Conference Realignment

[L41k18]

I remember games with Auburn, UT, Bama, and UGA for several years after 1963. We also always played Clemson back then. We played Clemson like 16 straight years in Atlanta.

41 straight Clemson-Tech games were in Atlanta. 1902-1973. First time ever @ Clemson was 1974.

 

[RamblinRed]

Texas and Oklahoma timed their exit to have only one year left and paid the exit fee.

TX and OK paid $50M each to leave 1 year early.

The full amount likely would have been a little more, but basically the B12 was willing to take the $100M knowing it already had new teams coming in. Part of the agreement with the new schools that joined the B12 was that the reamining schools would get that $100M and the new schools would not get any of it.

The big differences between TX/OK and FSU are twofold.
First - 1 year vs 12 years.
Second - OK and TX are richer athletic programs than FSU and paying $50M is a smaller percentage of their athletics budget than it would be at FSU.

 

[orientalnc]

I had a conversation today with a lawyer in NC familiar with the ACC-FSU lawsuit. He said the ACC suit was filed under seal to protect the confidential information they say FSU revealed. The ACC is not publicly sharing or denying anything in the ESPN contract or the FSU lawsuit as it relates to the contract terms or the potential option to renew.

He said the amended lawsuit filed by FSU in Leon County reset the clock on the ACC reply to the initial filing. So it could be a month or so before that happens and we know more. The same is true of the amended ACC lawsuit filed in Charlotte. He said both lawsuits have to be judged based on what he called the "legal sufficiency of the complaint" and could be dismissed for failure of the complaint to state a claim on which relief can be granted. He thinks this is where the FSU lawsuit is. Maybe someone else can expand on that.

 

[RonJohn]

....He said both lawsuits have to be judged based on what he called the "legal sufficiency of the complaint" and could be dismissed for failure of the complaint to state a claim on which relief can be granted. He thinks this is where the FSU lawsuit is.....

Once again, not a lawyer. I think the ACC complaint has some things that should definitely hold up to that standard. The ACC alleges that FSU released confidential information and that the ACC suffered damages as a result. I believe courts usually assume the complaint to be true to determine legal sufficiency. A court would have to decide based on arguments whether FSU released confidential information and whether the ACC suffered damages, but assuming those facts to be true, there is a complaint with a legal remedy. I think the biggest issue with FSU's complaint is that they have not left the ACC. They do not owe a withdrawal penalty. They are still part of the group that holds the media rights. They have yet to suffer any damages to which there could be a legal remedy. I am not a lawyer, and I have not studied thousands of cases, but I don't remember any where a court made a ruling about monetary damages before any damages occurred. Can you imagine filing a lawsuit to have a court tell you in advance how much you would have to pay your ex-wife if you burn her house down?

IF the result was that FSU's lawsuit is thrown out and the ACC lawsuit remains in effect, that would put FSU in a very precarious position. Their negotiating position would drop to almost nothing.

 

[ThatGuy]

If the ACC is completely unwilling to settle on anything then the league and ESPN will be in court for several years, with many things made public that they probably would rather not be. Then FSU will leave anyways. The reason the Big 12 gave up $60 million dollars and let Texas and Oklahoma off the hook:

As others have said, the time remaining on the GOR contract is a very big difference.

Combined with that, the other difference I haven't seen mentioned much is the "rock and a hard place" position that FSU's actions have put the ACC in.

I agree with your assertion that ESPN and the league may be in court for several years, with many things potentially coming to light that they don't want. So the ACC has two choices:

1: Let FSU buy their way out for a lower negotiated fee, including both the exit fee and buying back their media rights. This approach saves the ACC and ESPN from thing they don't want public getting out - but also almost certainly opens the door for other teams to follow FSU's playbook and make the move to other conferences. In the things that have happened in conference realignment in recent years, it is almost certain that other teams would leave, and other conferences would embrace the opportunity to go "shopping."

In this case, in the best case the ACC's media deal with ESPN could collapse due to the lack of teams with enough pull to draw eyeballs; in the worst case, that happens, the conference can't find a buyer to offer a sustainable media rights deal, and many teams find themselves in a Pac-2 situation. Either way, the ACC's survival seems quite threatened.

2: Dig in and argue the whole thing, knowing that the alternative is a "run on the conference," so to speak. In this case, the ACC accepts that some dirty laundry may be aired. But with the alternative being almost certain implosion of the conference, it's a no-brainer. You can't protect the conference from dirty laundry if there's no conference to protect.

This is why I don't see the ACC settling for a substantial discount on anything, just to "keep some things quiet." Unless it's information that would threaten the existence of the conference, letting that info get aired out can't hold a candle to the other choice - from which the conference's destruction is almost a foregone conclusion.

That's why the Grant of Rights was created in the first place (at least according to the way I and FSU's former Board of Trustees see it). It seems to be doing its job admirably.

FSU may have some merit to their case. I personally don't think so, as they made an agreement and accepted substantial benefit from that agreement. But whether they do or don't, this is a fight for survival for the ACC. If this was happening in 2032, I think the ACC's approach would be completely different, and more willing to work things out. But not now, with what's on the line.

NB: Not a lawyer. Just a dude trying to keep my own biases in check and look at the parties' tactics, incentives, and motivations objectively.

 

[Vespidae]

In this case, in the best case the ACC's media deal with ESPN could collapse due to the lack of teams with enough pull to draw eyeballs

My understanding of how media right values are determined is based not on current eyeballs, but future ones. The expectation is that by entering a deal, the lower performing teams will revert to the mean, creating a windfall.

So, FSU’s antics are destroying that narrative. Sports shows are already reporting that FSU is damaging the conference. The ACC should sue FSU for any damages, and I’m sure ESPN will be eager to testify.

 

[SOWEGA Jacket]

My understanding of how media right values are determined is based not on current eyeballs, but future ones. The expectation is that by entering a deal, the lower performing teams will revert to the mean, creating a windfall.

So, FSU’s antics are destroying that narrative. Sports shows are already reporting that FSU is damaging the conference. The ACC should sue FSU for any damages, and I’m sure ESPN will be eager to testify.

Yeah, FSU is hurting the ACC by going undefeated and being the only ACC team anyone paid attention too. Maybe FSU should sue the ACC for being such a garbage run conference that the committee voted to leave your undefeated champion out so they can let other 1 loss conference champs in.

 

[awbuzz]

Yeah, FSU is hurting the ACC by going undefeated and being the only ACC team anyone paid attention too. Maybe FSU should sue the ACC for being such a garbage run conference that the committee voted to leave your undefeated champion out so they can let other 1 loss conference champs in.

Did someone run over your pet or something?

JMO, you're coming across as trying to be cantankerous, intended that way or not, that's the way you're coming across. I.e. turning down the abrasiveness from a 40 or 60 grit down to 120 or 200 might prove to be more beneficial.

 

[WreckinGT]

As others have said, the time remaining on the GOR contract is a very big difference.

Combined with that, the other difference I haven't seen mentioned much is the "rock and a hard place" position that FSU's actions have put the ACC in.

I agree with your assertion that ESPN and the league may be in court for several years, with many things potentially coming to light that they don't want. So the ACC has two choices:

1: Let FSU buy their way out for a lower negotiated fee, including both the exit fee and buying back their media rights. This approach saves the ACC and ESPN from thing they don't want public getting out - but also almost certainly opens the door for other teams to follow FSU's playbook and make the move to other conferences. In the things that have happened in conference realignment in recent years, it is almost certain that other teams would leave, and other conferences would embrace the opportunity to go "shopping."

In this case, in the best case the ACC's media deal with ESPN could collapse due to the lack of teams with enough pull to draw eyeballs; in the worst case, that happens, the conference can't find a buyer to offer a sustainable media rights deal, and many teams find themselves in a Pac-2 situation. Either way, the ACC's survival seems quite threatened.

2: Dig in and argue the whole thing, knowing that the alternative is a "run on the conference," so to speak. In this case, the ACC accepts that some dirty laundry may be aired. But with the alternative being almost certain implosion of the conference, it's a no-brainer. You can't protect the conference from dirty laundry if there's no conference to protect.

This is why I don't see the ACC settling for a substantial discount on anything, just to "keep some things quiet." Unless it's information that would threaten the existence of the conference, letting that info get aired out can't hold a candle to the other choice - from which the conference's destruction is almost a foregone conclusion.

That's why the Grant of Rights was created in the first place (at least according to the way I and FSU's former Board of Trustees see it). It seems to be doing its job admirably.

FSU may have some merit to their case. I personally don't think so, as they made an agreement and accepted substantial benefit from that agreement. But whether they do or don't, this is a fight for survival for the ACC. If this was happening in 2032, I think the ACC's approach would be completely different, and more willing to work things out. But not now, with what's on the line.

NB: Not a lawyer. Just a dude trying to keep my own biases in check and look at the parties' tactics, incentives, and motivations objectively.

This is a good post and I don't think we are far off on the current situation. I think we just differ on our opinion of the likely outcome. Another point to consider is alot of this is going to be driven by whatever ESPN thinks. Even the Chapel Hill lawyer from the article earlier, who thinks FSU has no case at all on any points said:

Put simply, while legal factors heavily favor the ACC, the ultimate resolution of this dispute may well be influenced by business considerations, particularly the actions of major broadcasters like ESPN. The unfolding of this saga will be crucial not only for FSU and the ACC but also for the broader landscape of college athletics and media rights.

It's really hard to tell what ESPNs appetite for prolonged lawsuits will be here. They will be actively involved pretty much the whole time. We have no idea what their real long term outlook is for the ACC and how much they want to invest in it. Also, if FSU leaving the ACC causes it to implode then it is going to implode anyways. It's just a matter of time at that point. So the ACC fighting FSU in court for years and years for them to leave anyways mostly seems like a waste of time. It would accomplish legally holding them in the conference for longer with the same outcome and may result in even more lawsuits afterwords. I don't think there will be a quick settlement, but I do think there will be a settlement at some point.

All of this assumes that FSU can't get any relief at all from whatever legal filings they move forward with. While the expert legal team at GTswarm has decided FSU and their legal partners are all incompetent toddlers with no shred of a reasonable case, im not sure that is the complete reality.

 

[stinger78]

Why would the ACC implode if F$U leaves? Honest question.

The worst is it becomes the equivalent of a G5. However, our undefeated champion was just overlooked for the CFP in favor of a 1-loss SECheat team and another 1-loss almost SECheat team. Are we not already there?

It would just be more of the same. At most, there’s room for maybe 2-3 more ACC teams in the P2. They’re not going to 24 teams each to accommodate the ACC.

This is already decided. There is going to be a semi-pro league for colleges that has little to nothing to do with academics. Chances are very high that GA Tech and the ACC will not be part of it. We’re already being dealt out. Open your eyes guys. This is why F$U is doing what they’re doing.

 

[orientalnc]

This is a good post and I don't think we are far off on the current situation. I think we just differ on our opinion of the likely outcome. Another point to consider is alot of this is going to be driven by whatever ESPN thinks. Even the Chapel Hill lawyer from the article earlier, who thinks FSU has no case at all on any points said:



It's really hard to tell what ESPNs appetite for prolonged lawsuits will be here. They will be actively involved pretty much the whole time. We have no idea what their real long term outlook is for the ACC and how much they want to invest in it. Also, if FSU leaving the ACC causes it to implode then it is going to implode anyways. It's just a matter of time at that point. So the ACC fighting FSU in court for years and years for them to leave anyways mostly seems like a waste of time. It would accomplish legally holding them in the conference for longer with the same outcome and may result in even more lawsuits afterwords. I don't think there will be a quick settlement, but I do think there will be a settlement at some point.

All of this assumes that FSU can't get any relief at all from whatever legal filings they move forward with. While the expert legal team at GTswarm has decided FSU and their legal partners are all incompetent toddlers with no shred of a reasonable case, im not sure that is the complete reality.

I am sure your amicus brief is atop the stack in both courts.

 

[CEB]

This is a good post and I don't think we are far off on the current situation. I think we just differ on our opinion of the likely outcome. Another point to consider is alot of this is going to be driven by whatever ESPN thinks. Even the Chapel Hill lawyer from the article earlier, who thinks FSU has no case at all on any points said:



It's really hard to tell what ESPNs appetite for prolonged lawsuits will be here. They will be actively involved pretty much the whole time. We have no idea what their real long term outlook is for the ACC and how much they want to invest in it. Also, if FSU leaving the ACC causes it to implode then it is going to implode anyways. It's just a matter of time at that point. So the ACC fighting FSU in court for years and years for them to leave anyways mostly seems like a waste of time. It would accomplish legally holding them in the conference for longer with the same outcome and may result in even more lawsuits afterwords. I don't think there will be a quick settlement, but I do think there will be a settlement at some point.

All of this assumes that FSU can't get any relief at all from whatever legal filings they move forward with. While the expert legal team at GTswarm has decided FSU and their legal partners are all incompetent toddlers with no shred of a reasonable case, im not sure that is the complete reality.

I don’t know what your definition of “prolonged” is, but the only way I see a prolonged legal battle is if FSU actually leaves the conference and then sues for its media rights. As long as FSU is a member of the ACC, there is not a “legal battle…” just a bunch of posturing while parties wait out contractual agreements.

There will obviously be a settlement. It will come at one of three times:
1. The ESPN/ACC deal termination becomes known AND quantifiable. If there is an option out there that allows ESPN a clean break AND ESPN elects to break it, we could know this as early as next year (according to the allegation that an option decision must be made is 2025). With only two years left on a deal, the relative values of teams can be assessed and potentially bought out without any long term precedent being set with regard to GOR.
2. Again, the termination of the deal is known and quantifiable. If the deal runs through 2036, either because ESPN exercises the option or because the deal runs through 2036 regardless (we have no confirmation on what this option is or how it may or may not change the term), then this type of buyout can happen around 2033 when there are only 2-3 seasons to navigate.
3. The prolonged legal battle in which FSU leaves and then sues for their media rights. If that happens, I don’t see how the ACC can afford NOT to fight it. The ACC has an obligation to ESPN to provide that media. I don’t think the ACC could settle with FSU before they have fulfilled their obligation to ESPN, so FSU would have to win a court case nullifying the GOR. I don’t see how that would make it through all of the hearings and appeals faster than the two previous options. If FSU believes ESPN has an option to refuse and end the deal in 2027, I don't see why FSU would push this button until ESPN’s intention is known.

By the way, the implications of GOR being defeated would further torpedo the value of these media deals with regard to CONFERENCES. Oddly enough, maybe that’s where we’re headed anyway… each school strikes their own media deal and conferences are more about scheduling agreements than revenue sharing.

 

[stinger78]

In one sense, F$U torpedoing the GOR might just do CFB a favor. It would invalidate all GORs and throw the door open to the restructuring that is trying to happen. The new order can then happen and everyone will know where they stand.
The downside of that is there are all sorta of ancillary items being addressed, such as are college athletes employees and can they unionize? It would be helpful if those questions were answered and could be factored in to any change.

 

[orientalnc]

In one sense, F$U torpedoing the GOR might just do CFB a favor. It would invalidate all GORs and throw the door open to the restructuring that is trying to happen. The new order can then happen and everyone will know where they stand.
The downside of that is there are all sorta of ancillary items being addressed, such as are college athletes employees and can they unionize? It would be helpful if those questions were answered and could be factored in to any change.

It's hard to envision a scenario where any court would invalidate the GOR. That would turn contract law in the USA upside down.

 

[roadkill]

Why would the ACC implode if F$U leaves? Honest question.

The worst is it becomes the equivalent of a G5. However, our undefeated champion was just overlooked for the CFP in favor of a 1-loss SECheat team and another 1-loss almost SECheat team. Are we not already there?

It would just be more of the same. At most, there’s room for maybe 2-3 more ACC teams in the P2. They’re not going to 24 teams each to accommodate the ACC.

This is already decided. There is going to be a semi-pro league for colleges that has little to nothing to do with academics. Chances are very high that GA Tech and the ACC will not be part of it. We’re already being dealt out. Open your eyes guys. This is why F$U is doing what they’re doing.

I agree with your take.

Regarding the ACC implosion - one only needs to look at the BIG12 to see what might happen. They just lost not one, but their top 2 premier schools, and didn't get a huge windfall in the process. They went out and backfilled them with some up-and-coming G5 schools. Is the BIG12 a top conference in terms of either team rankings or media value? No, but they are stable for now and still considered one of the P4.
I don't see the ACC falling out of the P4 as it is currently defined even if it loses both FSU and Clemson. Now, if we end up with a Premier League with just the SEC and B1G, we may not have a seat at that table.

 

[WreckinGT]

I agree with your take.

Regarding the ACC implosion - one only needs to look at the BIG12 to see what might happen. They just lost not one, but their top 2 premier schools, and didn't get a huge windfall in the process. They went out and backfilled them with some up-and-coming G5 schools. Is the BIG12 a top conference in terms of either team rankings or media value? No, but they are stable for now and still considered one of the P4.
I don't see the ACC falling out of the P4 as it is currently defined even if it loses both FSU and Clemson. Now, if we end up with a Premier League with just the SEC and B1G, we may not have a seat at that table.

I think just losing FSU and Clemson isn't going to happen. This is a recent statement by the Chair of the Board of Trustees at UNC:

I think we all have an obligation to assess the financial realities and make the best decision based on those realities,” Preyer said. “That is what the Board of Governors outlined [on Wednesday]. And if the current financial model of the Atlantic Coast Conference doesn't improve, then it would cause real concern about how Carolina could continue to maintain its excellence in athletics.

I think if FSU and Clemson leave then UNC and probably UVA are gone as well. What happens after that is interesting. Every team remaining would take a P2 slot, but I think some would start to consider Big 12 slots as well.

 

[roadkill]

I think just losing FSU and Clemson isn't going to happen. This is a recent statement by the Chair of the Board of Trustees at UNC:

I think if FSU and Clemson leave then UNC and probably UVA are gone as well. What happens after that is interesting. Every team remaining would take a P2 slot, but I think some would start to consider Big 12 slots as well.

I can see that happening, and in that scenario, we may end up with the combined SEC/B1G as the "Premier A League", and with the B12 taking what is left from the former P5 and evolving into the "Premier B League".

 

[slugboy]

I am waiting for when Liberty or a G5 school sues under antitrust, for being locked out of the playoffs

 

[stinger78]

I think just losing FSU and Clemson isn't going to happen. This is a recent statement by the Chair of the Board of Trustees at UNC:

I think if FSU and Clemson leave then UNC and probably UVA are gone as well. What happens after that is interesting. Every team remaining would take a P2 slot, but I think some would start to consider Big 12 slots as well.

Where will they go? The SECheat is now at 16 teams. The B1G is now at 18. How big is it feasible for them to go? This is a key question when thinking about who leaves.

Next would be who are they best suited for? F$U and Clem are far more suited to the SECheat than the B1G, but the SECheat doesn’t need them. UVA and UNC would fit much better in the B1G, but do they want them? They are not at all a fit for the SECheat.

 

[Vespidae]

I am waiting for when Liberty or a G5 school sues under antitrust, for being locked out of the playoffs

All those in power have to do is create a criteria that excludes them while giving them an opportunity to achieve them.

“Member candidate teams must have 25,000 living alumni within 5 miles of campus and have a stadium capacity of 35,000 or more.”