Rumor- UCONN Pursuing ACC Membership?

[FlippinCrazy!]

UMASS lucked into hiring one of the better basketball coaches in the country last year in Frank Martin. If they were added to the Big East their recruiting prowess would improve significantly, see Houston for an example of what a good coach and a conference upgrade can do for a program.

People continuously regurgitate that "UMASS doesn't move the needle", nonsense! The Big East upgrade would create a huge resurgence of Massachusetts interest in UMASS basketball and that is the real reason UCONN and probably Providence would try to block them but make no mistake about it if the Big East wanted to expand UMASS is the best realistic candidate for that expansion.

Remember expansion is about adding TV sets. UMASS is the state flagship of a state with over 7 Million. You can't find a better candidate.

I used to live fairly close to UMass and now live in Boston. Take my word that no one in the state cares about their athletics. There are literally more UConn fans than UMass fans in the area.

 

[LoyalFanCT]

Your understanding is not correct. The exit fee is three times earnings. That’s about $120 million. The GOR is valued at about $350 million if FSU were to leave after this season. So, assuming that the ACC would agree to settle to take a lump sum payment instead of just holding the media rights for FSU, they are looking at about $470 million to leave.

I could see an arrangement where Connecticut comes in takes a full share of broadcast rights, which might well be reduced, but does not get a share of FSU’s exit fees.

For what it’s worth if FSU and Clemson were to leave you’d be looking at $970 million and exit fees and GOR settlement costs. That can subsidize the remaining teams earnings for a considerable period of time.

FSU would pay about $470M to leave. The B10 pays $48.6 million per school each year. So is that about 10 years worth of revenue? Or am I missing something.

 

[ZooCougar]

LOL. It has nothing to do with what I prefer. It is only about dummies like you not realizing it's never going to happen.

Oh if it happens it’s only because the ACC is dying.

My original comment stands. There are actually idiots that prefer the Big East and they are utterly lawst.

 

[CL82]

FSU would pay about $470M to leave. The B10 pays $48.6 million per school each year. So is that about 10 years worth of revenue? Or am I missing something.

That’s why they have an incentive to stay until the GOR terminates. Supposedly FSU’s attorneys think they have someway to beat the GOR. I’m not sure what that is unless they think they can orchestrate blowing up the whole conference.

 

[huskymedic]

FSU would pay about $470M to leave. The B10 pays $48.6 million per school each year. So is that about 10 years worth of revenue? Or am I missing something.

“Big Ten schools will receive the same distribution in 2023-24 as it will this year, roughly $60 million per school. The payout will increase slightly in the second year of the deal before it jumps to roughly $100 million per school, annually, starting in 2025. That's based purely on the media deal and does not include revenue from making the College Football Playoff, bowl games or NCAA Tournament.”

 

[CTFAN4LIFE]

Your understanding is not correct. The exit fee is three times earnings. That’s about $120 million. The GOR is valued at about $350 million if FSU were to leave after this season. So, assuming that the ACC would agree to settle to take a lump sum payment instead of just holding the media rights for FSU, they are looking at about $470 million to leave.

I could see an arrangement where Connecticut comes in takes a full share of broadcast rights, which might well be reduced, but does not get a share of FSU’s exit fees.

For what it’s worth if FSU and Clemson were to leave you’d be looking at $970 million and exit fees and GOR settlement costs. That can subsidize the remaining teams earnings for a considerable period of time.

And if they can reduce the exit fee by one-third to half of the 120m exit fee, then the total nut becomes in the range of around 410m this season. Still a really big nut. It's the GOR that is standing in the way, so if FSU is going to try to get out of jail, it's the GOR that needs to be solved/reduced...

When MD left the ACC, didn't they create a legal dust storm pertaining to how they were against the GOR and were "forced" to go with it when enacted by the other conference schools? I might be wrong on that.

FSU seems to be the school thinking the most about some sort of legal fight/negotiation. Just not sure what their specific tact will be but it just seems like they are getting more and more public about it. Like some sort of public pressure campaign is beginning.

Can they prove some sort of hardship that could be settled in an arbitration of sorts? An arguement based on the school showing how they are being harmed by not being able to achieve what they are worth on the "open market" (as an independent or as part of another conference)?

It just seems that if you have one party to a contract/by-law that is being harmed/undervalued far more than other parties (i.e. FSU is worth far more than other members) to the contract that they might be able to wiggle out of the deal and remedy it by paying some sort of damages to exit early. I'm no contract lawyer, so can anyone here that is chime in?

 

[CL82]

And if they can reduce the exit fee by one-third to half of the 120m exit fee, then the total nut becomes in the range of around 410m this season. Still a really big nut. It's the GOR that is standing in the way, so if FSU is going to try to get out of jail, it's the GOR that needs to be solved/reduced...

When MD left the ACC, didn't they create a legal dust storm pertaining to how they were against the GOR and were "forced" to go with it when enacted by the other conference schools? I might be wrong on that.

FSU seems to be the school thinking the most about some sort of legal fight/negotiation. Just not sure what their specific tact will be but it just seems like they are getting more and more public about it. Like some sort of public pressure campaign is beginning.

Can they prove some sort of hardship that could be settled in an arbitration of sorts? An arguement based on the school showing how they are being harmed by not being able to achieve what they are worth on the "open market" (as an independent or as part of another conference)?

It just seems that if you have one party to a contract/by-law that is being harmed/undervalued far more than other parties (i.e. FSU is worth far more than other members) to the contract that they might be able to wiggle out of the deal and remedy it by paying some sort of damages to exit early. I'm no contract lawyer, so can anyone here that is chime in?

Didn’t Maryland leave just before the GOR went into effect?

 

[uconndogs]

FWIW.....Here's a story from OU Insider that gives that take from 2018 for anyone who wants to read this stuff,

Conference re-alignment will come - shaped by tech, not TV

“Conference realignment will come,” he said (high ranking executive at Amazon) , “but probably not in the way you’re thinking.” “We already have more cash than ABC/ESPN, NBC or CBS” he said. “And, In another five or six years, it won’t even be close. And too, ”the tech companies are far more advanced than the networks when it comes to knowing how to use the future broadcast technologies, (streaming) and that gap is growing to"........

" Again, back to my friend at Amazon. “We’re still seven or eight years away,” he said, “but if we had to restructure the landscape today, we would not start by negotiating with a conference. We don’t care about the SEC, Big 12 of Big 10 as a whole. In our opinion, those entities are not our focus. “Instead, we would want to identify 30 or 40 teams that command the biggest audience. That may be by reputation or location, but generally we all know that there are members in every one of these conferences that frankly don’t move the needle. "

FWIW.....Here's a story from OU Insider that gives that take from 2018 for anyone who wants to read this stuff,

Conference re-alignment will come - shaped by tech, not TV

“Conference realignment will come,” he said (high ranking executive at Amazon) , “but probably not in the way you’re thinking.” “We already have more cash than ABC/ESPN, NBC or CBS” he said. “And, In another five or six years, it won’t even be close. And too, ”the tech companies are far more advanced than the networks when it comes to knowing how to use the future broadcast technologies, (streaming) and that gap is growing to"........

" Again, back to my friend at Amazon. “We’re still seven or eight years away,” he said, “but if we had to restructure the landscape today, we would not start by negotiating with a conference. We don’t care about the SEC, Big 12 of Big 10 as a whole. In our opinion, those entities are not our focus. “Instead, we would want to identify 30 or 40 teams that command the biggest audience. That may be by reputation or location, but generally we all know that there are members in every one of these conferences that frankly don’t move the needle. "

This is where we’re heading…..this is it!

 

[businesslawyer]

UMASS lucked into hiring one of the better basketball coaches in the country last year in Frank Martin. If they were added to the Big East their recruiting prowess would improve significantly, see Houston for an example of what a good coach and a conference upgrade can do for a program.

People continuously regurgitate that "UMASS doesn't move the needle", nonsense! The Big East upgrade would create a huge resurgence of Massachusetts interest in UMASS basketball and that is the real reason UCONN and probably Providence would try to block them but make no mistake about it if the Big East wanted to expand UMASS is the best realistic candidate for that expansion.

Remember expansion is about adding TV sets. UMASS is the state flagship of a state with over 7 Million. You can't find a better candidate.

And if they can reduce the exit fee by one-third to half of the 120m exit fee, then the total nut becomes in the range of around 410m this season. Still a really big nut. It's the GOR that is standing in the way, so if FSU is going to try to get out of jail, it's the GOR that needs to be solved/reduced...

When MD left the ACC, didn't they create a legal dust storm pertaining to how they were against the GOR and were "forced" to go with it when enacted by the other conference schools? I might be wrong on that.

FSU seems to be the school thinking the most about some sort of legal fight/negotiation. Just not sure what their specific tact will be but it just seems like they are getting more and more public about it. Like some sort of public pressure campaign is beginning.

Can they prove some sort of hardship that could be settled in an arbitration of sorts? An arguement based on the school showing how they are being harmed by not being able to achieve what they are worth on the "open market" (as an independent or as part of another conference)?

It just seems that if you have one party to a contract/by-law that is being harmed/undervalued far more than other parties (i.e. FSU is worth far more than other members) to the contract that they might be able to wiggle out of the deal and remedy it by paying some sort of damages to exit early. I'm no contract lawyer, so can anyone here that is chime in?

You don’t have the right to terminate a contract merely because it was a bad economic deal for you and you’ve now determined that you could do better. Business couldn’t operate if it were that easy to walk away. However, parties to a contract can walk away from a contract and pay the innocent party the amount that the innocent party has been damaged by the breach, and if that amount is far less than what the breaching party can make by walking away — well, that happens all the time.

 

[noeynox]

You don’t have the right to terminate a contract merely because it was a bad economic deal for you and you’ve now determined that you could do better. Business couldn’t operate if it were that easy to walk away. However, parties to a contract can walk away from a contract and pay the innocent party the amount that the innocent party has been damaged by the breach, and if that amount is far less than what the breaching party can make by walking away — well, that happens all the time.

How do you come to a number for the non breaching party or parties? An ACC without Florida State is a product that is going to attract less money when their contract goes to market again.

 

[CTFAN4LIFE]

You don’t have the right to terminate a contract merely because it was a bad economic deal for you and you’ve now determined that you could do better. Business couldn’t operate if it were that easy to walk away. However, parties to a contract can walk away from a contract and pay the innocent party the amount that the innocent party has been damaged by the breach, and if that amount is far less than what the breaching party can make by walking away — well, that happens all the time.

Yeah, that's what I figure would be the final scenario/hoop that FSU would jump through to get out. It just seems like they believe (rightly or wrongly) they have some angle to get out early. Seems they're getting more desperate and god knows what desperate people think and do.

 

[CTFAN4LIFE]

Didn’t Maryland leave just before the GOR went into effect?

Right you are...

USA TODAY

The ACC will keep the sum of $31,361,788 previously withheld.

www.usatoday.com

 

[businesslawyer]

How do you come to a number for the non breaching party or parties? An ACC without Florida State is a product that is going to attract less money when their contract goes to market again.

There is not a one sentence — or even one page — answer I can give you on calculating damages that will help. But juries take their shot at it on a daily basis and do the best they can. The fact that you can’t know with metaphysical certainty that any one amount is the “right” amount doesn’t stop judges and juries from having to do the best they can.

 

[CL82]

How do you come to a number for the non breaching party or parties? An ACC without Florida State is a product that is going to attract less money when their contract goes to market again.

Yeah, that’s the question, isn’t it? For the GOR maybe take the sum of the annual payments for the FSU broadcast rights due over the term of the contract and discount it back since it is received as a lump sum payment. On the other hand you could make the argument that it shouldn’t be based on FSU’s value in the ACC, but instead should be based on their much higher value in one of the P2 conferences.

 

[CONN78SEJ]

Oh if it happens it’s only because the ACC is dying.

My original comment stands. There are actually idiots that prefer the Big East and they are utterly lawst.

Was the ACC dying when they took BC and Syracuse? Was the Big Ten dying when they took Rutgers? I have to agree though that if there is anyone who prefers the Big East to the ACC, those same individuals must also be booking tours to Roswell NM.

 

[Sole]

If we are not talking money or football… just basketball… then I prefer the big east

 

[noeynox]

If we are not talking money or football… just basketball… then I prefer the big east

Sure but just the fact that there are rumblings, that some BE schools, not named UConn might be attractive options for the Big 12 kind of tells you where our priority has to be if there ever is a choice.

 

[FfldCntyFan]

How do you come to a number for the non breaching party or parties? An ACC without Florida State is a product that is going to attract less money when their contract goes to market again.

The departing school(s) and the conference would need to come to an agreement on the price of buying out of the commitment. If it is determined in a manner similar to business dealings (which been going on for quite some time) a calculation of present value of future cash flows multiplied by a discount rate would lead to a number (keep in mind the discount rate is arbitrary and each side will have a different view on what it should be). Negotiations will likely begin when one side proposes a number.

My best guess at the moment is that a full member will need to pay $200 million to $250 million to leave now. The conference may possibly want more as once schools start leaving the cost will drop significantly (which could motivate some schools to not want to be the first).

One thing I find fascinating is where all members of the then Big East were a quarter century ago. At that time who would have believed that in 25 years Rutgers would be in a better situation in terms of athletic department future than any other school in the conference.

 

[ZooCougar]

The departing school(s) and the conference would need to come to an agreement on the price of buying out of the commitment. If it is determined in a manner similar to business dealings (which been going on for quite some time) a calculation of present value of future cash flows multiplied by a discount rate would lead to a number (keep in mind the discount rate is arbitrary and each side will have a different view on what it should be). Negotiations will likely begin when one side proposes a number.

My best guess at the moment is that a full member will need to pay $200 million to $250 million to leave now. The conference may possibly want more as once schools start leaving the cost will drop significantly (which could motivate some schools to not want to be the first).

One thing I find fascinating is where all members of the then Big East were a quarter century ago. At that time who would have believed that in 25 years Rutgers would be in a better situation in terms of athletic department future than any other school in the conference.

Based on this awfully made PowerPoint slide shown to FSU Trustees, the $200M might be well worth it.

 

[FfldCntyFan]

Based on this awfully made PowerPoint slide shown to FSU Trustees, the $200M might be well worth it.

For the right school $200 million would be well worth it. An additional piece of the equation however is if the school(s) leaving the ACC will need to also buy-in to the B1G or SEC.

Also, a school (full member) can approach the conference offering $200 million only to have the conference respond $400 million. New ground will be broken when this happens and speculation is all anyone has to base the buyout calculations on. Where this differs from anything most finance people have ever worked on is the diminished value of revenues to remaining schools once the few depart. This could cause a discount rate to work in reverse.

 

[businesslawyer]

For the right school $200 million would be well worth it. An additional piece of the equation however is if the school(s) leaving the ACC will need to also buy-in to the B1G or SEC.

Also, a school (full member) can approach the conference offering $200 million only to have the conference respond $400 million. New ground will be broken when this happens and speculation is all anyone has to base the buyout calculations on. Where this differs from anything most finance people have ever worked on is the diminished value of revenues to remaining schools once the few depart. This could cause a discount rate to work in reverse.

Yes, but remember that however you calculate it, damage calculations can’t go past the end of the GOR Agreement, since schools at that point can leave without being liable for damages.

 

[noeynox]

For the right school $200 million would be well worth it. An additional piece of the equation however is if the school(s) leaving the ACC will need to also buy-in to the B1G or SEC.

Also, a school (full member) can approach the conference offering $200 million only to have the conference respond $400 million. New ground will be broken when this happens and speculation is all anyone has to base the buyout calculations on. Where this differs from anything most finance people have ever worked on is the diminished value of revenues to remaining schools once the few depart. This could cause a discount rate to work in reverse.

This is what I'm getting at. If I was the ACC I fight tooth and nail and to keep original terms of the deal. You signed agreeing to this, that is my starting point. Not 200 million, not 300 million. The agreed upon terms. If not sue us, oh and by the way, let's make it known that we will in turn sue the conference and network that take you in.

Why? because if the ACC thinks their deal is bad now, it's going to be worse if their marquee football programs leave. No one put guns to heads of FSU and Clemson. I mentioned before, if they agree to give Clemson and FSU more revenue by agreeing to give everyone else less, then extend the terms of the GOR to the conference past 2036.

But I'm neither a lawyer or skilled negotiator some I'm probably talking out my rear end on this topic

 

[FfldCntyFan]

Yes, but remember that however you calculate it, damage calculations can’t go past the end of the GOR Agreement, since schools at that point can leave without being liable for damages.

I realize that (and I also realize the last couple of years of the GOR will be worth pennies on the dollar) but that still leaves more than a decade with (I believe) $36 million per school per year as the base point, not even considering a departure fee. Whatever a buyout would be, especially for the initial schools, will be an astronomical number.

 

[huskymedic]

Frank has a decent multi-post thread on the GOR topic:

 

[FfldCntyFan]

This is what I'm getting at. If I was the ACC I fight tooth and nail and to keep original terms of the deal. You signed agreeing to this, that is my starting point. Not 200 million, not 300 million. The agreed upon terms. If not sue us, oh and by the way, let's make it known that we will in turn sue the conference and network that take you in.

Why? because if the ACC thinks their deal is bad now, it's going to be worse if their marquee football programs leave. No one put guns to heads of FSU and Clemson. I mentioned before, if they agree to give Clemson and FSU more revenue by agreeing to give everyone else less, then extend the terms of the GOR to the conference past 2036.

But I'm neither a lawyer or skilled negotiator some I'm probably talking out my rear end on this topic

Yes, if I were BC, Wake, or any other member who faces the reality of being one of the schools that wont get a sniff from the B2G or SEC I don't consider giving back a penny without both extending the term of the GOR and increasing the departure fee. The contract has already been agreed upon and signed by all member parties. Altering the terms just because isn't sufficient reason.

 

[CONN78SEJ]

If we are not talking money or football… just basketball… then I prefer the big east

It’s stupid to even suggest such a thing, that’s like suggesting the The Big Ten might have taken Rutgers only for men’s basketball.

 

[UConnJim]

I've thought that the key to breaking a GOR is what monetary damages does the plaintiff sustain if a contract is breached? If FSU left the ACC and ESPN kept the existing contract payout in place for the life of the contract (big if), what monetary damages did the remaining schools of the ACC sustain? Could be close to zero. And, the existing ACC contract is pretty close to the new Big 12 contract, so ESPN could keep the ACC contact in place if FSU left. What happens to the ACC media contract after the GORs expire is irrelevant.

Another possibility if that enough ACC schools can find soft landings in the Big 10, SEC, and Big 12 that the conference dissolves. It's a better option than unequal revenue sharing and equal or more revenue for almost all of the schools.

 

[FfldCntyFan]

I've thought that the key to breaking a GOR is what monetary damages does the plaintiff sustain if a contract is breached? If FSU left the ACC and ESPN kept the existing contract payout in place for the life of the contract (big if), what monetary damages did the remaining schools of the ACC sustain? Could be close to zero. And, the existing ACC contract is pretty close to the new Big 12 contract, so ESPN could keep the ACC contact in place if FSU left. What happens to the ACC media contract after the GORs expire is irrelevant.

This could get far more complicated than that. FSU has granted their media rights to the ACC. If they were to just get up, join another conference and wait for the courts to determine a dollar amount they owe the ACC, the possibility exists that the new conference cannot broadcast any games FSU plays until the court case is decided.

Another possibility if that enough ACC schools can find soft landings in the Big 10, SEC, and Big 12 that the conference dissolves. It's a better option than unequal revenue sharing and equal or more revenue for almost all of the schools.

How many can find soft landings? If it isn't more than the number of votes required to dissolve the conference, dissolution wouldn't be feasible.

 

[CONN78SEJ]

This could get far more complicated than that. FSU has granted their media rights to the ACC. If they were to just get up, join another conference and wait for the courts to determine a dollar amount they owe the ACC, the possibility exists that the new conference cannot broadcast any games FSU plays until the court case is decided.

How many can find soft landings? If it isn't more than the number of votes required to dissolve the conference, dissolution wouldn't be feasible.

All of them. All the ACC schools have entrenched FBS football programs and that’s not changing. All the original ACC schools have large endowments, stellar academics and research facilities, and they fund all the major D1 athletic programs. If a couple schools leave and a couple new ones replace them, so what. Success in football is fleeting, it doesn’t last, it’s just a series of ebbs and flows, just ask Miami, FSU, Notre Dame, Nebraska, USC, Pitt, Oregon, and a few others.

 

[Chin Diesel]

One thing I find fascinating is where all members of the then Big East were a quarter century ago. At that time who would have believed that in 25 years Rutgers would be in a better situation in terms of athletic department future than any other school in the conference.

Ouch.