2023 ACC News & Discussion

[slugboy]

I guess I’m missing something here, how did TX and OK sidestep this unbreakable Big12 GOR?

RamblinRed gives most of the details below.

1. The didn’t sidestep it
2. I believe the Big12 contract was ending in 2025. The B12 just renewed, but Texas and Oklahoma had already announced they wouldn’t be part of the new agreement or the conference
3. Clemson can do the same thing—they can announce that they’re moving to a new conference in 2036. That’s 13 years from now, though
4. So, the blocker is the GOR and the term of the contract

They didn't sidestep it.
They waited for it to expire. Or more accurately, they waited until it had 1 year left to expire and then negotiated a $50M exit each to leave 1 year early.

They did not try to challenge the GOR legally. Originally they planned to simply wait the GOR out (it would expire for them in 2024 since they were not going to sign a new one). Ultimately, they waited until it was almost expired and were able to negotiate the fee they would have to pay for the conference to let them go 1 year early.

…

 

[orientalnc]

After all this discussion, I am happy being where we are. There is a lot of comfort knowing we're in a conference where we might be able to play for the championship again in a few years. In both football and basketball. Unless there is a major upheaval in the sports media business that topples ESPN (or they default on those huge contracts due to streaming, or something we don't yet know of) we are where we're going to be for a long time.

 

[FlatsLander]

From the article:
"While Texas and Oklahoma did cause significant upheaval in leaving the Big 12, it cost the programs a combined $100 million to exit the league in 2024, a year before the Big 12's grant of rights was to expire."

Who does that money go to? The Big 12? if so, what do they do with the money? Especially when they're dissolving next year.

 

[bobongo]

Who does that money go to? The Big 12? if so, what do they do with the money? Especially when they're dissolving next year.

I reckon it goes to the Big 12, to be distributed among its remaining members.

 

[RamblinRed]

Who does that money go to? The Big 12? if so, what do they do with the money? Especially when they're dissolving next year.

The money goes to the B12 who is going to distribute it to the remaining members (those that were in the league prior to TX and OK announcing their departures).

The B12 is not dissolving. They signed new media contracts and the GOR remains in effect.

The key was Texas and OK were waiting until the current media contract expired to leave so that there was no value they were giving that they would have to negotiate over. Just to leave 1 year early cost them $50M due to the GoR. That wasn't an exit fee, it was a negotiated settlement of leaving with 1 yr remaining in the TV contract and being able to leave and retain their media rights so the SEC could broadcast their games and make money.

Now that the B12 has a new media contract it would be extremely expensive for any school in that conference to try to depart (just like it would be in the ACC).

How analysts are arriving at numbers like the $500M number to leave the ACC are pretty simple. If a program was to leave the ACC right now the ACC would retain their media rights for the next 13 years. So over that time period the program (and more importantly, the new conference) would get $0 for their media content. It would all simply go to the ACC. Say the media rights are worth $30M yr per program. Simply multiply that number by 13 and then add the current Exit fee $120M and you get over $500M that the ACC could say a program would owe if it wanted to leave the conference and have control over its media rights and make the conference whole.

Note that both the B1G and SEC have purposely waited until media contracts were expiring in the conferences that they added teams from. That is hardly a coincidence.

 

[ThatGuy]

The money goes to the B12 who is going to distribute it to the remaining members (those that were in the league prior to TX and OK announcing their departures).

The B12 is not dissolving. They signed new media contracts and the GOR remains in effect.

The key was Texas and OK were waiting until the current media contract expired to leave so that there was no value they were giving that they would have to negotiate over. Just to leave 1 year early cost them $50M due to the GoR. That wasn't an exit fee, it was a negotiated settlement of leaving with 1 yr remaining in the TV contract and being able to leave and retain their media rights so the SEC could broadcast their games and make money.

Now that the B12 has a new media contract it would be extremely expensive for any school in that conference to try to depart (just like it would be in the ACC).

How analysts are arriving at numbers like the $500M number to leave the ACC are pretty simple. If a program was to leave the ACC right now the ACC would retain their media rights for the next 13 years. So over that time period the program (and more importantly, the new conference) would get $0 for their media content. It would all simply go to the ACC. Say the media rights are worth $30M yr per program. Simply multiply that number by 13 and then add the current Exit fee $120M and you get over $500M that the ACC could say a program would owe if it wanted to leave the conference and have control over its media rights and make the conference whole.

Note that both the B1G and SEC have purposely waited until media contracts were expiring in the conferences that they added teams from. That is hardly a coincidence.

This (and your previous post) should be a sticky. It provides the best view of the moving parts and motivations that I've seen in 325 posts on this thread. Put simply, schools can leave, and can negotiate to buy their way out of the Grant of Rights - but the further out from contract and GoR expirations they leave, the heftier the cost to them. At this point, the GoR costs are too great to leave early. As we get closer to 2035, the prospect becomes more tenable. Just follow the model of Oklahoma and Texas (who each paid $50M to get out a year early, but are looking at taking in $70M that year from the SEC, so the loss is less-significant.)

Having not done the research, I realize: I keep thinking both our ESPN contract AND the Grant of Rights go through 2035.

Anyone have any idea if that's the case? Or does the ESPN contract come up for renewal sooner than the GoR does?

 

[Jerry the Jacket]

Here is what I think is going to happen. Number one, Disney will unload ESPN. ESPN will be financially insolvent within 12 to 24 months and declare bankruptcy. All of these big money deals with all of the Power 5 conferences will fall under that settlement. Basically, all the conferences will be on their own to renegotiate their Grant of Rights / Media deals. Each conference will form its own individual Media companies with the funding and profits being mutually shared by all conference members, just as they are today in some form or fashion. Steaming will become the standard for broadcast media and fans will pay by the drink and only pony up for the specific games they want to watch. Those with the most eyeballs on them will get additional compensation due to their ability to generate more revenue.

Or something like that. All this hand-wringing over the current set-up will be in vain.

Go Jackets!

 

[g0lftime]

Here is what I think is going to happen. Number one, Disney will unload ESPN. ESPN will be financially insolvent within 12 to 24 months and declare bankruptcy. All of these big money deals with all of the Power 5 conferences will fall under that settlement. Basically, all the conferences will be on their own to renegotiate their Grant of Rights / Media deals. Each conference will form its own individual Media companies with the funding and profits being mutually shared by all conference members, just as they are today in some form or fashion. Steaming will become the standard for broadcast media and fans will pay by the drink and only pony up for the specific games they want to watch. Those with the most eyeballs on them will get additional compensation due to their ability to generate more revenue.

Or something like that. All this hand-wringing over the current set-up will be in vain.

Go Jackets!

The GOR is likely not part of the ESPN contract. Then it would be valid with any media contract and not exclusive to the ESPN deal. I could see ESPN declaring bankruptcy the way they are slinging money around. They are letting a lot of people go which is usually due to economic short falls. What is not clear to me is whether the ACC has an exclusive deal with ESPN.

 

[ThatGuy]

The money goes to the B12 who is going to distribute it to the remaining members (those that were in the league prior to TX and OK announcing their departures).

The B12 is not dissolving. They signed new media contracts and the GOR remains in effect.

The key was Texas and OK were waiting until the current media contract expired to leave so that there was no value they were giving that they would have to negotiate over. Just to leave 1 year early cost them $50M due to the GoR. That wasn't an exit fee, it was a negotiated settlement of leaving with 1 yr remaining in the TV contract and being able to leave and retain their media rights so the SEC could broadcast their games and make money.

Now that the B12 has a new media contract it would be extremely expensive for any school in that conference to try to depart (just like it would be in the ACC).

How analysts are arriving at numbers like the $500M number to leave the ACC are pretty simple. If a program was to leave the ACC right now the ACC would retain their media rights for the next 13 years. So over that time period the program (and more importantly, the new conference) would get $0 for their media content. It would all simply go to the ACC. Say the media rights are worth $30M yr per program. Simply multiply that number by 13 and then add the current Exit fee $120M and you get over $500M that the ACC could say a program would owe if it wanted to leave the conference and have control over its media rights and make the conference whole.

Note that both the B1G and SEC have purposely waited until media contracts were expiring in the conferences that they added teams from. That is hardly a coincidence.

This (and your previous post) should be a sticky. In 325 posts in this thread, both give the clearest overview of how the GoR works and the motivations of all the players in this game. Anyone can leave, and can negotiate their way out of the Grant of Rights - but the further out from the contract expiration, the less fiscally feasible that is. Oklahoma and Texas were able to buy their way out a year early for $50M each - which will be offset for them by the ~$70M they'll get from the SEC that year.

As we approach 2035, there's likely more of a possibility others (or us) in the ACC will consider doing the same - but right now, it just doesn't make financial sense.

One thing I'm uncertain about (just haven't done the research) - I had always assumed our ESPN contract expired in 2035 alongside the GoR.

Anyone know if that's the case? Or does the ESPN contract come up for renewal earlier than that?

 

[cpf2001]

The GOR is likely not part of the ESPN contract. Then it would be valid with any media contract and not exclusive to the ESPN deal. I could see ESPN declaring bankruptcy the way they are slinging money around. They are letting a lot of people go which is usually due to economic short falls. What is not clear to me is whether the ACC has an exclusive deal with ESPN.

The GOR directly references the ESPN deal from reports here and elsewhere, such as https://amp.newsobserver.com/sports/college/acc/article263209048.html

I’m not a lawyer but if a member agreed to “irrevocably and exclusively grants to the conference during the term all rights necessary for the conference to perform the contractual obligations of the conference expressly set forth in the ESPN agreement” and that agreement implodes and doesn’t exist anymore from a bankruptcy restructuring, that seems like a potential huge payday for ACC school lawyers all around and maybe a very costly mistake for the smaller ACC programs. (Or a very smart intentional thing from schools that were ok with the GOR to get the ESPN deal done but didn’t want to be locked into it if something went wrong with that deal.)

 

[slugboy]

The GOR directly references the ESPN deal from reports here and elsewhere, such as https://amp.newsobserver.com/sports/college/acc/article263209048.html

I’m not a lawyer but if a member agreed to “irrevocably and exclusively grants to the conference during the term all rights necessary for the conference to perform the contractual obligations of the conference expressly set forth in the ESPN agreement” and that agreement implodes and doesn’t exist anymore from a bankruptcy restructuring, that seems like a potential huge payday for ACC school lawyers all around and maybe a very costly mistake for the smaller ACC programs. (Or a very smart intentional thing from schools that were ok with the GOR to get the ESPN deal done but didn’t want to be locked into it if something went wrong with that deal.)

If ESPN implodes, that’s the largest buyer in the market going under. Not only do schools lose ESPN as a bidder, but no one has to outbid ESPN.

Yes, you might get out of the contract, but you’re looking at a depressed market and probably MUCH less money than you were getting.

 

[g0lftime]

The GOR directly references the ESPN deal from reports here and elsewhere, such as https://amp.newsobserver.com/sports/college/acc/article263209048.html

I’m not a lawyer but if a member agreed to “irrevocably and exclusively grants to the conference during the term all rights necessary for the conference to perform the contractual obligations of the conference expressly set forth in the ESPN agreement” and that agreement implodes and doesn’t exist anymore from a bankruptcy restructuring, that seems like a potential huge payday for ACC school lawyers all around and maybe a very costly mistake for the smaller ACC programs. (Or a very smart intentional thing from schools that were ok with the GOR to get the ESPN deal done but didn’t want to be locked into it if something went wrong with that deal.)

I would assume ESPN could sell their media rights or if bought by another company, their media rights would go with them.
Haven't we had games televised by Bally Sports? How do those games get paid and to whom? Just wondering now since this whole GOR thing is so important. Are other broadcasters buying the individual game rights from ESPN?

 

[slugboy]

I would assume ESPN could sell their media rights or if bought by another company, their media rights would go with them.
Haven't we had games televised by Bally Sports? How do those games get paid and to whom? Just wondering now since this whole GOR thing is so important. Are other broadcasters buying the individual game rights from ESPN?

The ACC sold broadcast rights for a certain block of games to Jefferson Pilot insurance, who had a side gig in college sports, decades ago. Lincoln Financial bought them, broadcast the games for a while, and eventually sold the rights to the Fox RSNs. Further financial transactions occurred and ended up with Bally being the name on the broadcast.

The ACC was still getting paid on the original deal, negotiated back when games were cheap and you tuned in on some UHF station out of Richmond or something. Transferring the rights didn’t bring any more money.

As for the ESPN contract, someone would need to buy the ESPN assets for the rights to transfer, and that’s not a given. Also, without looking at the contract, it’s difficult to say if the rights are transferable. Probably so, but if ESPN crashes, then the sports broadcast market might also be crashing.

 

[g0lftime]

I've been around long enough to remember ACC basketball games being broadcast by Jefferson Pilot. Food lion was a big sponsor. I think JP is a Winston Salem company. That was the apex of ACC basketball then.

 

[iceeater1969]

Here is what I think is going to happen. Number one, Disney will unload ESPN. ESPN will be financially insolvent within 12 to 24 months and declare bankruptcy. All of these big money deals with all of the Power 5 conferences will fall under that settlement. Basically, all the conferences will be on their own to renegotiate their Grant of Rights / Media deals. Each conference will form its own individual Media companies with the funding and profits being mutually shared by all conference members, just as they are today in some form or fashion. Steaming will become the standard for broadcast media and fans will pay by the drink and only pony up for the specific games they want to watch. Those with the most eyeballs on them will get additional compensation due to their ability to generate more revenue.

Or something like that. All this hand-wringing over the current set-up will be in vain.

Go Jackets!

May not be your exact scenario, but espn will have the gold. When they shake up the apple cart the silly little memo of understanding between acc members will be adjusted as ESPN guys say.

 

[cpf2001]

If ESPN implodes, that’s the largest buyer in the market going under. Not only do schools lose ESPN as a bidder, but no one has to outbid ESPN.

Yes, you might get out of the contract, but you’re looking at a depressed market and probably MUCH less money than you were getting.

The lawyers would have a blast but everyone else is looking at a lot less money in that situation for sure.

So the more I think about it the more I imagine those things were probably intentionally coupled together. If the pie just got a lot smaller and you’re FSU or whoever, you’d want the freedom to change conferences at that point if that’s what it takes to maximize your cut.

It probably wasn’t seen as super likely back several years ago, but at this point I won’t be surprised by anything in the next 13 years.

 

[Oldgoldandwhite]

If it is so ironclad and unshakable, why the performance based mod? Why not tell those 7 teams to shut up and get in line? Dare them to leave.

Seems to me GOR is doing exactly what it was designed to do, so why make a change?

And LOL at FSU amd Clemson thinking the SEC wants them. They have nothing to offer. I giggle sadistically at the thought of Vandy raking it in so.much more than those two posers.

I doubt UF and USCe would vote to take them.

 

[Oldgoldandwhite]

Here is what I think is going to happen. Number one, Disney will unload ESPN. ESPN will be financially insolvent within 12 to 24 months and declare bankruptcy. All of these big money deals with all of the Power 5 conferences will fall under that settlement. Basically, all the conferences will be on their own to renegotiate their Grant of Rights / Media deals. Each conference will form its own individual Media companies with the funding and profits being mutually shared by all conference members, just as they are today in some form or fashion. Steaming will become the standard for broadcast media and fans will pay by the drink and only pony up for the specific games they want to watch. Those with the most eyeballs on them will get additional compensation due to their ability to generate more revenue.

Or something like that. All this hand-wringing over the current set-up will be in vain.

Go Jackets!

I tend to agree. Media and entertainment are hard to predict.

 

[Novajacket]

The last ESPN deal gave them the rights to all ACC games. They pick the ones they want to broadcast first, then of the leftover they sell them to Ballys. If no one picks them up ESPN3.

 

[cpf2001]

How can you watch the Padres? What you need to know about MLB's TV takeover

Diamond Sports Group's missed payment could have wide-ranging effects on televised sports. Here's what it means for fans today.

www.espn.com

MLB asking for $20/month for cord cutters for streaming access to Padres games after Diamond/Bally didn’t pay.

They’ve also directly negotiated with some local cable companies for those who haven’t cut the cord.

Cutting out the middleman and going straight to the cable co’s is clever, though with the number of markets involved for a CFB conference it would be a big effort.

I’m very curious to see if that price for streaming-only sticks.