(09-13-2012 01:45 AM)7fielder Wrote:  That wasn't my point. Nor am I necessarily a fan of the Notre Dame news. I saw this movie before and didn't like it when it when we were in the Bigeast. I'm just saying for those that complain about the 50 million exit fee... why does that weaken the conference and a GOR strengthen it? Especially when Texas can break their GOR anytime they feel like it?

How can Texas break the gor anytime they feel like it? I've heard that mentioned before but never seen any proof?

What is the penalty onto Texas if they suddenly break their GOR?

(09-13-2012 01:45 AM)7fielder Wrote:  That wasn't my point. Nor am I necessarily a fan of the Notre Dame news. I saw this movie before and didn't like it when it when we were in the Bigeast. I'm just saying for those that complain about the 50 million exit fee... why does that weaken the conference and a GOR strengthen it? Especially when Texas can break their GOR anytime they feel like it?

Again.....do you understand the words that are coming out of my mouth?

At a $20 million buyout the threat was there that if the conference didn't do more every other time it said it was going to put a bigger influence on football, but ended up paying lip service to it....that schools actually could leave* and put the rest of the conference in jeopardy.

(* I can't provide a link, but I have been told by someone who should know that Clemson has twice in the past 25 years put it to a BOT vote to leave the ACC.)

Now that threat doesn't exist. We are all dependent on our weakest links in every sport. The hoops schools know that they don't have to be in a power conference to contend any more. Ask Butler, Gonzaga, and VCU. They know they will never contend for football titles, so why even divert the resources to try?

I have to say you are the most confrontational poster I have ever encountered and I'm not even arguing your point.

As far as Clemson having the ability to leave, you’re right. You guys got screwed.

Why do you insist on arguing with me when I am not even arguing with you?

(09-13-2012 02:15 AM)7fielder Wrote:  What is the penalty onto Texas if they suddenly break their GOR?

That the Big 12 will own all of Texas media rights for 13 years. So the Big 12 would make all the money off of Texas's TV rights and Texas would have none.

(09-13-2012 02:32 AM)ChrisLords Wrote:  

(09-13-2012 02:15 AM)7fielder Wrote:  What is the penalty onto Texas if they suddenly break their GOR?

That the Big 12 will own all of Texas media rights for 13 years. So the Big 12 would make all the money off of Texas's TV rights and Texas would have none.

Then I stand corrected. First I heard that. That is actually very punitive.

Then I am asking not stating... would you say that the Bevo GOR is similar to the 50 million ACC penalties in terms of detriment of leaving?

(09-13-2012 02:38 AM)7fielder Wrote:  

(09-13-2012 02:32 AM)ChrisLords Wrote:  

(09-13-2012 02:15 AM)7fielder Wrote:  What is the penalty onto Texas if they suddenly break their GOR?

That the Big 12 will own all of Texas media rights for 13 years. So the Big 12 would make all the money off of Texas's TV rights and Texas would have none.

Then I stand corrected. First I heard that. That is actually very punitive.

Then I am asking not stating... would you say that the Bevo GOR is similar to the 50 million ACC penalties in terms of detriment of leaving?

I think the gor is more sound until it gets late in the contract. The ACC's buy out will go up over time as conference revenues increase, while the Big 12 gor gets less punitive the closer they get to the end of it. Both are pretty rock solid.

I'm curious to see what the BE gets and if the basketball schools will stay with the football schools. Also, I'd like for NBC to play hardball with ND and force ND to see what they can get on the open market. If it's true that the current ND contract requires 8 games worth of media rights, then the next contract will probably only be for 6-7 games. For ND to get the $20-$25 million per year they want, they may have to take their rights to the open market.

(09-13-2012 02:38 AM)7fielder Wrote:  

(09-13-2012 02:32 AM)ChrisLords Wrote:  

(09-13-2012 02:15 AM)7fielder Wrote:  What is the penalty onto Texas if they suddenly break their GOR?

That the Big 12 will own all of Texas media rights for 13 years. So the Big 12 would make all the money off of Texas's TV rights and Texas would have none.

Then I stand corrected. First I heard that. That is actually very punitive.

Then I am asking not stating... would you say that the Bevo GOR is similar to the 50 million ACC penalties in terms of detriment of leaving?

Yes and no. Media contracts are back-laoded, which means that there won't be any material difference between major conference deals until late in the contracts. However, a GOR for a $20 million dollar contract 10 year contract may be worth $28 million in the last year, but $200 million in the first year. Whereas a $50 million buyout will always be worth $50 million. Since there is little incentive for schools to leave early on in the contract, the GOR is most effective when it isn't needed. However, since damages are low at the end of the contract, when there is the most differentiation, the GOR is least effective when schools are most likely to leave.

The GOR ensures that schools will be around for most of the current contract (which they probs would anyway). The high buyout ensures that schools will be around beyond the contract.

**my numbers don't take the time-value of money into account because that would needlessly complicate things**

Our Clemson firnds have overlooked the fact that the high buyout creates stability, which allows schools to invest in their future. This will likely strengthen programs. For instance, if RU could go back in time, do you think that they would have dumped a ton o fmoney into their program, which is currently worth -$19, and losing money, if they knew that they were going to end up in a glorified CUSA? I doubt that they would have, because it is a HUGE loss o ftheir part, and NJ is broke, and the school is hurting for cash. However, if you could go bakc in tim eand ensure that RU would end up in the B1G if they dumped money in their program, do you thin kthat they would have? I do, because RU would know that it would be a profitable investment. Similarily, knowing that FSU, UC, Miami, VPI, and GT will remain in the ACC lets the other schools confidently invest in their programs, because they know that they will get a return on their investment.

Also, raising the barriers to leave helps ensure the conference's composition, whihc is valuable when negotiating TV contracts. TV companies don't want to pay for a team like FSU, and then not get it, so if they think there is a chance of FSU bolting, then they will discount the price that they are willing to pay.

Increasing the buyout should lead to a larger TV contract, and to a better product on the field. It screws the teams that would have jumped to a better conference, but it helps everyone else. So, if FSU and UC would have stayed anyway, then they profit. If they would have bolted, then they lost. It's that simple.

(09-13-2012 03:56 AM)nzmorange Wrote:  ....Whereas a $50 million buyout will always be worth $50 million. ...

But it's not a flat $51 million buy out. It's 3 x current conference disbursements which happen to be $51 million this year and will go up every year.

Edit : I wonder if ND's buyout is 3 x full conference disbursements or just the non-football disbursements.

(09-13-2012 03:52 AM)ChrisLords Wrote:  

(09-13-2012 02:38 AM)7fielder Wrote:  

(09-13-2012 02:32 AM)ChrisLords Wrote:  

(09-13-2012 02:15 AM)7fielder Wrote:  What is the penalty onto Texas if they suddenly break their GOR?

That the Big 12 will own all of Texas media rights for 13 years. So the Big 12 would make all the money off of Texas's TV rights and Texas would have none.

Then I stand corrected. First I heard that. That is actually very punitive.

Then I am asking not stating... would you say that the Bevo GOR is similar to the 50 million ACC penalties in terms of detriment of leaving?

I think the gor is more sound until it gets late in the contract. The ACC's buy out will go up over time as conference revenues increase, while the Big 12 gor gets less punitive the closer they get to the end of it. Both are pretty rock solid.

I'm curious to see what the BE gets and if the basketball schools will stay with the football schools. Also, I'd like for NBC to play hardball with ND and force ND to see what they can get on the open market. If it's true that the current ND contract requires 8 games worth of media rights, then the next contract will probably only be for 6-7 games. For ND to get the $20-$25 million per year they want, they may have to take their rights to the open market.

It will never be 6 games. ND will always play a majority of home games, but you are right, there is a legit chance that it would only be for 7 games, and not 8. That will have a substantial adverse impact (about $3,000,000/yr for ND).

(09-13-2012 04:03 AM)ChrisLords Wrote:  

(09-13-2012 03:56 AM)nzmorange Wrote:  ....Whereas a $50 million buyout will always be worth $50 million. ...

But it's not a flat $51 million buy out. It's 3 x current conference disbursements which happen to be $51 million this year and will go up every year.

Edit : I wonder if ND's buyout is 3 x full conference disbursements or just the non-football disbursements.

You are missing my point. So long as athletics are important/lucrative, that number will only go up. It won't go down. However, the value of the GOR will go down every year. I promise. THAT is the difference.

nzmorange and ChrisLords... thanks and very informative posts.

Regarding a GOR or a simple exit fee, both are merely liquidated damages clauses. In other words, they are contractual starting points to determine what it costs to break a contract.

The ACC deal is equal in that the amount is fixed at 3X the yearly TV deal, which goes up annually. Each team pays that fee. Unless you can break the conference, that fee will be in place to begin negotiations from.

With the GOR, the binding element is not carried forward, it is weakened. This favors UT and OU greatly. They can go to several conferences. The remaining schools have limited options, the best being to ride UT's coattails. If UT decides to leave and goes to the Pac 12, they take OU +2. That leaves 6 schools with no major market for TV and no bargaining power, effectively destroying the conference, which in turn destroys the TV deal and thus the GOR. Where this really has teeth is that the GOR is a starting point for negotiations. As such, the Texas four can claim the remaining schools were not making the necessary efforts to uphold their duties to each other and other claims to reduce the payout. If it is far enough into the deal, they can simply opt to pay off the amount.

What remains to be seen is whether the GOR has any teeth because the remaining schools would have a duty to mitigate, in this case, replace UT, OU and two others with like schools. If they fail to replace the schools, then they fail to mitigate and there is a negotiation downward. If the actually replace the schools but not to UT/OU/+2 quality/TV draw levels, they will lose the TV deal from the networks.

In short, the GOR is not cut and dried if the leaving schools wish to fight. Applied to UT and OU, they are the major TV draws and wield the power to do as they wish with limited repercussions, plus they can afford any repercussions. The other schools lack the power and most lack the ability to face the repercussions.

In the ACC, it would take at least six teams leaving to break the conference (break, not damage).

(09-12-2012 03:05 PM)Ragu Wrote:  Can't post the article because it is premium on Warchant but I can post the topic heading. This is because all of you can readily see the post titles without paying for the content.

"BOT Chair Bense says FSU voted against increased $50 million exit fee"

So there you have it......

As I said in other threads, this is a majority vote type of thing. I have read other articles saying Virginia Tech and Clemson voted against the raising of the fee as well. This raised fee holds the league members hostage and it is ridiculous. The SEC exit fee is zero for a reason. They do things right and no one would think about leaving the conference.

What is your point?

If someone wants to leave, I doubt they pay the full amount for exit fees. Anythinng is negotiable. Also, a school wanted to leave, they could find the money. I imagine ND wanted assurance that schools wouldn't be leaving if they were going to join. I personally think a team should be able to leave with minimal penalty if they give enough notice.

(09-13-2012 07:20 AM)XLance Wrote:  

(09-12-2012 03:05 PM)Ragu Wrote:  Can't post the article because it is premium on Warchant but I can post the topic heading. This is because all of you can readily see the post titles without paying for the content.

"BOT Chair Bense says FSU voted against increased $50 million exit fee"

So there you have it......

As I said in other threads, this is a majority vote type of thing. I have read other articles saying Virginia Tech and Clemson voted against the raising of the fee as well. This raised fee holds the league members hostage and it is ridiculous. The SEC exit fee is zero for a reason. They do things right and no one would think about leaving the conference.

What is your point?

My point is that the vote wasn't unanimous . I have seen articles here and elsewhere that said inviting ND as a partial and the raising of the exit fees were agreed on by all members. For the exit fee, that wasn't the case.

I am glad so many don't care about the exit fee being raised from 9-12 million to 50 million. It shows once again how this conference thinks. Better to force teams into making it stable than actually improving the football product so everybody is thrilled with staying.

Never been a big government guy and it definitely rubs me the wrong way to see a conference forcing member schools to adopt this procedure. It should have to be unanimous or it shouldn't go through. It is unfair to force this on schools. Like I said, you should be improving the product rather than holding them hostage to make damn sure they stay (or at least VERY hard to leave)

I wonder (and I'm not trying to start WW3 here)- if FSU tried to sue to get out of the ACC and pay only the 20 million- if they would have anything to stand on. Reading that rivals report yesterday, there almost seemed to be that angle.

The only exit fees that have been negotiated down have been the B12's and that was because the wording was so poor that you could fight whether the fees were still valid. The other exit fees have only gone up from their starting point.

(09-13-2012 09:07 AM)4x4hokies Wrote:  The only exit fees that have been negotiated down have been the B12's and that was because the wording was so poor that you could fight whether the fees were still valid. The other exit fees have only gone up from their starting point.

I totally agree. look at the 3 that left the BE-
WV 5 to 20
Pitt/Syr 5 to 7.5

I just find it really weird the wording that FSU used yesterday. From the article:
"President Barron voted against it. I personally think that $50 million is punitive. I'm not sure that holds up," said Bense, who was named the chairman of the Board of Trustees for a two-year term in June. Bense also said that Maryland voted against the increased buyout. "I'm not implying that there's going to be any changes, but $50 million is a lot of money."

That just seems very strange....

(09-13-2012 08:38 AM)Ragu Wrote:  

(09-13-2012 07:20 AM)XLance Wrote:  

(09-12-2012 03:05 PM)Ragu Wrote:  Can't post the article because it is premium on Warchant but I can post the topic heading. This is because all of you can readily see the post titles without paying for the content.

"BOT Chair Bense says FSU voted against increased $50 million exit fee"

So there you have it......

As I said in other threads, this is a majority vote type of thing. I have read other articles saying Virginia Tech and Clemson voted against the raising of the fee as well. This raised fee holds the league members hostage and it is ridiculous. The SEC exit fee is zero for a reason. They do things right and no one would think about leaving the conference.

What is your point?

My point is that the vote wasn't unanimous . I have seen articles here and elsewhere that said inviting ND as a partial and the raising of the exit fees were agreed on by all members. For the exit fee, that wasn't the case.

I am glad so many don't care about the exit fee being raised from 9-12 million to 50 million. It shows once again how this conference thinks. Better to force teams into making it stable than actually improving the football product so everybody is thrilled with staying.

Never been a big government guy and it definitely rubs me the wrong way to see a conference forcing member schools to adopt this procedure. It should have to be unanimous or it shouldn't go through. It is unfair to force this on schools. Like I said, you should be improving the product rather than holding them hostage to make damn sure they stay (or at least VERY hard to leave)

Still missing your point. So what if the vote was not unanimous?
Florida State didn't have to stay. They could have chosen not to agree with the vote and left, paid their $20M and said good-bye. By not leaving they in effect agreed to the 3/4 majority vote.
BTW you failed to link all of those articles where it stated that raising the exit fee was agreed to by all members on a unanimous vote.