Conference Realignment

[yeti92]

I would say that is their *potential* media rights, but not their actual contracted media rights. For example, does anyone want to posit that Vandy’s customer base makes their media rights worth the $60M they get from the SECheat? That’s silliness. Their contracted actual media rights are higher than their potential, which is far lower than what that SECheat contract grants them. A reverse situation.

If this is true, then F$U’s actual media rights would stay what the ACC contract says since they hold the contract, even though their media value would potentially be higher in one of the other two conferences.

Yes, that's why ESPN keeping the ACC and FSU's media rights, even if FSU leaves, makes it a good value vs Vandy which is a bad value. And if the SEC had a GOR and Vandy wanted to leave, they could almost certainly buy their media rights back for less than the yearly payout because it benefits every other school financially if they do leave.

Also technically FSU doesn't have any contracted media rights value on their own, the ACC does as a whole, so you would be arguing over potential value in court. ACC payouts aren't based on how much each team contributes to the overall sum, they are essentially equal with slight variations for specific circumstances.

 

[Augusta_Jacket]

Certainly, but they are not negotiating a potential value if they leave. Their value is set by the current contract.

It could be argued that they broke the contract, and thus they must negotiate from potential value. However, if they pay the exit fee and leave their rights behind, how can it be said that they broke the contract? They have fulfilled the contract.

No it isn't. It's set by what the ACC can get for those rights, which is fair market value. If the ACC chooses to sell FSU their rights back to them, then they have every right to demand whatever fair market value those rights can garner the ACC.

 

[roadkill]

Is this correct? Do we know this, or is it hidden behind the NDA?

The ESPN contract is under NDA, but the GOR (at least the ones in circulation without all signatures) isn't. The GOR states that it is necessary for the ESPN contract, but not the other way around. The GOR does reference the ESPN contract, so perhaps if ESPN walked away in 2026, the GOR could be successfully challenged. With the usual caveat that I'm not a lawyer.

 

[WreckinGT]

The ACC cannot prevent FSU from trying to buy back its media rights, but nobody is saying that, except you as a strawman to argue against. FSU can throw out numbers all day to see if the ACC will bite, what's being argued is that the ACC has no obligation to accept an offer.

You can't argue in a motion to dismiss that the GOR is not a penalty because FSU can attempt to buy back their rights and then when they attempt to buy back their rights you just shut them down completely or attempt to extort them. That's not going to happen. There was no reason for the ACC to even mention this in their motion to dismiss. They put it there for a reason.

 

[WreckinGT]

What point are you actually trying to make?

That FSU pays their exit fees plus buys back their media rights at true market value? That would be a financial loss for them, and there’s no need for the court cases. They just declare their intention to leave and pay what they owe.

That FSU doesn’t have to pay an exit fee? This seems really unlikely

That FSU invalidates the ACC contracts? How? So far, their arguments don’t make sense. Would they have to repay all their disbursements over the last decade?

FSU is in court. They do not want to pay what they would owe in order to leave and get their media rights. However, their legal complaints don’t seem to get them there.

FSU is leaving. As much as everyone here wants to force them to stay until 2036, they almost certainly aren't going to. There will be some negotiation of the exit fees, as well as the media rights. That has always been my stance. If anyone here who is convinced that the ACC will fight tooth and nail in court for 12 years to prevent them from leaving would like to place a large wager that FSU will still be in the ACC in 2035 the I will be happy to take the action.

 

[slugboy]

You can't argue in a motion to dismiss that the GOR is not a penalty because FSU can attempt to buy back their rights and then when they attempt to buy back their rights you just shut them down completely or attempt to extort them. That's not going to happen. There was no reason for the ACC to even mention this in their motion to dismiss. They put it there for a reason.

1. You sell me the mineral rights on land you own for 20 years
2. In return, I promise to make you payments based on what I extract
3. Five years later, you find someone willing to pay more for the rights
4. You want out of the deal. You are entitled to sell the land, but I maintain mineral rights and access rights
5. This is exactly aligned to what the ACC and member universities agreed to

It is not a penalty or extortion for me to hold on to the rights. I own them

The fact that you need them for another business deal is immaterial. I own them.

I can sell them back to you if I want to. I don’t have to. If it’s worth it to me, I’ll do it.

 

[Augusta_Jacket]

You can't argue in a motion to dismiss that the GOR is not a penalty because FSU can attempt to buy back their rights and then when they attempt to buy back their rights you just shut them down completely or attempt to extort them. That's not going to happen. There was no reason for the ACC to even mention this in their motion to dismiss. They put it there for a reason.

Actually, you can. And the ACC did just that.

You use a LOT of hyperbole in your arguments, which is why many here have trouble taking your arguments seriously. Asking for fair market value for a product is not "extortion."

Also, as yet, FSU has not approached the ACC to ask about purchasing their rights back. It would seem that this would be the logical place for FSU to start. Since they haven't, my firm belief is that the main purpose of their lawsuit is to create enough negative press to pressure the ACC into caving in to their demands.

 

[Augusta_Jacket]

Since they haven't, my firm belief is that the main purpose of their lawsuit is to create enough negative press to pressure the ACC into caving in to their demands.

For instance, it would not shock me at all to find out that FSUs ultimate goal is not to leave the ACC, but rather to force the ACC to restructure payouts so that FSU gets more than other teams, excepting possibly Clemson and Miami, instead of the current equal payouts with performance bonuses based on bowl appearances as we stand now.

 

[WreckinGT]

1. You sell me the mineral rights on land you own for 20 years
2. In return, I promise to make you payments based on what I extract
3. Five years later, you find someone willing to pay more for the rights
4. You want out of the deal. You are entitled to sell the land, but I maintain mineral rights and access rights
5. This is exactly aligned to what the ACC and member universities agreed to

It is not a penalty or extortion for me to hold on to the rights. I own them

The fact that you need them for another business deal is immaterial. I own them.

I can sell them back to you if I want to. I don’t have to. If it’s worth it to me, I’ll do it.

I actually agree with this but its not what the ACC argued in their own motion to dismiss. You are actually contradicting their argument.

 

[forensicbuzz]

There have been a lot of people predicting the 2030 time frame. Because the GOR is shorter, and the media contracts for the other conferences begin to expire. In 2030, the Big10 can negotiate full payments for other members. In 2034, the SEC can. I think the Big12 can in 2032, but I might be wrong. If Oregon and Washington are any indications, the media partners are not willing to pay full fare for new members to the Big10 at the moment. If nothing drastic happens with FBS football before then, that is when things will be ripe for more conference reorganization.

This is misleading. Oregon and Washington are getting 100% of the portion of the B1G contract that had the contingency for adding other teams from P5 conferences. Oregon and Washington are not getting any portion of the B1G contract that does not have that contingency. It has nothing to do with the media partners not wanting to give Oregon and Washington a full share, it's that the way the contracts are written, only a portion of the share accounts for adding teams mid-contract. USC and UCLA were part of the original negotiation, so they were a known quantity when the B1G renegotiated their contracts, while Oregon and Washington weren't.

 

[WreckinGT]

Actually, you can. And the ACC did just that.

You use a LOT of hyperbole in your arguments, which is why many here have trouble taking your arguments seriously. Asking for fair market value for a product is not "extortion."

Also, as yet, FSU has not approached the ACC to ask about purchasing their rights back. It would seem that this would be the logical place for FSU to start. Since they haven't, my firm belief is that the main purpose of their lawsuit is to create enough negative press to pressure the ACC into caving in to their demands.

The extortion argument was for the people who think the ACC can make up any amount they feel like to charge FSU to buy back their rights. No they can't just say you owe us a trillion dollars like some have suggested. They intentionally put fair market price in their MTD. The issue then becomes how do you determine a fair market price? Especially when the ACC has no media deal past 2027?

Also, I don't really care how seriously people are taking me. If they agree with the extreme hyperbole that you, RonJohn and others spew in every post more than my hyperbole then they are entitled to do so. This is all just discussion and entertainment anyways.

 

[RonJohn]

Also, as yet, FSU has not approached the ACC to ask about purchasing their rights back. It would seem that this would be the logical place for FSU to start. Since they haven't, my firm belief is that the main purpose of their lawsuit is to create enough negative press to pressure the ACC into caving in to their demands.

Just my impression: I think that FSU believed the lawsuit would frighten the rest of the ACC into caving either to a reduced buyout or increased distributions to FSU. I think the response has surprised and backfired on them. I think it would be difficult for their BOT to back down now. After the hyperbole, what could they say as a reason for just dropping it? With the way FSU has acted I don't see the other ACC members backing down either. My prediction would be that this will go to trial. The ACC didn't back down immediately, and FSU has pushed themselves into a hard spot. The only way out without a trial is for some kind of non-public agreement that provides FSU with some kind of a public "moral" victory that they can sell to their fans.

 

[RonJohn]

This is misleading. Oregon and Washington are getting 100% of the portion of the B1G contract that had the contingency for adding other teams from P5 conferences. Oregon and Washington are not getting any portion of the B1G contract that does not have that contingency. It has nothing to do with the media partners not wanting to give Oregon and Washington a full share, it's that the way the contracts are written, only a portion of the share accounts for adding teams mid-contract. USC and UCLA were part of the original negotiation, so they were a known quantity when the B1G renegotiated their contracts, while Oregon and Washington weren't.

But that is what I was saying. By "full fare" I meant the same as what existing Big10 members make. What you said is the same thing, there is a contingency for adding new members that is lower than what existing members get. IOW, if FSU were to join the Big10, they would not get the same payout as Ohio State.

 

[forensicbuzz]

I think that the ACC having no obligation to sell is true at face value and no one is arguing that they do. However, they might. It’s possible.

The issue is what F$U will do. They can absolutely buy their way out by one of two ways: 1) by paying an amount that the ACC would accept, or 2) foregoing their media rights and raising enough money to cover that for x years.

That’s the main variable here. How long? They know how much under the current contract.

Here’s a possible play, I think. If F$U leaves, there is a strong chance that sEcSPN won’t exercise the option with the ACC at the current price and the GOR will cease or change. Either way, F$U is then free to sign a new media rights contract with a new conference when its renewal comes due. That would likely be 2030 at the earliest.

So then, they may only need to raise ~$40M for 6 years, or $240M to buy themselves out of the conference. If they want to compete with B1G/SECheat “peers,” they would need ~$50M for 6 years, or $300M.

Of course, there’s risk involved. If sEcSPN, knowing that F$U media would stay with the ACC, does check the box, then F$U would have 6 even more expensive years to foot the bill.

How did college football ever get to this point?

The GOR and ESPN contract are not linked. Regardless of WHY they extended the GOR to 2036, there's nothing in the GOR that says if ESPN doesn't extend the contract to 2036 the GOR extension is voided, so the ACC retains FSU's media rights until 2036, regardless.

 

[CEB]

You can't argue in a motion to dismiss that the GOR is not a penalty because FSU can attempt to buy back their rights and then when they attempt to buy back their rights you just shut them down completely or attempt to extort them. That's not going to happen. There was no reason for the ACC to even mention this in their motion to dismiss. They put it there for a reason.

The reason was to refute the notion that there is a “penalty” to get their media rights back. There is no penalty. It’s a transaction. The media rights are an asset. That asset has value. The owner of that asset has the ultimate say in what that value is when it comes to the question of selling it…and until 2036, the ACC is the owner.
There is no extortion. That is a very strange perspective.

 

[Augusta_Jacket]

If they agree with the extreme hyperbole that you...spew in every post...

Please point out the hyperbole in any of my posts so far.

 

[yeti92]

You can't argue in a motion to dismiss that the GOR is not a penalty because FSU can attempt to buy back their rights and then when they attempt to buy back their rights you just shut them down completely or attempt to extort them. That's not going to happen. There was no reason for the ACC to even mention this in their motion to dismiss. They put it there for a reason.

Do you know what a penalty is? The GOR is not a penalty, full stop. FSU freely, knowingly, and voluntarily gave their media rights to the ACC until 2036. The ACC has no obligation to return them prior to that point. Refusing to sell is also not a penalty.

 

[WreckinGT]

Do you know what a penalty is? The GOR is not a penalty, full stop. FSU freely, knowingly, and voluntarily gave their media rights to the ACC until 2036. The ACC has no obligation to return them prior to that point. Refusing to sell is also not a penalty.

And yet the ACC did not make this argument in their motion to dismiss. They did not say, we own these rights as signed over to us by FSU and therefore there is no penalty. They are arguing that there is no penalty because FSU can attempt to but the rights back at a fair market price. In your opinion, why did the ACC go this route? Why didn't the ACC go the route that is obvious to everyone on GTSwarm? Are their lawyers incompetent?

 

[WreckinGT]

Please point out the hyperbole in any of my posts so far.

Ill give you an example. Posting lame memes attacking someone personally instead of making useful arguments to the discussion at hand is a form of hyperbole.

 

[yeti92]

And yet the ACC did not make this argument in their motion to dismiss. They did not say, we own these rights as signed over to us by FSU and therefore there is no penalty. They are arguing that there is no penalty because FSU can attempt to but the rights back at a fair market price. In your opinion, why did the ACC go this route? Why didn't the ACC go the route that is obvious to everyone on GTSwarm? Are their lawyers incompetent?

My guy, are we reading the same thing? That is exactly what is argued.

"Florida State alleges that the Grant of Rights, as extended, is also a ‘punitive penalty’ upon a withdrawing member (referring to the ‘additional, crippling penalties’ in the Grant of Rights). But there is no provision in the Grant of Rights that could possibly serve as a penalty and, indeed, there is no reference to a monetary payment at all if a Conference member elects to withdraw from a Conference. Rather, the Grant of Rights simply provides that the media rights of all members will remain with the Conference through the term of the agreement. Florida State imagines that this means it has forfeited future revenue as a ‘penalty.’