Conference Realignment

[Augusta_Jacket]

IMO, FSU is suing the ACC because they painted themselves into a corner. They were expecting the ACC to cave and offer them somewhere in the neighborhood of a $600-750 million "exit fee" that would allow them to leave with their TV rights. Once the ACC collectively decided to tell FSU to pound sand and countersued, it put FSU in a very awkward and precarious situation. From everything I read, there is no legal avenue in which FSU wins. From a PR standpoint, FSU is torching the ACC hoping that it will wear down the will of the ACC to continue to hold the line. I think FSU miscalculated and it's going to blow up in their face.

 

[WreckinGT]

Dylan signed his rights away, period. If Sony decided not to allow the music to ever be used again, he has no recourse.

What fiduciary responsibility are you referring to? FSU knew the details of the contract in 2013, and signed the GOR. FSU knew the details of the ESPN contract in 2016. They knew what the money was. They knew what the length of the contract was. They thought it was in their best interest and signed the GOR with full knowledge. The only thing that has changed is the market conditions. The ACC has not failed to do anything that they should have after the contracts were signed. FSU knew what the ESPN contract said back in 2016 when they signed the GOR, so how can they now claim that the ACC failed their fiduciary responsibility to maximize the earnings in 2016?

Lets say ESPN walks away from the ACC media deal in 2027. The ACC decides not to have a deal at all. Everyone gets nothing. Do you think their is no legal recourse from members of the ACC? They just have to accept that?

 

[Augusta_Jacket]

Lets say ESPN walks away from the ACC media deal in 2027.

Extremely unlikely. The deal is financially favorable to ESPN.

The ACC decides not to have a deal at all. Everyone gets nothing.

Why would the ACC decide not to have a deal at all? That would be lunacy. There's honest speculation and then there is wondering if the sun might turn plaid tomorrow.

Do you think their is no legal recourse from members of the ACC?

Legally, no. The ACC owns their rights.

They just have to accept that?

No. They can vote to absolve the GOR. That option exists now, but we'd be idiots to use it.

 

[orientalnc]

Lets say ESPN walks away from the ACC media deal in 2027. The ACC decides not to have a deal at all. Everyone gets nothing. Do you think their is no legal recourse from members of the ACC? They just have to accept that?

If the ACC cannot get a media deal the conference may fall apart. I say "may fall apart" because we do not know what the media world might look like in a few years. It's changing fast and the die is not yet cast.

 

[CEB]

Nobody is saying there is an exit fee with your media rights. But unless you believe that the ACC will refuse to sell back media rights then there is going to be some kind of settlement or court ruling on the actual cost of those rights. If the ACC did refuse to sell the media rights back to FSU, that is just going to open up another ugly legal battle. FSU obviously can't go anywhere else without media rights so that effectively makes it impossible for them or any other team in the conference to leave for any reason before 2036. It’s locking teams into their conference against their will. I'm not sure they want the legal challenge that is going to happen if they attempted to go that route. Even the Big 12 didn't attempt this with Texas and Oklahoma. It’s an obvious losing battle. If the lawyer in that article is suggesting that FSU should file a complaint completely ignoring this reality, then im not sure I can agree with him. Then again he was posting articles bashing FSU and Clemson on Linkedin 6 months ago so who knows what he is really thinking.

The bolded make me think you’re starting with a false premise. You’re accepting the FSU narrative, and it’s flimsy, at best. You’re starting with the notion that FSU is being held captive, against their will, and incurring damages daily. None of that is true. FSU WILLINGLY signed an agreement, and the ACC has every right to enforce that contract / agreement. FWIW, the Big12 did EXACTLY this with Tx and Ok. With one year left on the GOR, Tx and OK paid $50m each to get out of their contractual obligation. If that is our precedent, FSU can likely leave today for $700M ($50m x 12 years plus the exit fee). FSU doesn’t like that (obviously) and they are throwing a tantrum to try to reduce that number. Regardless, two things are true:
1. the contract is legal and enforceable,
2. There is always a number that can have parties mutually agree to dissolve a contract. FSU’s problem right now is that it’s a REALLY BIG number.

FSU is not really incurring damages, either. If they could produce an actual invitation from the BIG or SEC that supports the notion that they can start earning more money in those leagues tomorrow, they may have a flimsy assertion that they are being damaged. It doesn’t change the fact that they are an informed and able party to a contract they willingly signed and they need to put on some big boy pants and deal with it.

 

[RonJohn]

Lets say ESPN walks away from the ACC media deal in 2027. The ACC decides not to have a deal at all. Everyone gets nothing. Do you think their is no legal recourse from members of the ACC? They just have to accept that?

IF that is even possible, and IF that actually happens, at that point there will be an actual legal argument to make. However, there is also a pretty strong legal argument to counter that. It all depends on how the court interprets "all rights (the "Rights") necessary for the Conference to perform the contractual obligations of the Conference expressly set forth in the ESPN Agreement". Does that mean that the ESPN contract is required to enforce the GOR, or is that only referring to the obligations listed in a potential contract. I am not a lawyer and don't know what laws and court precedents would be used to determine that.

Go back once again to the statement from an FSU BOT member in 2013 -- “I was in concert with President Barron that this was the best thing that could happen... It ensures that we don’t lose any members. Nobody can afford to leave now.”. FSU knew how restrictive the GOR contract was, and what it meant for the future of FSU sports. They signed it with full knowledge of the impact. Every ACC member did. There is a reason that Texas, who has much more money than FSU did not fight the Big12 GOR. They were waiting for the end of the GOR, and then reached a settlement for the last year of it.

 

[WreckinGT]

That may true, but in this case Sony is till selling Dylan's CDs at the same price as in the past. What's happened is Dylan thinks his CDs are worth as much as Taylor Swift CDs that are selling for $10 more. So he wants all his media rights back and does not want to pay Sony anything.

He sold a catalog of already created music for over $300 million dollars. What Sony sells it for later doesn't matter at all to him. In the case of FSU, they put a certain amount of trust in the ACC to sell their product in the future. Their was no guaranteed money up front. They had to trust the ACC to operate in a competent manner regarding their rights to actually bring in reasonable revenue. If they don't, it can ruin their entire athletic department. Those are two different scenarios.

 

[RonJohn]

He sold a catalog of already created music for over $300 million dollars. What Sony sells it for later doesn't matter at all to him. In the case of FSU, they put a certain amount of trust in the ACC to sell their product in the future. Their was no guaranteed money up front. They had to trust the ACC to operate in a competent manner regarding their rights to actually bring in reasonable revenue. If they don't, it can ruin their entire athletic department. Those are two different scenarios.

FSU knew the details of the ESPN contract BEFORE they signed the GOR. They didn't put blind trust in the ACC to negotiate an unknown contract.

 

[Augusta_Jacket]

FSU’s problem right now is that it’s a REALLY BIG number.

That brings up another point. It's possible FSU is waging this PR battle in the courts not really hoping for a legal miracle they know is not like to come, but rather to fire up the donor base and get them pouring their money into the FSU coffers. Nothing fires up a base like doom and gloom.

 

[stech81]

Lets say ESPN walks away from the ACC media deal in 2027. The ACC decides not to have a deal at all. Everyone gets nothing. Do you think their is no legal recourse from members of the ACC? They just have to accept that?

I tried to stay out of this, but I thought no one has seen the contract with ESPN. Lot of people keep saying that in 2027 ESPN could walk away. Now I know the little girl (Swofford) was not the best, but could it be possible the way the contract reads is in 2027 that ESPN still has to honor the contract till 2036 at the same price or increase the payout after 2027 as long as all the teams signed the GOR.

 

[CEB]

Lets say ESPN walks away from the ACC media deal in 2027. The ACC decides not to have a deal at all. Everyone gets nothing. Do you think their is no legal recourse from members of the ACC? They just have to accept that?

This is an interesting wrinkle in all of this.
Put aside whether or not it’s likely, if ESPN does not exercise the option, I think there IS some standing to argue away the GOR.
The GOR does indicate that it’s for the purpose of fulfilling the ESPN deal. At the time it was drafted, that may have simply been a statement for clarity, but if ESPN declines to renew through 2036, I could see that language being used to argue that the GOR has served its purpose. It may have been the ACC’s intent to have a hard and fast 2036 date but under the circumstances, that would open a window of opportunity.

 

[WreckinGT]

The bolded make me think you’re starting with a false premise. You’re accepting the FSU narrative, and it’s flimsy, at best. You’re starting with the notion that FSU is being held captive, against their will, and incurring damages daily. None of that is true. FSU WILLINGLY signed an agreement, and the ACC has every right to enforce that contract / agreement. FWIW, the Big12 did EXACTLY this with Tx and Ok. With one year left on the GOR, Tx and OK paid $50m each to get out of their contractual obligation. If that is our precedent, FSU can likely leave today for $700M ($50m x 12 years plus the exit fee). FSU doesn’t like that (obviously) and they are throwing a tantrum to try to reduce that number. Regardless, two things are true:
1. the contract is legal and enforceable,
2. There is always a number that can have parties mutually agree to dissolve a contract. FSU’s problem right now is that it’s a REALLY BIG number.

FSU is not really incurring damages, either. If they could produce an actual invitation from the BIG or SEC that supports the notion that they can start earning more money in those leagues tomorrow, they may have a flimsy assertion that they are being damaged. It doesn’t change the fact that they are an informed and able party to a contract they willingly signed and they need to put on some big boy pants and deal with it.

We are saying the same thing. I was saying if the ACC attempted to block FSU from leaving by not accepting anything for its media rights then they would essentially be holding FSU in the conference against their will. I don't think the ACC will do this. Therefore, whatever magic number represents those media rights is going to come into play and there is going to be settlement or battle over it.

 

[orientalnc]

He sold a catalog of already created music for over $300 million dollars. What Sony sells it for later doesn't matter at all to him. In the case of FSU, they put a certain amount of trust in the ACC to sell their product in the future. Their was no guaranteed money up front. They had to trust the ACC to operate in a competent manner regarding their rights to actually bring in reasonable revenue. If they don't, it can ruin their entire athletic department. Those are two different scenarios.

Not so. Dylan is still creating music and the price of CDs he sold to Sony will impact the price of his future CDs. FSU sold their rights to the ACC in exchange for the ACC bundling all the ACC schools together for what was then the best media deal in the history of college football. The market has definitely changed and that is what FSU is pissed off about. The problem they have is they cannot sue the market.

 

[orientalnc]

We are saying the same thing. I was saying if the ACC attempted to block FSU from leaving by not accepting anything for its media rights then they would essentially be holding FSU in the conference against their will. I don't think the ACC will do this. Therefore, whatever magic number represents those media rights is going to come into play and there is going to be settlement or battle over it.

You are locked in on a false narrative. The ACC does not have sell something they own simply because there is a willing buyer. Nor do they have to name a price for which they might sell it. The whole notion is ridiculous.

 

[WreckinGT]

You are locked in on a false narrative. The ACC does not have sell something they own simply because there is a willing buyer. Nor do they have name a price for which they might sell it. The whole notion is ridiculous.

FSU cannot go to another conference without their media rights. Even the Sun Belt wouldn't accept them. The ACC either has to allow them to reclaim their rights in some way or block them from leaving the conference. You would say this isn't true?

 

[WreckinGT]

Not so. Dylan is still creating music and the price of CDs he sold to Sony will impact the price of his future CDs. FSU sold their rights to the ACC in exchange for the ACC bundling all the ACC schools together for what was then the best media deal in the history of college football. The market has definitely changed and that is what FSU is pissed off about. The problem they have is they cannot sue the market.

How much guaranteed money will the ACC make in 2028? When the original GOR was signed what was the guaranteed amount of money the ACC network would make?

 

[orientalnc]

You are locked in on a false narrative. The ACC does not have sell something they own simply because there is a willing buyer. Nor do they have to name a price for which they might sell it. The whole notion is ridiculous.

There is also danger in naming a price. Let's say the ACC tells FSU it would sell back the Noles' rights for $10 billion. Whether their intention or not, they have agreed to sell and the only unresolved detail is the price, which is being negotiated in good faith by FSU with both sides trying to arrive at a fair price. The ACC does not want to go there with respect to the GOR.

 

[TampaBuzz]

What a great use of my tax dollars. Floriduh!!

 

[orientalnc]

FSU cannot go to another conference without their media rights. Even the Sun Belt wouldn't accept them. The ACC either has to allow them to reclaim their rights in some way or block them from leaving the conference. You would say this isn't true?

I would say that is a condition of FSU signing away their media rights.

 

[RonJohn]

FSU cannot go to another conference without their media rights. Even the Sun Belt wouldn't accept them. The ACC either has to allow them to reclaim their rights in some way or block them from leaving the conference. You would say this isn't true?

That is not true.

FSU can leave without their media rights if the choose to. The just have to pay the $130 million exit fee and they are no longer a member of the ACC. Whether FSU would want to do that or not is a different question.

Also, you keep ignoring the fact that FSU absolutely knew that the GOR would effectively lock them into the ACC back WHEN THEY SIGNED the document. You can't use the restrictiveness of a contract to argue it isn't legally valid IF you sign it with full knowledge of the consequences. FSU specifically said "Nobody can afford to leave now", BEFORE they signed the contract.

Also, consider that FSU did not announce they are leaving the ACC and then file their lawsuit. They are trying to get the court to tell them BEFORE they have any risk. Courts are usually reluctant to do so. IF FSU was as confident in their legal arguments as you seem to be, they would have announced in August and would be in court to get the court to reduce the financial impact that their actions had already caused.