Conference Realignment

[Richard7125]

What I have heard, but not confirmed, is that the SEC went to ESPN after the totals for the current contract were negotiated and asked for a bump if the conference went to 9 conference games. That would mean less Auburn vs NM State and more Auburn vs South Carolina games. ESPN's response was that they would be happy with more SEC vs SEC games, but that they were not going to pay more for it.

I was simply trying to say that the SEC will most likely make the decision to play 9 conference games based on money. If ESPN will not pay extra, then the SEC will stick with 8 conference games. That is just my opinion.

You’re 100% correct ESPN said they won’t pay them more going to a 9 game schedule so the SEC stayed at 8 games. I think the SEC was using that as a negotiating tactic specifically with ESPN and ESPN said, "No, we’re good."

Since ESPN is going to pay the same whether it’s an 8 game schedule or a 9 game schedule, you can remove ESPN from the equation. Would it be more beneficial for the SEC to stay at 8 games or go to 9 games? You can make arguments for both, but I think going to a 9 game schedule is more beneficial for the SEC (ie 60-40) so they will go to a 9 game schedule. Just my opinion

 

[Dman374]

You’re 100% correct ESPN said they won’t pay them more going to a 9 game schedule so the SEC stayed at 8 games. I think the SEC was using that as a negotiating tactic specifically with ESPN and ESPN said, "No, we’re good."

Since ESPN is going to pay the same whether it’s an 8 game schedule or a 9 game schedule, you can remove ESPN from the equation. Would it be more beneficial for the SEC to stay at 8 games or go to 9 games? You can make arguments for both, but I think going to a 9 game schedule is more beneficial for the SEC (ie 60-40) so they will go to a 9 game schedule. Just my opinion

I have no idea if this would even be possible, but could ESPN sub out some games similar to what Fox and the BIG10 did? I could be wrong, but my understanding was Fox has the contract with the BIG10, and their revised media deal is essentially Fox subleasing some of those games to CBS/NBC. I haven't gone though this 355 page forum, but I know this was discussed at some point in this behemoth thread.

 

[Techster]

 

[stinger78]

No GA Tech.

 

[Augusta_Jacket]

Our endowment is right at $3 billion. Not quite high enough to make this list.

 

[stinger78]

We’re behind Richmond, Iowa, and Georgetown. We’re also WAY behind Emory. This is good to know and quite motivating.

 

[orientalnc]

These are mostly private universities.

 

[slugboy]

The ACC wants FSU’s Florida case dismissed because FSU isn’t actually suing for anything tangible—they haven’t filed to leave.

ACC files motion to dismiss or, alternatively to stay, in Leon County court on Friday

ACC files motion to dismiss or, alternatively to stay, in Leon County court on Friday

247sports.com

 

[RonJohn]

The ACC wants FSU’s Florida case dismissed because FSU isn’t actually suing for anything tangible—they haven’t filed to leave.

ACC files motion to dismiss or, alternatively to stay, in Leon County court on Friday

ACC files motion to dismiss or, alternatively to stay, in Leon County court on Friday

247sports.com

Which is something I said early on. FSU would need to actually suffer damages in order to have a court listen to it's claims of damage. FSU's lawsuit doesn't appear to have much merit, other than forum discussion arguments, because it isn't actionable as of yet. If they withdraw and are asked to pay withdrawal fees, and they are denied the return of their media rights, then they could file a lawsuit to dismiss the withdrawal fees and regain their media rights. I doubt they would win, but at least then they could claim damages so they would then have standing to file a case. Once again, I am not a lawyer, just expressing my understanding of lawsuits.

 

[WreckinGT]

The ACC wants FSU’s Florida case dismissed because FSU isn’t actually suing for anything tangible—they haven’t filed to leave.

ACC files motion to dismiss or, alternatively to stay, in Leon County court on Friday

ACC files motion to dismiss or, alternatively to stay, in Leon County court on Friday

247sports.com

The ACC filed a complaint asking for declaratory judgement saying the grant of rights is enforceable, and that FSU can't challenge it. Only they filed it before FSU filed their complaint, so how could their complaint possibly be in response to anything tangible? From what I have read, neither will be dismissed, both had to reply with motions to dismiss, and this will just be a battle for venue.

I do like the little tidbits we get in these filings though. The ACC acknowledges the 9 year option that was unilaterally extended by the commissioner. They argue that according to the bylaws it was permissible for the Commissioner to negotiate this with ESPN because it did not meet the requirement of a material media rights agreement which would require a vote by the membership. That is certainly questionable.

 

[orientalnc]

The ACC filed a complaint asking for declaratory judgement saying the grant of rights is enforceable, and that FSU can't challenge it. Only they filed it before FSU filed their complaint, so how could their complaint possibly be in response to anything tangible? From what I have read, neither will be dismissed, both had to reply with motions to dismiss, and this will just be a battle for venue.

I do like the little tidbits we get in these filings though. The ACC acknowledges the 9 year option that was unilaterally extended by the commissioner. They argue that according to the bylaws it was permissible for the Commissioner to negotiate this with ESPN because it did not meet the requirement of a material media rights agreement which would require a vote by the membership. That is certainly questionable.

But, how does this impact the GOR? That is the hard question for FSU.

 

[WreckinGT]

But, how does this impact the GOR? That is the hard question for FSU.

It goes to the fiduciary responsibility argument. Why even have a clause in your bylaws that requires a membership vote if the commissioner can just ignore it when he feels like it? The argument that the GOR completely voids any fiduciary responsibility for the ACC and supersedes all ACC bylaws is quite an argument to make.

 

[WreckinGT]

Another interesting article about the coming bidding war for financing that will include money for FSU's buyout:

FSU's ACC exit hinges on a bidding war

Up to ten financial institutions will soon bid on half a billion dollars in bonds

billfarley.substack.com

Seems pretty clear from their Project Osceola presentations that they plan to be out by 2026 no matter how much they have to pay.

 

[RonJohn]

I do like the little tidbits we get in these filings though. The ACC acknowledges the 9 year option that was unilaterally extended by the commissioner. They argue that according to the bylaws it was permissible for the Commissioner to negotiate this with ESPN because it did not meet the requirement of a material media rights agreement which would require a vote by the membership. That is certainly questionable.

Once again, I think you are reading too much into what they are saying. They are arguing the validity of FSU's argument. They say that "the extension of any ESPN deadline does not fall within the definition of a 'Material Media Rights Agreement'" They do not actually say that the ACC agreed to an extension. It looks to me as if the ACC is trying hard to NOT expose confidential contract information regarding ESPN. I think it is likely that whatever the "option" is, it was extended, but the ACC isn't specifically stating that. They are only responding to claims that FSU has made.

They also do a good job of pointing out that FSU is relying on emotion in their pleading. In the "option extension" section they say that "any action by the conference in this regard has been known to Florida State for over two years, but Florida State did not object either to the agreement or the process by which it was approved." In other sections they discuss FSU's agreement with the ESPN contract and the GOR twice. They discuss the difference between media rights, contractually agreed to withdrawal fees, and "penalties" according to legal and contractual definitions.

I am not a lawyer, but I think they make some very strong arguments in this document. There are very few fanboy type statements. (There is at least one in "Count VII" where they said "As a final Hail Mary, ....") However, the FSU complaints are filled with them. "Draconian" GOR. (That the FSU BOT explicitly agreed to twice) They quote the overstatements in the FSU complaint and then quote laws, court precedents, and the ACC bylaws to refute the FSU complaints.

However the main request in this document is to stay the proceedings in Florida until the case in NC is resolved. They are not even asking for this case to be dropped, only stayed. Then IF any of the complaints are not handled by the lawsuit in NC, then address them in the court in Florida. I understand that you can't see it, and that you don't care, but the ACC's legal documents read like legal documents, while the FSU legal documents sound like drunk people arguing at a bar.

 

[RonJohn]

It goes to the fiduciary responsibility argument. Why even have a clause in your bylaws that requires a membership vote if the commissioner can just ignore it when he feels like it? The argument that the GOR completely voids any fiduciary responsibility for the ACC and supersedes all ACC bylaws is quite an argument to make.

What? Where do they say anything like that?

What they do is define terms in the ACC Bylaws and apply those terms to what FSU is alleging to have taken place. According the the filing, a board vote is required for any "Material Media Rights Agreement". The definition for that term is that it "provides for an average annual value equal to or greater than 5% of the Conference's aggregate gross revenues". Any media agreement that doesn't fit THAT definition does not require a board vote. That if any deadline was extended it does not fit that definition. Words actually have meanings and actually matter, especially words that are defined in a contract so that they are not subject to interpretation.

I think what @orientalnc was asking is how that gets FSU out of the GOR. They signed away their media rights, period. The ACC owns FSU's media rights until 2036. Even if the ACC breaches the ACC Bylaws, the ACC still owns all of it's members media rights.

 

[L41k18]

Seems pretty clear from their Project Osceola presentations that they plan to be out by 2026 no matter how much they have to pay.

Thanks for all the cash when they finally leave..

 

[slugboy]

Another interesting article about the coming bidding war for financing that will include money for FSU's buyout:

FSU's ACC exit hinges on a bidding war

Up to ten financial institutions will soon bid on half a billion dollars in bonds

billfarley.substack.com

Seems pretty clear from their Project Osceola presentations that they plan to be out by 2026 no matter how much they have to pay.

There seem to be two contradictory ideas that FSU is holding at the same time

1. FSU is competitively disadvantaged by lower ACC payouts and has to get out ASAP
2. FSU will solve this by paying penalties, repurchasing their media rights, hopefully getting full shares from another conference—but possibly receiving less to start, taking loans from third parties that require repayment, and taking loans from a new conference against future earnings for when they receive full shares

A quick read makes it look like FSU is going to be financially behind the USCs and Michigans by racking up penalties, expenses, and debts, and possibly smaller payouts

 

[orientalnc]

There seem to be two contradictory ideas that FSU is holding at the same time

1. FSU is competitively disadvantaged by lower ACC payouts and has to get out ASAP
2. FSU will solve this by paying penalties, repurchasing their media rights, hopefully getting full shares from another conference—but possibly receiving less to start, taking loans from third parties that require repayment, and taking loans from a new conference against future earnings for when they receive full shares

A quick read makes it look like FSU is going to be financially behind the USCs and Michigans by racking up penalties, expenses, and debts, and possibly smaller payouts

I especially liked the bidding war part of the article. The current prime rate is 8.5%. Unless the State of Florida is going to co-sign with FSU on those bonds, it will VERY difficult to get what I would call favorable rates. Maybe things will be cheaper in 2026, but doesn't FSU have to have the bonds sold before they announce their exit?

 

[RonJohn]

There seem to be two contradictory ideas that FSU is holding at the same time

1. FSU is competitively disadvantaged by lower ACC payouts and has to get out ASAP
2. FSU will solve this by paying penalties, repurchasing their media rights, hopefully getting full shares from another conference—but possibly receiving less to start, taking loans from third parties that require repayment, and taking loans from a new conference against future earnings for when they receive full shares

A quick read makes it look like FSU is going to be financially behind the USCs and Michigans by racking up penalties, expenses, and debts, and possibly smaller payouts

This ACC filing also points out other contradictions. a) FSU claims that the contracts are invalid and should be dismissed by the court. and b) FSU continues to collect payouts from the contracts. Also a) FSU is asking to have their notice to withdraw from the ACC entered retroactively. while b) FSU is stating that they have not withdrawn from the ACC and b) Is still acting as a member and participating in ACC management meetings and voting on ACC matters.

The second one appears to have a hard issue to solve. I don't know of any legal way a court could backdate a document filing, but IF they do FSU is exerting influence on ACC matters during this year. There is no way that a court can extract the influence. The court would be engaging in time travel to backdate the withdrawal notice, and would not have the ability to wipe out all in-conference activities that FSU has engaged in during this year.

EDIT: Another contradiction in FSU's filings, but not part of the ACC answer. a) FSU's media rights are much more valuable than any other member of the ACC. and b) The value that FSU should pay for the return of their media rights is the average value of the ACC media payouts.

 

[orientalnc]

EDIT: Another contradiction in FSU's filings, but not part of the ACC answer. a) FSU's media rights are much more valuable than any other member of the ACC. and b) The value that FSU should pay for the return of their media rights is the average value of the ACC media payouts.

This is part my additional thoughts on the GOR.

First, the very notion that a public university would borrow $500 million to finance the move of their football team from one conference to another is abhorrent in the extreme.

Second, just because the ACC could sell FSU's media rights back to the school does not obligate them to do so. Or, that the price is negotiable or favorable to FSU. The conference could demand double or triple the face value of the rights. I think it would be ironic if FSU sold bonds to finance the purchase and then the ACC refused to sell the rights at a price FSU could afford.

Edit: FSU seems to think they could negotiate a lower price for the GOR than the face value. My thought about that is the opposite. If I own the only Honus Wagner baseball card I can pretty much name my price. Those FSU rights might not be as precious as the Wanger card, but the Noles need them if they are going to the B1G.