Non-Key Tweets

[JeepCSC]

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So if total expenses are $800 million does that mean that exit fees equal $2.4 billion? That can’t be right.

It’s the budget of the ACC office, not the budget of all ACC members combined. As mentioned above, the ACC office budget is the same as a full school share.

 

[FfldCntyFan]

Not sure what you are implying...but the withdrawal fee (exit fee) is three times the total operating budget of the conference...which is currently $36 million (the conference takes a share equal to a member's share).

Wasn't implying anything, merely pointing out the flaw in 82's thought process.

If this went over your head I apologize but all you need to do is read the post I was responding to.

 

[billybud]

Wasn't implying anything, merely pointing out the flaw in 82's thought process.

If this went over your head I apologize but all you need to do is read the post I was responding to.

oh...I did not see your reference to a post that you were replying to....

I see why...I do not see CL82's posts. I did page back a page to see what you might be responding to.

 

[CL82]

Wasn't implying anything, merely pointing out the flaw in 82's thought process

Or if not my thought process then my ability to read little tiny graphics on my phone…

 

[CL82]

So let me just restate my original post with the corrected assumptions:

Let’s say the value of the ESPN contract is 40 million per school. We know from the special section Notre Dame in the ACC bylaws that the value of football is 80% of that contract. Notre Dame football is independent and not a part of the ACC contract. so the value of Notre Dame‘s grant of rights to the ACC for everything but football would be equal to $8 million a year. The ACC grant of rights runs through 2036. So Notre Dame is theoretically on the hook for $112 million over 14 years. If you consider the time value of money and discount that back to a single payment, depending upon the assumption to use, it’s probably 70 million give or take.

Now keep in mind that’s just the grant of rights. They also have to pay whatever exit fee is applicable. The bylaws provide that the exit fee is equal to three times the operating budget of the ACC. The ACC takes a full membership share for their operating budget. So under our hypothetical $40 million annual distribution the exit fee would be $120 million. That means collectively they can get out of their partial conference membership for approximately $190 to $212 million.

Now, if you had the opportunity to make $100 million per year, every year on a go forward basis, would you be willing to pay $190 million for that privilege? If Notre Dame decides it wants to leave the ACC, the cost of exiting isn’t going to stop it.

Thanks to @TerryD, @JeepCSC and @FfldCntyFan for their help filling in the pieces

 

[CAtlantic]

 

[SU1968]

Because of perceived value...the Irish are one of the most watched teams in the country. And there aren't many huge brands left to grab.

I answerd your question straight up..but realize it may not have been a question but a "grump".

 

[goldendomer]

That is the type of non-key tweet I have come to love and anticipate.

 

[TerryD]

So let me just restate my original post with the corrected assumptions:

Let’s say the value of the ESPN contract is 40 million per school. We know from the special section Notre Dame in the ACC bylaws that the value of football is 80% of that contract. Notre Dame football is independent and not a part of the ACC contract. so the value of Notre Dame‘s grant of rights to the ACC for everything but football would be equal to $8 million a year. The ACC grant of rights runs through 2036. So Notre Dame is theoretically on the hook for $112 million over 14 years. If you consider the time value of money and discount that back to a single payment, depending upon the assumption to use, it’s probably 70 million give or take.

Now keep in mind that’s just the grant of rights. They also have to pay whatever exit fee is applicable. The bylaws provide that the exit fee is equal to three times the operating budget of the ACC. The ACC takes a full membership share for their operating budget. So under our hypothetical $40 million annual distribution the exit fee would be $120 million. That means collectively they can get out of their partial conference membership for approximately $190 to $212 million.

Now, if you had the opportunity to make $100 million per year, every year on a go forward basis, would you be willing to pay $190 million for that privilege? If Notre Dame decides it wants to leave the ACC, the cost of exiting isn’t going to stop it.

Thanks to @TerryD, @JeepCSC and @FfldCntyFan for their help filling in the pieces

There is also the five football games a year deal and the "ND football can only join the ACC " deal.

Both run through 2036. If ND breaches those deals, that would mean additional damages paid to the ACC.

 

[goldendomer]

There is also the five football games a year deal and the "ND football can only join the ACC " deal.

Both run through 2036. If ND breaches those deals, that would mean additional damages paid to the ACC.

My best estimate is 130 million to 200 to make a clean, expensive break. Do think that is in the ballpark? Or will/would it drift higher?

 

[Rufus]

Even if it costs $200 million for Notre Dame to make a clean break from the ACC, that is less than two years worth of B1G media rights revenue. Not counting playoff revenue, bowl revenue, basketball tournament revenue, etc.

Plus, the media rights revenue will only increase with ND as a member of the B1G, which in turn makes it easier to pay that off.

 

[goldendomer]

Even if it costs $200 million for Notre Dame to make a clean break from the ACC, that is less than two years worth of B1G media rights revenue. Not counting playoff revenue, bowl revenue, basketball tournament revenue, etc.

Plus, the media rights revenue will only increase with ND as a member of the B1G, which in turn makes it easier to pay that off.

For sure, it would be worth it. It would be the largest exit fee in history though. I assume we may get assistance if that occurred.

 

[CL82]

There is also the five football games a year deal and the "ND football can only join the ACC " deal.

Both run through 2036. If ND breaches those deals, that would mean additional damages paid to the ACC.

The five football games are expressly out of conference games according to the Notre Dame section of the contract. Would the ACC even have standing to pursue that? I guess the individual schools could.

I’ve posted this before but I have trouble with the damages for the whole “we’re not promising to join the league, but if we do you’ll be your league” thing. Notre Dame has every right not to join the ACC. So what are the damages if they join someone else? I don’t know.

But the bottom line is, it’s a lot of money, but probably not enough to make moving to the big 10 economically unfeasible.

 

[CL82]

For sure, it would be worth it. It would be the largest exit fee in history though. I assume we may get assistance if that occurred.

They probably give you the “Rutgers“ deal where they would front some of your anticipated earnings. For a school as deep pocketed as Notre Dame, I’m not sure that makes sense though.

 

[dayooper]

They probably give you the “Rutgers“ deal where they would front some of your anticipated earnings. For a school as deep pocketed as Notre Dame, I’m not sure that makes sense though.

The “Rutgers” deal was a buyin to the BTN. Since each school has an ownership stake in the company (at that time ~50%), the smaller yearly payout was was the buy in for each school.

 

[JeepCSC]

USC and UCLA don’t have to buy-in. Notre Dame wouldn’t either. And I’m sure if they asked, the Big 10 would “loan“ them interest-free the money to buy out the ACC contract, and then forgive the loan a decade or so later.

 

[dayooper]

SWW we s are

Absolutely! Those 3 schools add/would add so much to the Big10 in both visibility and brands. If ND wanted to leave, the Big10 would most assuredly assist.

 

[CAtlantic]

 

[TerryD]

USC and UCLA don’t have to buy-in. Notre Dame wouldn’t either. And I’m sure if they asked, the Big 10 would “loan“ them interest-free the money to buy out the ACC contract, and then forgive the loan a decade or so later.

Agree to an extent (not sure of loan forgiveness).

If the Big Ten insisted that ND take a smaller payout for years AND entirely fund the $200 million plus ACC exit, I don't think that would be a winning pitch to secure ND into the Big Ten.

 

[dayooper]

Agree to an extent (not sure of loan forgiveness).

If the Big Ten insisted that ND take a smaller payout for years AND entirely fund the $200 million plus ACC exit, I don't think that would be a winning pitch to secure ND into the Big Ten.

If they didn’t require USC or UCLA to buy in to the BTN, there’s no way that they will make ND pay.

The reduced payout was to buy into the BTN. Unlike ESPN owning the SEC channel outright, the Big10 owns about 40% while Fox owns the rest. The Big10 just sold 10% back to Gox.

 

[CAtlantic]

 

[CL82]

Seeing a lot of UConn mentions. Where there’s smoke there’s fire…

 

[goldendomer]

View attachment 78054
Seeing a lot of UConn mentions. Where there’s smoke there’s fire…

 

[goldendomer]

I remember this "insider" NW from way back 2011-12. I assume it is the same dude.

 

[Rufus]

Part of the reason USC and UCLA get full shares right away is that they join at the start of a new media rights contract. When Nebraska, Maryland and Rutgers joined, the B1G was in the middle of existing contracts that did not pay out more money until the contract expired. The B1G deliberately did that because they knew they would make more in the long run going to the open market than extending an existing contract. When Nebraska joined, they were paid with the money the B1G earned from starting the B1G Championship Game.

The increase in the worth of the new media rights package with USC and UCLA more than covers the buy-in for each schools share of the BTN.