible tv slots for tier 2- BUT - you don't control their schedule any more (the B1G does). So forget trying to slot them into a Friday night broadcast.
2. School X leaves and is replaced by School Y. How exactly do you pay school Y? School Y has to sign the GOR so you better believe they want a full revenue share. Now you need to go back to Fox/ESPN and renegotiate for another share - when they know darn well that the B12 is not going to want "school X vs B1G" taking slots from current conference members. What incentive is there for Fox/ESPN to give you another 20 million per year?

The GOR is a better way to make teams think twice about leaving and it guarantees media content and income for the conference, but ultimately it will create enough issues to warrant a settlement.

Terrific post. The other thing is that any new league could reduce its own revenue share by the amount received by the incoming school from the Big 12 in order to still create 'balanced' revenue sharing.

 

[Marty Jackson]

Hypothetical:

School X leaves the b12 for the B1G.
B12 retains media rights for tier 1/2 until 2025 as per above.
In accordance with that, B12 is likely liable for full payment to school X for those media rights.
School X brings their tier 3 and whatever games don't get picked up to the B1G and get a reduced payment on top of annual B12 income
B1G gets the added content for school X's road games and tier 3

Here are the kickers -
1. If you're the B12, why would you want school X to take up one of your tier 1 broadcasts playing a B1G school? You don't. You don't want them to get a single tier 1 broadcast and you want them to get the crappiest possible tv slots for tier 2- BUT - you don't control their schedule any more (the B1G does). So forget trying to slot them into a Friday night broadcast.
2. School X leaves and is replaced by School Y. How exactly do you pay school Y? School Y has to sign the GOR so you better believe they want a full revenue share. Now you need to go back to Fox/ESPN and renegotiate for another share - when they know darn well that the B12 is not going to want "school X vs B1G" taking slots from current conference members. What incentive is there for Fox/ESPN to give you another 20 million per year?

The GOR is a better way to make teams think twice about leaving and it guarantees media content and income for the conference, but ultimately it will create enough issues to warrant a settlement.

are you assuming that school x will still be paid by the big12 even though it has moved to the big10?

 

[pj]

are you assuming that school x will still be paid by the big12 even though it has moved to the big10?

Presumably that's the way it works, since if you're required to perform one part of a contract usually the counterparty is required to perform its part.

So the GoR may not be that great a disincentive to leave. If you go from the B12 to the Pac, B1G, or SEC, you basically lose your B1G revenue and keep your B12 revenue for the duration of the contract. But since the B12 can't adequately market Pac/B1G/SEC games, it has an incentive to sell the departing team's content to its new conference. So they'll do a deal -- new conference will buy out the B12 team's GoR for $5-10 mn/year. B12 gets $75-150 mn over the life of the contract.

It's more the length of the B12 contract, out to 2025, that makes the GoR powerful, not the value of it. As the contract shortens, the GoR becomes less significant than the ACC's $50 mn exit fee, assuming that is enforceable.

 

[huskypantz]

Just imagine if OU left the B12 for the B1G. In the current setup, the networks get first dibs at the games they want and the rest fall into the 2 week scheduling window. However, the B1G doesn't have to comply with that scheduling window if OU is playing a home conference game. They don't have to comply with any scheduling restrictions. It would not matter whether Fox/ESPN want OU to play a Thursday night game as part of the B12 tv contract - because they have no control over the B1G conference schedule since the game doesn't fall under their media agreement(I'm ignoring the B1G's media connections to Fox/ESPN as that could be another conversation). There are only so many tier 1/tier 2 slots for the B12 per week - so would you p1ss off a loyal conference member by bumping them off a tier 1 game? If you bump the game off tier 1 and 2, then the B1G can put the game wherever it wants. Imagine 10 years of that mess.

 

[pj]

Just imagine if OU left the B12 for the B1G. In the current setup, the networks get first dibs at the games they want and the rest fall into the 2 week scheduling window. However, the B1G doesn't have to comply with that scheduling window if OU is playing a home conference game. They don't have to comply with any scheduling restrictions. It would not matter whether Fox/ESPN want OU to play a Thursday night game as part of the B12 tv contract - because they have no control over the B1G conference schedule since the game doesn't fall under their media agreement(I'm ignoring the B1G's media connections to Fox/ESPN as that could be another conversation). There are only so many tier 1/tier 2 slots for the B12 per week - so would you p1ss off a loyal conference member by bumping them off a tier 1 game? If you bump the game off tier 1 and 2, then the B1G can put the game wherever it wants. Imagine 10 years of that mess.

Yes ... and moreover the B1G can schedule all the marquee matchups on the road so it has the rights. Oklahoma would for the duration of the GoR to the B12 play Iowa, Minnesota, Indiana, and Northwestern at home and Michigan, Ohio State, Nebraska, Penn State, and Wisconsin on the road. So B1G owns the quality games and the B12 gets the crappy games it doesn't value, but still has to pay Oklahoma $20 mn/yr in exchange for the rights to Oklahoma-Indiana etc.

If the B1G wanted to ruin whatever network owns the B12, it would raid it in precisely this way.

This raises the potential to have network wars where ESPN affiliated conferences raid Fox conferences and vice versa.

 

[Marty Jackson]

im lost on the notion that ou can walk away and still collect a full share from a conference it no longer belongs to. and collect from a new conference at the same time.

i know this board is a collection of experts but something doesnt add up if thats true.

 

[pj]

im lost on the notion that ou can walk away and still collect a full share from a conference it no longer belongs to. and collect from a new conference at the same time.

i know this board is a collection of experts but something doesnt add up if thats true.

You collect from the prior conference because you are giving them your media rights, and that is the quid pro quo. You aren't going to get to collect from the new conference because you aren't able to give them your media rights. Maybe you have some rights you can still assign to the new conference so the payout from the new conference may not be zero, but it will be small.

 

[Dann]

this is what kyle and others argue on the wvu site a while back but there was just to many billys to convince. everything is just confirmed. the gor doesn't keep u in the b12, it keeps u from leaving until th price is extremely good elsewhere that its worth the hassel to leave and fight all the issues.

but my question goes unanswered becuase thats the key here. fox owns more than espn in the b12. at some point fox is going to hand espn its ass in the b10 race and fox has the pac. fox is going to turn around to espn and say, if we blow up the b12, your little acc pet lives can can add to get to 16 or 18. espn listens, and they work it out. the pac will have its taste of 4 to 6 b12 teams and espn will let them out of its part of the gor. in return, espn will add wvu no issues and i'm sure some other $ stuff will be taken care of.

tcu in all of this will look like the project that failed just like bsu did. back to the mwc bu thy will take a ton of texas schools with them(uh/smu/bay/utep...) and go big for that conf to help them out best.

the b10 will get to 16 or 18 and the acc will do the same. that means uconn, cincy, wvu will get picked and maybe 1 or 2 more. i can easily see the acc getting ist, temple, mem and usf all being in play for a slot. u will officially have a north, south east and west in college football. just a matter of time.

what the gor did, was give texas and ok a decade of trying to figure out how they can get the sec to go to 18 and mess right with them. thats what no one is talking about because they think its to many egos in one room. thats where the big time $ is tho, and if u dont think texas and ok smell that, then i dont know what to tell u. theres a reason the sec expnded west and not east. atm? sure but why on earth mizzu over a va/nc school? get with the program. silve tipped his hat a while back just like delany did. they are not shy about there goals.

 

[kyleslamb]

im lost on the notion that ou can walk away and still collect a full share from a conference it no longer belongs to. and collect from a new conference at the same time.

i know this board is a collection of experts but something doesnt add up if thats true.

The Grant of Rights is an addendum to the television agreement. Teams are getting paid by the conference in exchange for granting the league its television rights to broadcast home football and men's basketball games.

Basically the idea being mentioned here is that in order for the Grant of Rights to be valid after a team leaves, the Big 12 must fulfill its end of the contract (i.e. paying the team). Those rights aren't being given for free... they're paying for the rights. Any contract must give consideration from both sides to be valid. So it stands to reason that if the league stopped paying a team after it leaves, then it cannot enforce the right to broadcast the games because it would be a breach of contract.