The WVU / Big East settlement agreement pdf

[Carl Spackler]

http://www.usatoday.com/sports/college/2012-02-15-big-east-west-virginia-settlement.pdf


Just in case anyone wants to read it.

 

[Excalibur]

I had hoped that the payment would be in addition to the exit fee. It's $20 Million in total, if the forfeited revenues for 2011-12 are in fact $9 Million, but it's inclusive of the exit fee. So the real price of leaving early is $15 Million.

 

[businesslawyer]

I had hoped that the payment would be in addition to the exit fee. It's $20 Million in total, if the forfeited revenues for 2011-12 are in fact $9 Million, but it's inclusive of the exit fee. So the real price of leaving early is $15 Million.

It may be more than that, in that they dont' share in the $15M coming from TCU, Syracuse and Pitt (which amount will likely go up for Syracuse and Pitt to leave on 6/30/13).

If Boise is coming for next season, I get this. If Boise isn't coming for next season, I don't.

 

[ScottVib]

Interesting to read that WVU must try to arrange for a Big XII team to fill the holes for Pitt and SU, but not the others. I'm assuming that was the kickback to ensure that SU and Pitt don't leave this year.

 

[06029]

Interesting to read that WVU must try to arrange for a Big XII team to fill the holes for Pitt and SU, but not the others. I'm assuming that was the kickback to ensure that SU and Pitt don't leave this year.

That is a Best Efforts clause. They can always say we tried, but hey, it did not work. The Conference Resolution exhibit specifically mentions that the Big 12 has agreed to use best efforts in addition to WVU. There is no replacement team coming for 2012 based on the way all this is worded.

$20mm seems like a bargain/no-brainer for WVU. The max they would have received over the next 27 months would have been around $9mm per year, so they pony up $11mm today, forfeit the rights to $9mm and get into a new deal with first year revenues approaching $15-$18mm. Over 2 years, they come out at least $1mm ahead of staying. This does set a precedent for any team, including Uconn, that wants to leave without waiting the 27 months. Have to wonder what amount Pitt and Cuse pay to get out for 2013? Would probably be less since a full conference will exist at that time even if they leave.

 

[businesslawyer]

That is a Best Efforts clause. They can always say we tried, but hey, it did not work. The Conference Resolution exhibit specifically mentions that the Big 12 has agreed to use best efforts in addition to WVU. There is no replacement team coming for 2012 based on the way all this is worded.

$20mm seems like a bargain/no-brainer for WVU. The max they would have received over the next 27 months would have been around $9mm per year, so they pony up $11mm today, forfeit the rights to $9mm and get into a new deal with first year revenues approaching $15-$18mm. Over 2 years, they come out at least $1mm ahead of staying. This does set a precedent for any team, including Uconn, that wants to leave without waiting the 27 months. Have to wonder what amount Pitt and Cuse pay to get out for 2013? Would probably be less since a full conference will exist at that time even if they leave.

1. Again, it's a bargain for WVU, but the Big East can't get more than there actual damages under law, and if Boise is coming what are actual damages?

2. A settlement among parties does not establish a legal precedent. Judges do not look at it in subsequent litigation. It will set the parameters for bargaining by Pitt and SU with the Big East, but it is in no way precedent. The Big East can refuse to negotiate with Pitt and SU, and they will have no recourse but the same litigation path WVU just walked down.

 

[06029]

1. Again, it's a bargain for WVU, but the Big East can't get more than there actual damages under law, and if Boise is coming what are actual damages?

2. A settlement among parties does not establish a legal precedent. Judges do not look at it in subsequent litigation. It will set the parameters for bargaining by Pitt and SU with the Big East, but it is in no way precedent. The Big East can refuse to negotiate with Pitt and SU, and they will have no recourse but the same litigation path WVU just walked down.

Improper use of the word precedent on my part especially since it is a legal issue we are discussing. It certainly provides a road map to any school that wishes to depart early. A really clear map with everything marked out so clearly that you will not even need to turn on your GPS unit to find your way to the end.

 

[Carl Spackler]

If you dig, you'll find that West Virginia plans to pay for their portion of this thing with approx. $10million in loans from the West Virginia Foundation, Inc. An organization that seems to be similar to our UConn foundation, with regards to fund raising. $5mill of that $10mill loan, will be automatically forgiven, and $5mill to repaid with interest, repayment terms specifically, I can't find.

But unless Luck, was lying, I'd expect that that repayment terms of that loan are supposed to coincide with the broadcasting contract payments that WVU is set to receive in escalating fashion over the next few years.

www.wvuf.org

Ironically, is under construction all of a sudden. So, I have no idea, how big that West Virginia foundation establishment is financially, and what $10million means. It could be a drop in the bucket, or Luck might have just cleaned out the private fund raising accounts for the university. Have to wonder how much that organization does in funding the functioning of the university in general. Don't know. They pulled the website down.

 

[zls44]

Luck might have just cleaned out the private fund raising accounts for the university.

 

[IthacaMatt]

That is a Best Efforts clause. They can always say we tried, but hey, it did not work. The Conference Resolution exhibit specifically mentions that the Big 12 has agreed to use best efforts in addition to WVU. There is no replacement team coming for 2012 based on the way all this is worded.

$20mm seems like a bargain/no-brainer for WVU. The max they would have received over the next 27 months would have been around $9mm per year, so they pony up $11mm today, forfeit the rights to $9mm and get into a new deal with first year revenues approaching $15-$18mm. Over 2 years, they come out at least $1mm ahead of staying. This does set a precedent for any team, including Uconn, that wants to leave without waiting the 27 months. Have to wonder what amount Pitt and Cuse pay to get out for 2013? Would probably be less since a full conference will exist at that time even if they leave.

Actually, it's even cheaper for WVU, in terms of how much they have to immediately pay out of pocket - that's only the original $5M that they signed up for. The $8.5M penalty is the money that the Big 12 is lending WVU, and the rest (up to $9M) is simply retained earnings that won't get paid out. They lost that as soon as they accepted the Big 12 bid, anyway.

It sucks to lose a paycheck, sure. But their immediate OOP is only $5M to get out. That amount does not really crush them. It is a much more manageable fee than is being tossed about in the papers. The rest is retained earnings and debt that can be financed by the bigger TV contract over the course of just a couple years.

Marinatto didn't do such a great job with this, if you ask me. It's less of a financial hit than having to actually PAY $15M or $20M in one fell swoop.

 

[Carl Spackler]

Chuck Neinas arranged for the Big 12 conference to 'donate' $10 million to the West Virginia Fund, Inc. That funded the wire transfer that WVU agreed to send the Big East last week, which has been sent and received. The West Virginia Fund, Inc. arranged for that money to be 'loaned' to WVU, so that they can make the payment. $5 million of that 'loan' has been forgiven. The other $5million will be repaid to the big 12, in what would appear to be a sliding scale yearly on WVU's cut of the broadcasting share of the big 12 contract.

WVU has forfeited all revenues due from the Big East after June 30, 2012.

It's very shady, and it's no surprise that the charitable fund raising organization for WVU has a website that's been pulled, as their probably reviewing all of their own legal documents and organizational structure......but it's a way for WVU to make this move without tapping into university funds and budgets directly, but the budgets are goign to take a big hit in 2012, and beyond until the revenue share with the big 12 becomes full.

Just a dumb, dumb move by WVU all around. They are not going to be a liked in their new conference, unless they build a new airport in Morgantown that's going to be able to handle Texas and Oklahoma, and I guarantee Neinas pushed this thing through because he wanted to maintain his tee times with the television executives.

Good luck Ollie, finding a way to fund that with Texas money.

 

[CTMike]

I fail to see how WVU's actions are dumb. If UConn had the same opportunity to leave the Big East for that cheap I'd be thrilled.

 

[socttrojan]

this Chuck Nienas cat, are we to assume he's something along the lines of David Copperfield?
he arranges WVU a loan for $10m, and immediately forgives half of it?
who grants him the authority to pull that off?
what am i not getting here?
was the big12 THAT desperate for another fb program?
Wvu's got a hot-rod cfb team, no doubt, but i haven't seen $5m wiped off the books that fast since Enron

 

[SAMCRO]

Well as long as WVU tries really really hard to get B12 teams to help BE teams w/ their scheduling jams, I guess all is forgiven. Glad that is resolved.

 

[Carl Spackler]

this Chuck Nienas cat, are we to assume he's something along the lines of David Copperfield?
he arranges WVU a loan for $10m, and immediately forgives half of it?
who grants him the authority to pull that off?
what am i not getting here?
was the big12 THAT desperate for another fb program?
Wvu's got a hot-rod cfb team, no doubt, but i haven't seen $5m wiped off the books that fast since Enron

Neinas is the interim big 12 commissioner, and was brought in for one reason, and one reason only - his ties to college football television broadcasting, and yes - that conference was THAT desperate for another FB program. They were in violation of their TV contracts without another program for 2012, and would potentially lose everything and have to start from scratch with broadcasting (minus Texas). THat conference is less than a year removed from being in complete failure had the Pac 10 been willing to absorb Texas' broadcasting deal with ESPN. There was a time, within the past year, that several big 12 programs were looking at the Big East as a potential home.

He has been very closely involved with college football and television broadcasting big wigs, and power brokers for a long time. I guarantee that he was pulling strings with TV executives all along in this thing, and that's how he managed to convince the conference membership to ante up the dough. THe big 12 broadcasting contracts were in danger of being void, had another team not been on board for 2012, and WVU got the tap on the shoulder.

The College Football Association was headed up by Neinas for it's entire 27 year existence as a power player in the national broadcasting world of college football.

That organization was all about television broadcasting, and this move of inviting WVU into the big 12, and squeezing them in through the court system for 2012 - was 100% entirely about appeasing the television broadcasting arrangements in place for the big 12.

I'm quite sure that the potential negative consequences that this move can have on the university of west virginia long term, were of the least importance in anythign that went down around this between October 2011 and February 2012.

 

[uc1974]

WVU doesn't even out after two years. It is actually closer to five. They do not get a full share of B12 revenue for three years, I believe. There are ancillary costs including having to join a conference (and pay something small, I'm sure) for soccer, a sport not played in the B12. I would show the math but I just did my taxes and my dad's and I have a headache.

 

[Carl Spackler]

WVU doesn't even out after two years. It is actually closer to five. They do not get a full share of B12 revenue for three years, I believe. There are ancillary costs including having to join a conference (and pay something small, I'm sure) for soccer, a sport not played in the B12. I would show the math but I just did my taxes and my dad's and I have a headache.

That's why I put everythign in an envelope and mail it to my accountant, and jsut hope that the checks i need to write aren't that big. Hate headaches.

But I agree with the rest.

My opinion? The temporary stability that West Virginia has brought the big 12 for the time being aroudn television broadcasting, (and there's been no such thing as long term stability in intercollegiate athletics conferences since 199o)....but the temporary stability, is going to put a huge dent in WVU's athletic budget, with increased expenses and decreased revenues for at least the next three years.

In the meantime, once the entire Big 12 has experienced the reality of their new conference member, in spending the money, and taking the travel time, for what it means to get all of your entire athletic department programs in and out of Morgantown via Pittsburgh International Airport, ore spend a week away from classes on a bus for a single swim meet, or volleyball game..... well.....there's a saying about honeymoon's being over.

We are very, very spread out in the big east, but we will be able to schedule such that away events can be doubled up, and we are flying directly into major transportation hubs. The football programs out west, will only need to travel their football teams slightly more than they already do, and don't get affected for all sports. The big east was clear that scheduling and the entire athletic departments of schools would be involved in how we expand, and they were good to their word.

The big 12 leadership was about saving their TV contract, and they were good to their word.

The other 9 big 12 institutions though, all will need to travel to Morgantown, and once they do, they aren't going to agree that this is what they ponied up the money for WVU this spring.

And by then, Neinas will be long out the door.

 

[zls44]

That's why I put everythign in an envelope and mail it to my accountant, and jsut hope that the checks i need to write aren't that big. Hate headaches.

But I agree with the rest.

My opinion? The temporary stability that West Virginia has brought the big 12 for the time being aroudn television broadcasting, (and there's been no such thing as long term stability in intercollegiate athletics conferences since 199o)....but the temporary stability, is going to put a huge dent in WVU's athletic budget, with increased expenses and decreased revenues for at least the next three years.

In the meantime, once the entire Big 12 has experienced the reality of their new conference member, in spending the money, and taking the travel time, for what it means to get all of your entire athletic department programs in and out of Morgantown via Pittsburgh International Airport, ore spend a week away from classes on a bus for a single swim meet, or volleyball game..... well.....there's a saying about honeymoon's being over.

We are very, very spread out in the big east, but we will be able to schedule such that away events can be doubled up, and we are flying directly into major transportation hubs. The football programs out west, will only need to travel their football teams slightly more than they already do, and don't get affected for all sports. The big east was clear that scheduling and the entire athletic departments of schools would be involved in how we expand, and they were good to their word.

The big 12 leadership was about saving their TV contract, and they were good to their word.

The other 9 big 12 institutions though, all will need to travel to Morgantown, and once they do, they aren't going to agree that this is what they ponied up the money for WVU this spring.

And by then, Neinas will be long out the door.

All of these potential regrets will be solved with one look at each institution's TV money.