Breaking USC & UCLAbia Joining BIG 10

[Bootleg11]

It only takes 8 votes to end the ACC

Georgia Tech for that Atlanta market/recruiting would be good.

I feel bad for a program like Pitt, they have a pretty good history and would fit moreso in the footprint of the Big 10 (or what it was) but Penn State probably wouldn't want that.

 

[Kaladin]

Georgia Tech for that Atlanta market/recruiting would be good.

I feel bad for a program like Pitt, they have a pretty good history and would fit moreso in the footprint of the Big 10 (or what it was) but Penn State probably wouldn't want that.

Ya Pitt is probably screwed

Gonna have to join the Big East

 

[Bootleg11]

Ya Pitt is probably screwed

Gonna have to join the Big East

Or join West Virginia in the Big 12. Which makes sense, they are pretty big rivals.

 

[Alum-Ni]

What's next in conference realignment for ACC and Pac-12? Follow the grant of rights

There has already been an extreme amount of analysis by multiple schools' general counsels examining the legal strength of the grant of rights. Here's how it could factor into the next steps in realignment.

www.espn.com

Spoiler: What's next for the ACC and Pac-12? (ESPN+)

What's next in conference realignment for ACC and Pac-12? Follow the grant of rights
by Pete Thamel, ESPN

Only in times of chaos in college sports does the wonky jargon grant of rights intersect with mainstream conversation. Perhaps no factor looms larger for the future of the entire enterprise of college athletics than the consequences that come with signing -- or the potential need to sign -- a grant of rights.

A grant of rights is a legal term that comes up in the college landscape almost exclusively during times of conference realignment. The definition of the term itself is a fitting duality -- both simple and complicated -- considering how differently the grants are being viewed amid the latest starburst of realignment in 2022.

By extending their grant of rights in 2016, ACC schools did what the legal phrase says: They granted the rights to all their home games to the ACC until the league's television contract with ESPN expires in 2036. After granting them, schools are finding complications in the legal quagmire of the exploration of getting them back.

There has already been an extreme amount of analysis by multiple schools' general counsels examining the legal strength of the document, though one source familiar with one of those studies said there "doesn't appear to be much wiggle room" for schools eager to depart.

In the ACC, the grant of rights looms largest because of the 14 seasons that remain on the contract. The per-team estimated payouts project to hundreds of millions less over that span than teams in the Big Ten and SEC. The ACC should be about $40 million per team in upcoming years. The Big Ten and SEC should be north of $70 million in the early years of their upcoming deals, as the Big Ten is difficult to predict until its new deal gets signed in the coming weeks. How big that gap grows -- and there's always variance with league success -- will only amplify the angst in the ACC.

Any conversation about future ACC members, departing ACC members or unhappy ACC members all inks back to the length and strength of that grant of rights.

For the ACC, the grant of rights serve as the ultimate paradox -- the glue holding the ACC together but also a wedge threatening to divide the league. The grant of rights serves to protect or suffocate, depending on whether your chair is at Syracuse or Clemson. It is the golden handcuffs that represent either long-term financial security or financial inequity.

The grant of rights was designed to bond the schools through equal revenue share for two decades and end realignment speculation. But with the top brands Clemson, Florida State, North Carolina, Miami and Virginia all worried about the financial gap for the next 14 years, there are schools at the top feeling trapped. (Or those who've been at the top in the past and expect to return.)

The grant of rights is being hailed by ACC officials behind the scenes as an ironclad bond of commitment. But there's also a bottom-line reality that counters that: It would be naive to think that no school will challenge it within the next 14 years if the financials in the league don't change. While there's no known legal precedent in college sports for going to court to break a grant of rights, the only variable seemingly is time before someone in the ACC begins a risky game of financial roulette that comes after an exit fee that is projected to be nearly $120 million per school.

It's one math problem after another. Can you afford to stay in the ACC and fall behind? Or would the cost be more significant by trying to find your way out?

It's not just the ACC's future that revolves around the grant of rights. The safest predictor of what happens next in realignment is that grant of rights will loom as a large factor in the deal. (Or, perhaps, allowing schools to not sign one could be a negotiating play.)

Here's a peak at what's next in realignment and how grant of rights can factor in.

What happens out West?

In the Pac-12, the expiration of the grant of rights running congruent with the current television deal in two years gave USC and UCLAbia the freedom to jump to the Big Ten.

And that hasn't gone unnoticed by Oregon and Washington, which both strongly desire a new address amid the financial excess of the Big Ten. With the TV deal expiring soon, the Ducks and Huskies are going to have to commit somewhere in the near future. And that's where a grant of rights will loom over the future of television football in the West outside of Los Angeles.

Both schools certainly would be hesitant to sign up for a lengthy grant of rights in the current league or elsewhere, as there's no chance the money would come close to what they hope to get in the Big Ten. For those schools, the grant of rights could be a tether, leverage point or perhaps even a negotiating tactic.

Executives around the realignment campfire are all saying that we're in a period of calm after the jarring move of USC and UCLAbia to the Big Ten. That's correct until it isn't. And the unknown variable is time, which could mean weeks, months or years.

It's important to remember that USC wasn't eager to have Oregon in the league, hence no invitation in Round 1. Considering that USC and UCLAbia are both expected to deliver only slightly more than a full share to the Big Ten, it's reasonable to project that the Pacific Northwest schools would cost the Big Ten money to add. Not a lot of moves in the history of college sports have been done to lose money.

This is where the financial gap to the "Power 2" of the Big Ten and SEC has gotten so big tat even a small chance to join one of those leagues needs to be kept open. So how does that get addressed in negotiations? That's where things will get interesting, as it's hard to imagine the Big Ten wanting Oregon and Washington imminently but seemingly just as difficult to project a pair of 20-team Power 2 leagues without them.

Who pushes the button?

In realignment, the only constant is change, which makes it hard to imagine that both the Big Ten and SEC won't jump from 16 to 20 teams in the next five years. So what's the impetus for the next move?

It's quite plausible that both the SEC and Big Ten are set at 16 teams for now. It's equally plausible that they're only likely to move if they anticipate the other league moving. So they watch -- "Spy vs. Spy" -- with binoculars from Birmingham, Alabama to suburban Chicago. It's a cold war with little trust between either side and two competitive television networks as the primary revenue sources behind the leagues.

The SEC might not be eager to add a school like Clemson, North Carolina or Florida State because the league already has a presence in those states. There's also the legal thicket of the grant of rights. But the SEC also likely wouldn't be eager for one of those schools to go to the Big Ten. Hence, the binoculars are perched.

The most likely course of action for the ACC -- see below -- is selective expansion. If the ACC wanted to add a Western wing and required a grant of rights from Oregon and Washington, would that change the Big Ten's mind? Again, it's hard to imagine those two schools not in someone's long-term plan.

What if the Pac-12 stayed together and signed a 10-year deal with a grant of rights? Would the Big Ten feel good about not adding those properties for a decade? It's clear Oregon and Washington want to get across the moat to a Power 2 league, and the SEC doesn't feel like it would mean more in Eugene or Seattle. So how good would the offer need to be from the Pac-12 or ACC to take Oregon and Washington of the table for an extended period? The Pac-12 would likely have to offer them unequal revenue shares, which has been a proven conference killer in past decades, with the Big 12's bickering as the prime example.

One of the few things uniting the Power 2 leagues right now is that neither wants anything to do with the legal untangling that would come with breaking a grant of rights. The unofficial posture of both leagues, if they ever were to take an ACC school in the near future, would be -- well, you figure all that out. Then come approach us.

What will the ACC do next?

Conference officials are waiting on a bevy of numbers from consultants. There's the scheduling arrangement with the Pac-12, which has virtually no chance to have the financial clout to get traction.

The next logical move would be selective expansion, which combined with some type of creative revenue sharing could help the schools that are most anxious about the revenue gap with the Big Ten and SEC. The timing of how the ACC addresses that and the size of the gap are likely going to determine the league's future. (Is it enough that he potential of joining another league without the rights to home games -- depending on legal gymnastics -- would seem off-putting?)

The Pac-12 schools in prime markets are the obvious ACC target, as it's unlikely any TV entity is going to come in and bid high on the league now that they are vulnerable and lack the Los Angeles market. (Adding San Diego State and Boise State, which both seem like obvious choices, still doesn't move the financial needle.)

Whatever financial estimates the Pac-12 schools get amid their current open negotiating window will inevitably underwhelm. Does that allow the ACC to make a targeted strike to take the best available from the Pac-12 -- Oregon, Washington, Stanford and California -- and then take either two or four others? Those could be either two or all of these -- Arizona State, Colorado, TCU, Cincinnati -- to form a Western wing of the league.

The question would loom large whether this wing would want a 14-year commitment, similar to the current schools.

If the Pac-12 schools are tempted, it would seemingly bring a bigger annual payout to the San Francisco Bay Area and Pacific Northwest schools while trimming the fat that USC an UCLAbia wanted to escape. If those programs could come pro rata with the ACC, perhaps the extra ACC Network money from adding a flurry of big markets could create a pool of revenue that is distributed to the league's top performers. More revenue that's distributed unequally is the key for the ACC making sure the grant of rights doesn't drive the league apart.

Unequal revenue has been an ongoing ACC discussion, and amid these tense times of grant of rights examination, common sense would dictate the opportunity for more revenue for the winning teams.

North Carolina's run to the men's basketball national title game last year will earn the ACC $8 million in NCAA units over the next few years. What if half of that went to the Tar Heels instead of being divided evenly? What about the $6 million per year from Clemson's six straight College Football Playoff appearances? Do the Tigers still get an equal share with Duke?

Very early discussions are underway at the ACC about how that could look.

"I think it has to be part of an earned model, but some of it is going to be based on history and market," one ACC source said. "You have to be pretty creative how you come up with the model."

With the grant of rights weaving through every conversation, creativity and billable hours appear to be necessities in the near term.

 

[Alum-Ni]

Notre Dame targeting $75 million annual media rights payout in quest to remain independent

Power Five shoulder programming around Notre Dame games will be key to making such a deal happen

www.cbssports.com

Notre Dame targeting $75 million annual media rights payout in quest to remain independent
by Dennis Dodd, CBSSports.com
Notre Dame would remain independent if it can earn at least $75 million annually in media rights revenue from current broadcast partner NBC, sources told CBS Sports. The Fighting Irish's deal with the network is set to expire in 2025.

For NBC to feel comfortable in raising Notre Dame's valuation to such a level, it is seeking "shoulder programming" (in this case, games played before and/or after Notre Dame's contests) from a Power Five conference to enhance its college football coverage.

When such a move had been speculated previously, the Big Ten was the conference mentioned most often as a target. However, the Big 12 has emerged as a strong option to fill NBC's shoulder programming needs.

The Big Ten is expected to announce a new $1 billion media rights deal possibly as early as this month with Fox as its primary partner. It is believed to be seeking 2-3 other partners to air its programming with NBC reportedly among the bidders.

Outgoing Big 12 commissioner Bob Bowlsby had not heard anything specific on NBC targeting the Big 12 for additional programming but said such a move "makes sense." The Big 12 may be one of the few leagues with inventory available as its media rights deal also expires in 2025.

Brett Yormark replaces Bowlsby as Big 12 commissioner on Aug. 1. In a press conference at Big 12 Media Days last week, Yormark said the conference is "open for business."

Notre Dame's name has come up again in conference realignment amid USC and UCLAbia deciding to join the Big Ten last month. Because of the value of the Big Ten's next deal, estimated at $80 million to $100 million annually for each member institution, it was thought Notre Dame had a generational decision to make as to whether it should remain independent.

NBC's negotiations are expected to extend across the next 2-3 weeks, according to a source. The network has been the rightsholder for Notre Dame home football games since 1991. The current deal averages $15 million per year, but Notre Dame is earning $22 million annually due to the backloaded nature of the contract.

 

[BorWhiskey]

I understand the concern over a reduced value to programs based on what else is out there other than ND. But what’s the damage for letting some of our top choices go to the SEC? I think it’s the wrong move to let UVa and UNC to the SEC. Both schools are probably in our top five of “if we expand”. Let’s play offense and make that move so that the SEC doesn’t expand by nabbing our preferred schools. They can take VT and NCSU. VT and Tenn would make a good rival.

 

[MtnHusker]

I understand the concern over a reduced value to programs based on what else is out there other than ND. But what’s the damage for letting some of our top choices go to the SEC? I think it’s the wrong move to let UVa and UNC to the SEC. Both schools are probably in our top five of “if we expand”. Let’s play offense and make that move so that the SEC doesn’t expand by nabbing our preferred schools. They can take VT and NCSU. VT and Tenn would make a good rival.

Give me North Carolina, Virginia, Notre Dame & Kansas and I'm happy. Can go get drunk in Lawrence for Husker games plus should help us recruit in the KC area. Notre Dame adds TV Sets money as does Virginia & North Carolina.

 

[cwessel76]

Give me North Carolina, Virginia, Notre Dame & Kansas and I'm happy. Can go get drunk in Lawrence for Husker games plus should help us recruit in the KC area. Notre Dame adds TV Sets money as does Virginia & North Carolina.

As a VA resident I can’t tell you that nobody gives a fat baby’s Johnson about UVA football.

 

[MtnHusker]

As a VA resident I can’t tell you that nobody gives a fat baby’s Johnson about UVA football.

We just want the TV $ets, and expanded recruiting territory. Maybe some of their academics doesn't hurt either. Hate to see them go to the $EC. Two Horse Race between us and the $EC to see who can add the best pieces.

 

[ChocaEgg]

As a VA resident I can’t tell you that nobody gives a fat baby’s Johnson about UVA football.

Tech seemed to have way more football fans but that's probably because they've been consistently decent for a long time. The Hoos have had some good seasons but a lot of really bad ones too.

 

[BorWhiskey]

As a VA resident I can’t tell you that nobody gives a fat baby’s Johnson about UVA football.

As a VA resident (NOVA), there is certainly more VT support here, but it’s picked up steam recently. I also think UVa grads have a greater probability of not staying in the area for their careers than VT grads.

 

[That SOB Van Owen]

As a VA resident I can’t tell you that nobody gives a fat baby’s Johnson about UVA football.

Tech seemed to have way more football fans but that's probably because they've been consistently decent for a long time. The Hoos have had some good seasons but a lot of really bad ones too.

As a VA resident (NOVA), there is certainly more VT support here, but it’s picked up steam recently. I also think UVa grads have a greater probability of not staying in the area for their careers than VT grads.

Whenever anyone talks about UVA football this is always the first thing that comes to mind

 

[Alum-Ni]

Sources: Big 12, Pac-12 won't partner, talks end

Officials from the Big 12 told Pac-12 officials on Monday that they're no longer interested in exploring a partnership, sources said.

www.espn.com

Talks of a partnership between the Pac-12 and Big 12 have officially ended as officials from the Big 12 told Pac-12 officials that they're no longer interested in exploring the partnership.

A Big 12 source said that the deal didn't work for the conference for "a multitude of reasons," which included the fact that any potential deal wouldn't have driven much revenue for the league.

 

[BorWhiskey]

My guess is both sides felt they were the better one and could raid the other so wanted the better deal.

 

[Bootleg11]

My guess is both sides felt they were the better one and could raid the other so wanted the better deal.

Big 12 fans seem pretty confident that they will do the raiding.

I think the Pac 12 has stronger brands. Oregon, Washington and Utah are better than any brand that the Big 12 has. I'm not sayin better football program, but better brand.

The best brands in the Big 12 are now...Baylor, OK State, BYU? and probably...Tech or maybe one of the AAC schools that are coming over? I guess KU because of their basketball status as a blue blood.

I would put the best Big 12 brands on par with Arizona and Arizona St.

You type and read the word "brand" enough it really loses meaning.

 

[Alum-Ni]

Big 12 fans seem pretty confident that they will do the raiding.

I think the Pac 12 has stronger brands. Oregon, Washington and Utah are better than any brand that the Big 12 has. I'm not sayin better football program, but better brand.

The best brands in the Big 12 are now...Baylor, OK State, BYU? and probably...Tech or maybe one of the AAC schools that are coming over? I guess KU because of their basketball status as a blue blood.

I would put the best Big 12 brands on par with Arizona and Arizona St.

You type and read the word "brand" enough it really loses meaning.

The Pac-12 has better brands, but they are also more vulnerable than the Big 12 because of it. Oregon, Washington, the Arizona schools schools, Colorado and Cal/Stanford are more desirable than anyone left in the Big 12.

 

[Alum-Ni]

Clay Travis: ACC Schools All Want Out of the ACC

While most college football media and fans have been chasing Big 12 and Pac-12 expansion and realignment rumors, the truth of the matter is this: the future battles in college foot

www.outkick.com

Spoiler: Clay Travis: The ACC schools all want out of the ACC

The ACC Schools All Want Out of the ACC
by Clay Travis, Outkick.com

While most college football media and fans have been chasing Big 12 and Pac-12 expansion and realignment rumors, the truth of the matter is this: the future battles in college football expansion aren’t going to be fought in the Big 12 or the Pac-12, they’re going to be fought in the ACC. Because pretty much every ACC school wants to leave the ACC for the SEC or the Big Ten and unlike the Big 12 and the Pac 12, many ACC schools have substantial expansion value to both the SEC and the Big Ten. And there are two schools in particular, the University of Virginia and the University of North Carolina, who will help to drive the next generation of college football expansion. I’ll discuss that below in a moment, but first let’s begin here: top ACC schools recognize that the future of college football is the SEC and the Big Ten and they want out of the ACC.

Ever since the Big Ten poached USC and UCLAbia from the Pac-12, the phones have been ringing off the hook at the SEC and Big Ten offices. Yes, many of those schools calling seeking to join the SEC and the Big Ten are in the Pac-12 and the Big 12, but it's not a surprise those schools would be scrambling for new homes. What may come as a surprise to many is how aggressively the ACC schools are all attempting to join up with the SEC and the Big Ten.

Which is why the big story percolating beneath college football's surface is this: how long is the ACC going to still exist as a major conference? And when will the raid on the ACC officially get underway? Because the ACC's demise feels inevitable at this point, it's just a question of when it happens, not if it happens.

In the short term the school with the most power to alter the conference realignment calculus is Notre Dame. If the Irish decide to join the Big Ten then it's likely the Big Ten would expand further. If the Irish decide to stay independent then there may be a realignment pause for several years. How long could that pause last? A couple of years or maybe even a decade, no one knows for sure. The tectonic plates shifting underneath college football conferences can be difficult to predict. But much like we know earthquakes are inevitable, so too is the ACC's demise. We just don't know when it's going to happen.

And when the ACC officially enters the realignment phase something unique will finally happen, the SEC and the Big Ten, who thus far have respected each others' geographic territories, will finally square off, head to head. Yes, the SEC took Missouri, a long-rumored Big Ten target. And yes, the Big Ten took Maryland, but so far that's nibbling at the geographic edges of each conference. The SEC and Big Ten's territorial integrity has remained intact to this point.

But the ACC will change all that because the Big Ten wants to come down the southern coast and gobble up schools in North Carolina and Virginia and the SEC wants to prevent that incursion and preserve its geographical ownership of the South. So what comes next? Welp, there's chum in the water and the SEc and Big Ten sharks are going to eventually start feasting and once that happens the ACC as a major conference will cease to exist.

And here's a tasty morsel to digest. Yes, the ACC is protected by a grant of rights agreement that extends into the 2030s -- a grant of rights agreement theoretically restricts a school from selling television rights to its sporting events to others and thereby undercuts the primary financial rationale for changing conferences, TV money -- but if a majority of the ACC schools vote to end the grant of rights then in theory the ACC's grant of rights disappears. So all those rumored tens of millions of dollars keeping the ACC from splitting up? It's dangling over a precarious foundation, as soon as seven or eight schools have better options the ACC as we know it vanishes.

So what does that mean for the SEC and the Big Ten? Well, let's start with major decisions that will have to be made by the University of North Carolina and the University of Virginia. Where do UNC and UVA see themselves in the years ahead? If the answer is the SEC, I think there's a strong case to be made that the SEC would expand and take UNC and UVA. Maybe also adding North Carolina State and Virginia Tech to the mix. That way a 20-school SEC maintains its territorial integrity and the SEC Network would lock in the valuable states of Virginia and North Carolina. This is something I've been writing about on Outkick since all the way back in 2012. The math hasn't changed that much since then.

But if UNC and UVA picked the Big Ten, then I think the SEC would act quickly to add NC State and Virginia Tech and probably then move down the coast and add Clemson and Florida State, too. The SEC might even be willing to take UNC, NC State, Virginia, Virginia Tech, Clemson, Florida State and Georgia Tech to keep the Big Ten out of its top markets and states. Yes, that's half the ACC in one bite. But at that point the only top college football school remaining in an "SEC state" is Miami and there's a belief that Miami, which lacks a large fan base, is a private school, and ranks behind Florida and Florida State in the state pecking order, isn't a must have in the conference. Georgia Tech, Clemson, Florida State and the schools in North Carolina and Virginia would provide territorial integrity to the SEC going forward, effectively locking down the South for generations to come. (Yes, Louisville is still there too, but the state of Kentucky is basketball-focused and a small population state and the Cardinals aren't worth doubling down in the Bluegrass for the SEC.)

What then would happen to ACC schools like Louisville, Miami, Wake Forest, Duke, Syracuse, Pittsburgh and Boston College? They'd all be desperate to get in the Big Ten. But the wrinkle with the Big Ten is the conference hasn't taken lower level academic schools before. (AAU membership, which is restricted to 63 universities in the country right now, has been incredibly important to the Big Ten. Right now the ACC's UVA, UNC, Georgia Tech, Pitt and Duke are all members). But the majority of the seven remaining schools are private schools without substantial football fan bases. So how does all of this play out? How many of these schools are elite enough academically that the Big Ten would accept them?

My guess in this scenario is that the Big Ten would take Syracuse, Duke, Pittsburgh and either Boston College or Miami to get to 20 schools (less if Notre Dame joined). And the remaining ACC schools would be left floating in the realignment cosmos, eventually latching on with the Big 12. (Which is why I'd keep my powder dry if I was the Big 12.)

Remember that a huge detail here is that the SEC, unlike the Big Ten at least so far, has a provision in its new TV deal with ESPN that guarantees all new "top" expansion candidates will receive the same pro rata payment in the event of expansion as the current schools receive. So the finances for the SEC when it comes to expansion, at least right now, are less complicated than the Big Ten. That’s how Oklahoma and Texas, whenever they join the SEC, will end up making the same payout as the existing 14 schools in the SEC. And it’s why, at least so far, the Big Ten didn’t expand and add Washington and Oregon alongside USC and UCLAbia, because the TV dollars don’t work for those schools (The number one lesson of college football expansion is no one takes less money to expand, you have to at least break even).

So the big question that’s hanging out there, ultimately, is this: Where do UNC and UVA see their long range futures? Do they want to align with the Southern schools or do they want to join the Big Ten? It’s a cultural, academic and business decision for both institutions. Do they want road trips to Texas, Alabama and Tennessee or do they want to be playing yearly games in Michigan, Wisconsin and, potentially, Los Angeles? Remember, the Big Ten took Maryland several years ago with the idea that taking Maryland was going to lead to Virginia and North Carolina too. That didn’t happen.

So while everyone is looking at the Pac-12 and the Big 12, the two biggest state battlegrounds to come aren’t states located in either of those conferences: they’re Virginia and North Carolina. At some point, if they aren’t already, those schools and states will officially be in play for the SEC and the Big Ten. And when that happens, look out – the ACC will cease to exist.

Which is why if I were the commissioners of the Big 12 or the Pac-12, I’d be inclined to keep my powder dry. The conference under the biggest long term threat in college sports isn’t the Big 12 or the Pac-12, it’s the ACC, which is set to become the first true battle for college football supremacy between the SEC and the Big Ten, the two 800 pound gorillas of college football.

 

[Alum-Ni]

Canzano: Pac-12 + Big 12 doesn't fit... onto the ACC

Talks break down.

www.johncanzano.com

Pac-12 + Big 12 Doesn't Fit....onto the ACC
by John Canzano

The Big 12 reportedly informed the Pac-12 on Monday evening that it's not interested in merging.

A few quick thoughts.....

- I'm not shocked. I felt like a Big 12 + Pac-12 merger was wishful thinking. There's strength in numbers, sure. But ultimately this is about fit and I struggled to see how those two conferences would mesh in a way that worked for both entities.

- The Pac-12 (minus USC and UCLAbia) will have 12.5 million television households in its remaining markets. The Big 12 currently has only 10.2 million TV homes, but will expand to about 15 million after the additions of BYU, Central Florida, Cincinnati and Houston. Keep those numbers in mind.

- The ACC has 28.2 million households. It's TV markets are superior to the Big 12 and its not close. Also, the ACC already has a partnership with ESPN, which covets inventory in the Pacific Time Zone.

- I've wondered for a while how the Big 12 might fit in a new deal between ESPN and the Pac-12. Answer: It really doesn't.

- The Big 12 and Pac-12 university presidents and chancellors didn't feel like a seamless fit. Those who lead the Pac-12 campuses fashion themselves academics and lined up with the Big Ten over the years because of that.

- I've been writing and talking about a "loose partnership" between the Pac-12 and the ACC for a couple of weeks. I still believe this is headed in that direction.

- The Big 12's television contract isn't up until 2025. The Pac-12's expires in 2024, but it has opened negotiations early. Those in the industry tell me this difference shouldn't have been a deal breaker but it's being cited as one of the reasons.

Bob Thompson, the former president of Fox Sports Networks, told me on Monday night, "If the Big 12 TV partners agreed to open negotiations early, that could easily happen before 2024. Nothing precludes an early negotiation as long as parties agree."

So it just sounds like a merger wasn't a good fit.

Added Thompson: "So now we see if somebody plays 'Let's poach some teams.'"

- There was early speculation that the Big 12 might chase Arizona, Arizona State, Colorado and Utah. But media reports about that were shot down by my Pac-12 sources. I won't speak for all four of those schools, but the prevailing sentiment from athletic directors within the Pac-12 is that the remaining 10 universities will stick together and ride out the current media rights negotiations together. I'll make some calls and report back with updates.

- Phoenix's TV market has 2.1 million households. I've wondered for a while if Arizona State might try to leverage the Pac-12 for a larger share of the next media rights deal. That said, I have a difficult time actually seeing ASU bolt for the Big 12.

- The Big 12 programs that I think the Pac-12 (and ESPN) would be most interested in are: Kansas, Baylor, TCU and Houston. If the Pac-12 goes hunting, I expect those universities to be the primary targets. This is 100-percent about potential television revenue.

- I included Kansas because I think ESPN would covet men's basketball matchups featuring the ACC's Duke and North Carolina and the Pac-12's Arizona and Oregon. Kansas would be an interesting addition.

- The Pac-12 is in an exclusive negotiating period with ESPN and Fox. That window expires on Aug. 4, but I'm told the parties could come to an agreement before then.

- ESPN is the likely bidder here. Think about what that network needs. It has to think about the restless members in the ACC and how it might get them some additional revenue right now. A partnership with the Pac-12 makes sense to me. Sharing revenue with the Big 12 (Read: more mouths to feed) doesn't.

- Pac-12 Media Day is July 29 in Los Angeles. Commissioner George Kliavkoff needs something to sell to the public during that event. I expect he'll have something of substance. I don't think we're going to have to wait until Aug. 4.

More as this develops......

 

[Irv]

 

[Alum-Ni]

Dissolution is Not a Solution to Break a Grant of Rights Agreement

It has been a whirlwind for the past three weeks since the Big Ten announced that it was expanding with USC and UCLAbia. I have a lot of thoughts on what the Big Ten will (or more likely, won’t)…

frankthetank.org

Dissolution is Not a Solution to Break a Grant of Rights Agreement
Frank the Tank's Slant

It has been a whirlwind for the past three weeks since the Big Ten announced that it was expanding with USC and UCLAbia. I have a lot of thoughts on what the Big Ten will (or more likely, won't) do in terms of further expansion, the fight for the upper hand between the Pac-12 and Big 12, and how conference realignment may impact the playoff.

At the top of my mind, though, is the ACC Grant of Rights agreement (the "GOR") and how that document is holding the league together. As a reminder, the GOR entails each school of a conference granting control of its media rights to that conference for the term o the agreement. The real potential mass hysteria from conference realignment is the prospect of partial ACC member Notre Dame and/or full members such as Florida State, Clemson and North Carolina bolting for the Big Ten and/or SEC.

Several years ago, I examined the Big 12 GOR agreement and concluded the following:

[T]he GOR’s strength isn’t that it’s an ironclad complex agreement that doesn’t include any loopholes. Instead, it’s an arrangement that is a triple-dog-dare to schools that want to attempt to challenge it since there isn’t any reliable precedent about how to calculate damages. This is proverbial Russian roulette in a practical legal context – the damages could be more than you could imagine… or they could be less than what a normal exit fee would have been. That makes it a great moot court exercise for people like me and other writers in the peanut gallery, but a dangerous contract to challenge in real life. Lawsuits that are brought on principles other than money, such as constitutional challenges filed by the liberal ACLU or conservative American Center for Law and Justice, can afford to tackle these types of ambiguous arrangements. However, conference realignment is almost entirely about money, which means that the great risk of trying to challenge the GOR (even if there are viable legal arguments against it in theory) is likely going to be enough to dissuade any school from leaving a conference that has that type of contract in place.

Essentially, the only realistic way out of a GOR is for a departing school to offer a conference a crap ton of money far beyond a standard exit fee and hope that the conference accepts that offer. Note that a conference doesn't even have to accept such offer and can simply continue to own that school's media rights until the end of the GOR term. This means that the notion of "breaking" a GOR is a misnomer because it implies that the departing school has any control over getting out of the agreement (even if it's willing to pay a massive amount of money). Instead, it is the conference that has the power to waive or not waive the GOR obligations in its absolute discretion (whether reasonable or unreasonable).

After the story broke about USC and UCLAbia moving to the Big Ten, Andy Staples of The Athletic interviewed an attorney that obtained and reviewed copies of the Big 12, ACC and Pac-12 GOR agreements and essentially came to the same conclusion I did: the GOR terms are almost shockingly short and simple, which actually makes them tougher to challenge in practicality.

That article did bring up one possible nuclear option to terminate a GOR: dissolve the conference entirely. The basic premise is that if the conference dissolves and ceases to exist, then any GOR inherently can't exist and the rights would revert back to the member schools. Over the years, the dissolution of a conference is an Internet message board favorite theoretical mechanism for a league and/or its schools to get out of all types of unfavorable contracts or other obligations: bad TV contracts, exit fee penalties and, as discussed here, any GOR terms.

Of course, it would stand to reason any conference would want to make it really difficult to be dissolved and, furthermore, would want to prevent any schools with a clear conflict of interest against the league from making any type of dissolution vote. The conference bylaws would dictate what would be necessary to approve and complete a dissolution.

While I haven't been able to obtain a copy of the ACC bylaws, the Big 12 has their bylaws freely available at its public website. The Big 12 is a great instructive example because the league has a GOR agreement and, by the fact that their bylaws are publicly available, the ACC or any other league would be able to copy them or draft similar bylaws. In a review of the bylaws, it's clear that the lawyers drafting them fully anticipated all of those future Internet message board arguments of schools trying to avoid penalties, exit fees and specifically the GOR by dissolving the league and actively wrote their bylaws to prevent that from happening.

For some context, these bylaws were approved by the current 10-team Big 12, so this was after the threat of the formation of the Pac-16 (where Texas, Texas A&M, Texas Tech, Oklahoma, Oklahoma State and Colorado would have joined the then Pac-10) and the actual defections of Nebraska to the Big Ten, Colorado to the Pac-12 and Texas A&M and Missouri to the SEC. Not surprisingly, the conference members likely wanted to ensure that there couldn't be any shenanigans from anyone (cough Texas cough) to leave the others high and dry via a dissolution or other votes where they would have significant conflicts of interest.

Let's dive into what it would take to dissolve the Big 12. Note that each member has a seat on the Big 12 Board of Directors for voting matters. The Director appointed from each school is its Chief Executive Officer (e.g. president, chancellor, etc.). From Section 1.52(b) of the Big 12 bylaws:

The following actions may be taken only if approved by the affirmative vote of a Supermajority of Disinterested Directors (as defined below):
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(2) The dissolution, liquidation, winding-up, merger, sale, or transfer of all or substantially all of the assets of the Conference......

Note that those that can vote on a dissolution aren't all members of the Big 12, but rather a Supermajority of "Disinterested Directors" of the league. What does that mean? Here are the relevant definitions under Section 1.5.2.2:

(a) The term "Disinterested Director(s)" with respect to any issue shall mean each person who: (i) is then duly qualified and servin as a member of the Board of Directors pursuant to Sections 1.5.3 and 1.5.4 below; (ii) is the Director representative of a Member that has not Withdrawn and has not been precluded from voting on the matter in question as a Sanctioned Member; and (iii) is not an Interested Director (as defined below) with respect to such issue.
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(c) The term "Interested Director(s)" with respect to any issue means any Director who has personally, or as to which the Member that such Director represents has institutionally, a direct or indirect material interest in the subject matter of the issue (or series of related issues) being considered by the Board of Directors, that, in the judgment of a majority of the other Directors who are not Interested Directors with respect to such issue or series related issues, could reasonably be expected to impact adversely the objectivity of such Director in voting on such issue or issues. The interests that all Members have in common as the beneficial members of the Conference (even if such interests have disparate effects among Members) will not, in and of itself, cause the Director representing such Member to be an Interested Director with respect to an issue or issues impacting all Members as the beneficial members of the Conference. Any Director who has been determined to be an “Interested Director” in accordance with the foregoing may appeal such determination only in accordance with the following: (i) such Director shall submit a written appeal to the Commissioner and the highest ranking officer of the Board of Directors who has not been determined to be an Interested Director with respect to such issue, if any; (ii) the Commissioner and such highest ranking officer (if any) shall mutually determine and promptly notify such Interested Director with respect to their (or if there is no such officer, the Commissioner’s) determination on the matter, which determination shall set forth whether such Director is deemed to be an “Interested Director” on the matter in question; and (iii) the determination made by the Commissioner and any such highest ranking officer of the Board of Directors shall be final and binding on the Director(s) appealing the initial determination by the other Directors.
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(f) The term "Supermajority of Disinterested Directors" with respect to any issue shall mean seventy-five percent (75%) or more of all persons who are Disinterested Directors with respect to such issue, whether or not each is Present at a meeting considering such issue or signs a written consent with respect to such issue.

Essentially, (a) a Disinterested Director is someone that isn't an Interested Director and (b) an Interested Director is someone that has been determined by the rest of the league to have a conflict of interest in the applicable matter.

Another key term is that a Disinterested Director must be from a school that has not "Withdrawn" from the conference ......and this is where I give kudos to the lawyers that drafted these bylaws.

Here is how a member Withdraws or, more importantly for the purposes of this discussion, is deemed to have Withdrawn from the conference under Section 3.2 of the bylaws (emphasis added in the bolded text):

Withdrawing Member. A Member (a “Withdrawing Member”) may Withdraw, or shall be deemed to have Withdrawn, as a Member of the Conference: (i) if it gives notice of the intent to Withdraw to the Conference; or (ii) if a Supermajority of Disinterested Directors by affirmative vote determines that such Member: (A) makes statements or takes actions that are determined by a Supermajority of Disinterested Directors to evidence the intent of such Member to withdraw from the Conference either currently or in the future; (B) breaches or evidences its intent to breach or not honor and fully comply with its obligations to the Conference under these Bylaws or the Grant of Rights Agreement for the entirety of the respective terms thereof; (C) if a third party offers to, or attempts to induce a Member to, leave the Conference and/or breach or not to fully perform its future obligations under the Grant of Rights Agreement and the Member does not both (1) inform the Conference of such action as promptly as possible (but in any event not later than twelve (12) hours after such action) and (2) immediately and unconditionally reject that offer in a form and manner reasonably acceptable to the Commissioner; or (D) if a Member otherwise takes or fails to take actions that are determined by a Supermajority of Disinterested Directors to be contrary to the best interests of the Conference taken as a whole.

Subsection (i) is the clear situation where a school gives notice to the conference that it wants to Withdraw. That's easy.

It's subsection (ii) that really serves to protect schools from any clandestine attempts by other members to get around the GOR or take other drastic measures, such as dissolution. That clause effectively gives Disinterested Directors the ability to deem a school to have Withdrawn from the league (and thereby losing their voting rights) if (a) there are statements or actions that make it appear that the school is attempting to leave the league, (b) a school breaches or intends to breach the bylaws or specifically the GOR or (c) a school fails to provide the conference with notice within 12 hours of a third-party offer or inducement for that school to leave the league or breach its GOR obligations.

Thus, it doesn't matter if a school that is trying to leave the conference provides notice of withdrawal or not. As soon as the other member suspect that a school is taking actions to get out of the GOR specifically (much less leave the league entirely), those other members can deem such school to have Withdrawn from the league and lose its voting rights in the process.

Now, in theory, some schools could conceivably get together a call for a dissolution vote before the other members can deem them to be Withdrawn. However, in practicality, if a school suddenly says, "We're calling a vote for the dissolution of the conference today" out of nowhere, every other member is going to instantly know that the only reason that's happening is that school wants to leave the conference and/or break the GOR. Those other members would then invoke the clause that allows them to deem that school to have Withdrawn from the league.

Plus, even if several schools are able to get a dissolution vote passed initially, the left behind members would instantly file a lawsuit and it would invariably come out in discovery that the departing schools were acting in contravention of the bylaws prior to that vote. That would mean that the left behind members would have a strong claim that the departing schools should have either been deemed to have Withdrawn from the conference or defined as Interested Parties that should never have been allowed to vote for dissolution. In turn, that dissolution vote would be deemed invalid and the left behind schools could continue the operations of the conference and enforce any obligations, including but not limited to GOR terms and exit penalties.

To be sure, I don’t know whether the ACC has similar language in its own bylaws. If someone out there has a copy, I would love to review it. However, if the ACC bylaws have terms that are anywhere close to the Big 12 bylaws, even attempting to dissolve the conference entirely wouldn’t get rid of the GOR because the dissolution of the league for the purpose of getting rid of the GOR would be prevented in the first place.

This goes back to a basic statement to anyone that believes that a school can "break the GOR" to leave for another league. There is NO magic legal silver bullet to break the GOR. The fact that Texas and Oklahoma still haven't figured out how to extricate themselves from the Big 12 GOR just two years early (much less 14 years early in the case of any ACC school wanting to leave that league since that GOR runs until 2036) shows in real life how difficult it is to end any GOR obligations prior to their contractual termination date.

People need to stop looking at the GOR as a legal issue and start examining it as a financial issue. If a school wants to get out of its GOR obligations, then it's going to be a purely financial decision of whether paying out a massive amount of damages to its current conference is worth it in relation to any increased rights revenue from a new conference. It could very well be the case that whatever GOR damages that a school leaving the ACC would need to pay would be more than compensated by the higher levels of rights fees in the Big Ten or SEC. However, no one should pretend that a school leaving a conference is going to "break the GOR" and get out with minimal or no damages.