(02-18-2014 10:37 AM)adcorbett Wrote:  There are two things that makes a GOR flimsy in terms of forcing a team to stay. One, you have to continue to pay them in order to keep their rights. And two, every conference has a bylaw that more or less demands equal television distribution (i.e. you can't shelve the rights, say they made no money, and not pay the party). And third, which can be really problematic, are the conferences that allow teams to retain their own third tier rights. Now that means trying to punish a team by not airing their games hurts you, because you still have to pay them, PLUS they now have all of their games via third tier and can monetize them.

With the conferences licensing most or all their rights to third parties, the licensee not only has no incentive to shelve the rights, most likely they have even greater interest in using those rights because they are probably more valuable as a result of the shift than before the shift.

I knew adcorbett would chime in here. And he's right. The GOR only prevents the NEW Conference from monetizing those rights and controlling them (without buying them out from the old conference). Legal challenges to withholding payments in GoRs in the media world almost always end up a win for the entity that originated the rights in the first place, which in this case would be the school. The bottom line is, that it does not matter what the bylaws say, the conference holding the rights will end up in the end paying the school its share of the media revenue from those rights. What that amount ends up being is a point of negotiation, but it would likely be close to the full value as if it were a member of the conference.

Where the deterrent lies is that the new conference wouldn't stand for having the old conference control the rights, and would be more or less forced to buy those rights back from the old conference. And theoretically, if the school were to get a bump in revenue by being a member of the new conference, it wouldn't get that bump by having the old conference retain its media rights. But again, that would never happen because there's no way a new conference would allow the old to control those rights to begin with.

All a GoR really does is add an extra negotiation to the process of a school leaving one conference for another. It's a potentially messy negotiation, though, so it serves as a deterrent.

(02-18-2014 11:41 AM)CommuterBob Wrote:  I knew adcorbett would chime in here. And he's right. The GOR only prevents the NEW Conference from monetizing those rights and controlling them (without buying them out from the old conference). Legal challenges to withholding payments in GoRs in the media world almost always end up a win for the entity that originated the rights in the first place, which in this case would be the school. The bottom line is, that it does not matter what the bylaws say, the conference holding the rights will end up in the end paying the school its share of the media revenue from those rights. What that amount ends up being is a point of negotiation, but it would likely be close to the full value as if it were a member of the conference.

Where the deterrent lies is that the new conference wouldn't stand for having the old conference control the rights, and would be more or less forced to buy those rights back from the old conference. And theoretically, if the school were to get a bump in revenue by being a member of the new conference, it wouldn't get that bump by having the old conference retain its media rights. But again, that would never happen because there's no way a new conference would allow the old to control those rights to begin with.

All a GoR really does is add an extra negotiation to the process of a school leaving one conference for another. It's a potentially messy negotiation, though, so it serves as a deterrent.

Unless the license agreement requires the TV network to splash the old conference's logo frequently during the game, the new conference is likely agnostic about the other league "owning" the rights.

Now if Fox had won the ACC bundle of sticks, ESPN wouldn't be thrilled about an SEC game featuring a former ACC school. But ESPN doesn't care if one of their ACC properties is now an SEC property. In all likelihood they think those home games that they are paying X to the ACC for are now worth more money and will give the SEC some of that growth in value and will consider the former ACC's road games worth more and will pay the SEC for that growth in value.

With the SEC deal lasting longer, tying up the defector's rights for a few more years than they were tied up in the ACC deal will also have some value worth paying for.

Now does all that increase equal enough that the SEC wants to add that school? That is the great unknown.

(02-18-2014 11:58 AM)arkstfan Wrote:  

(02-18-2014 11:41 AM)CommuterBob Wrote:  I knew adcorbett would chime in here. And he's right. The GOR only prevents the NEW Conference from monetizing those rights and controlling them (without buying them out from the old conference). Legal challenges to withholding payments in GoRs in the media world almost always end up a win for the entity that originated the rights in the first place, which in this case would be the school. The bottom line is, that it does not matter what the bylaws say, the conference holding the rights will end up in the end paying the school its share of the media revenue from those rights. What that amount ends up being is a point of negotiation, but it would likely be close to the full value as if it were a member of the conference.

Where the deterrent lies is that the new conference wouldn't stand for having the old conference control the rights, and would be more or less forced to buy those rights back from the old conference. And theoretically, if the school were to get a bump in revenue by being a member of the new conference, it wouldn't get that bump by having the old conference retain its media rights. But again, that would never happen because there's no way a new conference would allow the old to control those rights to begin with.

All a GoR really does is add an extra negotiation to the process of a school leaving one conference for another. It's a potentially messy negotiation, though, so it serves as a deterrent.

Unless the license agreement requires the TV network to splash the old conference's logo frequently during the game, the new conference is likely agnostic about the other league "owning" the rights.

Now if Fox had won the ACC bundle of sticks, ESPN wouldn't be thrilled about an SEC game featuring a former ACC school. But ESPN doesn't care if one of their ACC properties is now an SEC property. In all likelihood they think those home games that they are paying X to the ACC for are now worth more money and will give the SEC some of that growth in value and will consider the former ACC's road games worth more and will pay the SEC for that growth in value.

With the SEC deal lasting longer, tying up the defector's rights for a few more years than they were tied up in the ACC deal will also have some value worth paying for.

Now does all that increase equal enough that the SEC wants to add that school? That is the great unknown.

And the conference usually does flash those logos all over the place on the conference broadcasts, as well as the conference providing advertising spots in commercial breaks. The other issue is that the new conference wouldn't be able to have a say in when games are played - as they would have no control over the rights. Sure the networks have the controlling interest, but the conference and the school work with the network to make that work.

And in the case of the XII, where two networks split the Tier 1/2 package, that could be a point of contention if a team were to move to a conference where different/fewer networks are involved.

(02-18-2014 11:20 AM)arkstfan Wrote:  With the conferences licensing most or all their rights to third parties, the licensee not only has no incentive to shelve the rights, most likely they have even greater interest in using those rights because they are probably more valuable as a result of the shift than before the shift.

Absolutely. I was just laying out the only solution that the conference could try to enforce to punish the team who left, and how even then, it would backfire.

(02-18-2014 11:41 AM)CommuterBob Wrote:  I knew adcorbett would chime in here. And he's right.

Hey now. I don't come to this board very often.

(02-18-2014 11:41 AM)CommuterBob Wrote:  Where the deterrent lies is that the new conference wouldn't stand for having the old conference control the rights, and would be more or less forced to buy those rights back from the old conference. And theoretically, if the school were to get a bump in revenue by being a member of the new conference, it wouldn't get that bump by having the old conference retain its media rights. But again, that would never happen because there's no way a new conference would allow the old to control those rights to begin with..

On top of that, there is no way the old conference would want to deal with the issue of the former team taking up its broadcast windows, or in some cases taking up it's prime time windows. Nor would they want to advertise the new conference's games during their own broadcasts. So it just gets messy all around.

However the one thing that is true, is that the only teams who will ever even be in a position to try this, would be one who brings value to the new conference by simply appearing on their schedule. Notre Dame with the ACC laid the blueprint for this, where they got a huge bump in pay simply for having a guaranteed 2.5 ND road games in their TV contract. If a team moved, and by virtue of simply proving 4-5 road conference games per season, plus any contributions to third tier, made the new conference enough money to put up with the short term issues of an in place GOR, then it could work. No one else is worth the trouble.

Which then of course begs the question: who does a GOR serve? Hint, it is not the team at a position of weakness.

(02-18-2014 12:06 PM)adcorbett Wrote:  

(02-18-2014 11:20 AM)arkstfan Wrote:  With the conferences licensing most or all their rights to third parties, the licensee not only has no incentive to shelve the rights, most likely they have even greater interest in using those rights because they are probably more valuable as a result of the shift than before the shift.

Absolutely. I was just laying out the only solution that the conference could try to enforce to punish the team who left, and how even then, it would backfire.

(02-18-2014 11:41 AM)CommuterBob Wrote:  I knew adcorbett would chime in here. And he's right.

Hey now. I don't come to this board very often.

(02-18-2014 11:41 AM)CommuterBob Wrote:  Where the deterrent lies is that the new conference wouldn't stand for having the old conference control the rights, and would be more or less forced to buy those rights back from the old conference. And theoretically, if the school were to get a bump in revenue by being a member of the new conference, it wouldn't get that bump by having the old conference retain its media rights. But again, that would never happen because there's no way a new conference would allow the old to control those rights to begin with..

On top of that, there is no way the old conference would want to deal with the issue of the former team taking up its broadcast windows, or in some cases taking up it's prime time windows. Nor would they want to advertise the new conference's games during their own broadcasts. So it just gets messy all around.

However the one thing that is true, is that the only teams who will ever even be in a position to try this, would be one who brings value to the new conference by simply appearing on their schedule. Notre Dame with the ACC laid the blueprint for this, where they got a huge bump in pay simply for having a guaranteed 2.5 ND road games in their TV contract. If a team moved, and by virtue of simply proving 4-5 road conference games per season, plus any contributions to third tier, made the new conference enough money to put up with the short term issues of an in place GOR, then it could work. No one else is worth the trouble.

Which then of course begs the question: who does a GOR serve? Hint, it is not the team at a position of weakness.

I've always said this. When WVU fans were crowing that the GOR protects them from Texas blowing up the conference, I've always felt it's much more about keeping WVU, Kansas, etc in Texas' league, not Texas in their league.

By the way, one of the best known case of a grant of rights agreement are the Beatles catalog which is more or less a grant of rights issue. So it is most of the proof that GOR's are legal. It also showed how even after McCartney and Lennon left their publisher, the publisher still owned the new songs they recorded until the GOR was up, but they still had to be paid for their use and retention. Note that the company they formed to equally hold their rights and distribute the money was later bought out and is now owned by Michael Jackson's estate, hence why they no longer received those royalties. But they separately were paid and bought out of them beyond the GOR contract for the rights holder to continue using them without compensation.

The ACC negotiated their current contract with ESPN before the signing of the GoR by its current members and the departure of Maryland. What is the difference between a Media Rights Contract negotiation with a GoR and without a GoR? Could the ACC have gotten more $ when negotiating their contract with ESPN if they already had a GoR in place?

(02-13-2014 04:27 PM)quo vadis Wrote:  ... or is it really between the two conferences?

For example, imagine if Kansas decides to join the B1G. Let's also stipulate that Kansas will get the same media money from the B1G as it is getting from the Big 12, so it is leaving the Big 12 for other reasons.

In this scenario, is it really necessary for Kansas to "break" the GOR with the Big 12? Kansas could sit back and let the Big 12 broadcast its home games, all of them, even those with other B1G teams, as in accordance with its Big 12 GOR agreement.

And the Big 12 (and its broadcasting partners) doesn't necessarily have to have a problem with this either: They continue to televise all Kansas home games, it's just that those games are no longer Big 12 games and don't involve Big 12 teams. Instead of home games like Kansas vs Texas Tech they are broadcasting Kansas vs Michigan. But those games are still just as valuable to advertisers. So the Big 12 continues to pay Kansas its share of its media money, which, since it is the same as the B1G media money, is fine with Kansas too.

So who would have a problem with this scenario? Not Kansas or the Big 12, it would be the B1G. Because the B1G would not have the rights to B1G games that involve Kansas playing at home. That is, if Kansas is part of the B1G media deal, then Michigan at Kansas is owned by the B1G and its media partners. But if Kansas's media rights are still owned by the Big 12, then Michigan at Kansas is owned by the Big 12 and the B1G loses out on that game. It also doesn't get the rights to Kansas's home games versus out-of-conference competition.

So while GOR disputes are framed as involving a fundamental dispute between the exiting team and its conference, it's really the NEW conference that has the fundamental imperative to break that existing GOR, so they can claim their new team's media rights, which presumably was a reason they wanted that school to join.

Of course, the way the B1G would protect itself is by not allowing this scenario to develop: Before Kansas is allowed into the B1G, the B1G will make it clear to Kansas that it will have to somehow get out of its media deal with the Big 12.

This fact sets the B1G up as a potential target of a Big 12 lawsuit, for tortuous interference. It would be difficult for the B1G to claim that Kansas was suing of its own volition to get out of its Big 12 GOR when it would be obvious that the B1G was the driving force behind such an action.

One other thing to consider in your example of Michigan at Kansas is whether that game would be a tier1 or tier2 game. If I'm not mistaken, ESPN and Fox alternate choices on broadcasting tier1 and tier2 games. Kansas has a reputation of being a tier2/tier3 game. Wouldn't that come into play here?

In his example, the Big 10 would simply not share in Tier 1/2 money with Kansas until they are able to sign over their rights to the Big Ten, and instead Kansas would be paid by the Big 12. However Kansas would share in any tier 3 revenue since they are helping earn that. To the extent that Kansas road games add any value to the conference (until they get their rights back), that would be a consideration. That is why a bigger fish, such as say Texas or Oklahoma, who by virtue of playing @ Michigan or @ Ohio State, can make the Big Ten money just on their name, that type of team would be the one more likely to move even without its rights, because the new conference can still make money on them even without their own home rights.