(08-11-2021 09:05 AM)johnbragg Wrote:  A lot of people argue that the school presidents and commissioners have smart lawyers in expensive suits and so they wouldn't make a bonehead move like write a Grant of Rights that would get thrown out of court by Judge Judy. I'd respond that there is at least a 10% chance that a judge throws out the Grant of Rights as a contract without consideration.

There seems to be this weird idea that the grants of rights in discussion are a new, untested thing. They have been around for 100 years in media. Many musicians, actors, directors, and producers have been subject to them for years. They hold up just fine... So long as the rights holder keeps up their contractual end of the bargain, which is where it likely falls apart if tested in the world we are talking about. Whenever grants of rights (not called specifically that across other mediums - but basically the same thing) are tossed out by courts, it is because the rights holder attempted to keep and profit off the retained rights but DID NOT pay the origination what they were contractually obligated.

Bringing that scenario back to college sports, to enforce grants of rights if a team were to leave, the league would still have to pay them to retain those rights. It’s not free money. I think the Big 12 had some clause in theirs that said something about forfeiting money owed if a team left, but that would be DOA in a court. But if a team left, the league would still need to pay them to keep their rights or would leave themselves open for a lawsuit they likely lose very quickly, basically as soon as the first check is missed, which puts a league in an awkward position to still pay the old team, and potentially have said teams’ games in their prime TV slots, taking airtime from the remaining teams.

It would be ugly, and a compromise would be reached quickly MO.

(08-11-2021 12:22 PM)XLance Wrote:  

(08-11-2021 11:11 AM)johnbragg Wrote:  

(08-11-2021 10:52 AM)XLance Wrote:  

(08-11-2021 09:05 AM)johnbragg Wrote:  First of all, I don't think the Grant Of Rights is ironclad. There's a very good chance it doesn't hold up in court. On the other hand, it very well COULD hold up in court.

On what legal precedent did you base your opening statement?

First, from watching Judge Judy 20 years ago. A contract is only valid if both sides get a valuable consideration. The Grant-of-Rights doesn't give Texas or Oklahoma any valuable consideration, as far as I can tell.

Rocket Lawyer: What is Consideration

Second, I learned from the Big East-West Virginia lawsuits that, just because it was agreed to in a contract, doesn't mean it will stand up in court.

You should have stayed at a Holiday Inn Express, Judge Judy can only take you so far.

As a lawyer, I would strongly disagree that the Grant of Rights doesn't provide valuable consideration.

The consideration here is that the Grant of Rights allowed for the Big 12 to go to market to obtain maximum value for their media markets. The Big 12's TV contracts were also made in reliance on the Grant of Rights agreement being in place - that could be argued by attorneys as as an implicit reliance or there might even be explicit language in those TV contracts outright stating that ESPN and Fox were entering those deals relying upon the existence of the GOR.

I really don't think the GOR is "breakable" from a legal perspective in the sense that the court will somehow throw it out as unenforceable. There's very little chance of that occurring. If UT and OU really thought they had a chance at that argument, they wouldn't be taking so many pains to state that they wouldn't be leaving for the SEC until 2025 - they'd outright state that they're leaving now. How much UT and OU might pay in damages or fees to enable to get them into the SEC earlier, on the other hand, is an open question.

There is some number above the amount that it will cost OU and Texas to leave in 2025 at which the Little 8 will accept to let OU and Texas leave early. It is probably a pretty large number, but I'm guessing the parties will make an effort to negotiate as sticking around for the full four years is going to be pretty uncomfortable for everyone.

(08-12-2021 09:03 AM)adcorbett Wrote:  

(08-11-2021 09:05 AM)johnbragg Wrote:  A lot of people argue that the school presidents and commissioners have smart lawyers in expensive suits and so they wouldn't make a bonehead move like write a Grant of Rights that would get thrown out of court by Judge Judy. I'd respond that there is at least a 10% chance that a judge throws out the Grant of Rights as a contract without consideration.

There seems to be this weird idea that the grants of rights in discussion are a new, untested thing. They have been around for 100 years in media. Many musicians, actors, directors, and producers have been subject to them for years. They hold up just fine... So long as the rights holder keeps up their contractual end of the bargain, which is where it likely falls apart if tested in the world we are talking about. Whenever grants of rights (not called specifically that across other mediums - but basically the same thing) are tossed out by courts, it is because the rights holder attempted to keep and profit off the retained rights but DID NOT pay the origination what they were contractually obligated.

Which is exactly what the Big 12 (and ACC) Grants-of-Rights are openly designed to do.

Quote:Bringing that scenario back to college sports, to enforce grants of rights if a team were to leave, the league would still have to pay them to retain those rights. It’s not free money. I think the Big 12 had some clause in theirs that said something about forfeiting money owed if a team left, but that would be DOA in a court. But if a team left, the league would still need to pay them to keep their rights or would leave themselves open for a lawsuit they likely lose very quickly, basically as soon as the first check is missed, which puts a league in an awkward position to still pay the old team, and potentially have said teams’ games in their prime TV slots, taking airtime from the remaining teams.

It would be ugly, and a compromise would be reached quickly MO.

That's what people mean when they say that a Grant Of Rights could be thrown out in court. If the end result is that, in 2024, Oklahoma plays Texas in a game that counts in the SEC standings, on Fox under the Big 12 TV contract, and Oklahoma and Texas collect checks for their share of the Big 12 TV contract....

....that completely defeats the purpose of why the Big 12 and ACC put in Grant of Rights provisions in the first place.

(08-12-2021 12:37 PM)johnbragg Wrote:  

(08-12-2021 09:03 AM)adcorbett Wrote:  

(08-11-2021 09:05 AM)johnbragg Wrote:  A lot of people argue that the school presidents and commissioners have smart lawyers in expensive suits and so they wouldn't make a bonehead move like write a Grant of Rights that would get thrown out of court by Judge Judy. I'd respond that there is at least a 10% chance that a judge throws out the Grant of Rights as a contract without consideration.

There seems to be this weird idea that the grants of rights in discussion are a new, untested thing. They have been around for 100 years in media. Many musicians, actors, directors, and producers have been subject to them for years. They hold up just fine... So long as the rights holder keeps up their contractual end of the bargain, which is where it likely falls apart if tested in the world we are talking about. Whenever grants of rights (not called specifically that across other mediums - but basically the same thing) are tossed out by courts, it is because the rights holder attempted to keep and profit off the retained rights but DID NOT pay the origination what they were contractually obligated.

Which is exactly what the Big 12 (and ACC) Grants-of-Rights are openly designed to do.

I agree -- I question whether the Big 12 or ACC would ever want to press their luck by forcing a member to stay and retaining their TV rights while not paying them, even if the contract says or arguably says they can.

Threatening to do that is one thing; people make threats all the time that aren't carried out. Actually doing it is a riskier step that could lead to the entire agreement being voided.

(08-12-2021 09:59 AM)Frank the Tank Wrote:  

(08-11-2021 12:22 PM)XLance Wrote:  

(08-11-2021 11:11 AM)johnbragg Wrote:  

(08-11-2021 10:52 AM)XLance Wrote:  

(08-11-2021 09:05 AM)johnbragg Wrote:  First of all, I don't think the Grant Of Rights is ironclad. There's a very good chance it doesn't hold up in court. On the other hand, it very well COULD hold up in court.

On what legal precedent did you base your opening statement?

First, from watching Judge Judy 20 years ago. A contract is only valid if both sides get a valuable consideration. The Grant-of-Rights doesn't give Texas or Oklahoma any valuable consideration, as far as I can tell.

Rocket Lawyer: What is Consideration

Second, I learned from the Big East-West Virginia lawsuits that, just because it was agreed to in a contract, doesn't mean it will stand up in court.

You should have stayed at a Holiday Inn Express, Judge Judy can only take you so far.

As a lawyer, I would strongly disagree that the Grant of Rights doesn't provide valuable consideration.

The consideration here is that the Grant of Rights allowed for the Big 12 to go to market to obtain maximum value for their media markets. The Big 12's TV contracts were also made in reliance on the Grant of Rights agreement being in place - that could be argued by attorneys as as an implicit reliance or there might even be explicit language in those TV contracts outright stating that ESPN and Fox were entering those deals relying upon the existence of the GOR.

I really don't think the GOR is "breakable" from a legal perspective in the sense that the court will somehow throw it out as unenforceable. There's very little chance of that occurring. If UT and OU really thought they had a chance at that argument, they wouldn't be taking so many pains to state that they wouldn't be leaving for the SEC until 2025 - they'd outright state that they're leaving now.

What you're saying would make sense if the GOR being breakable were a certainty. But it's not, it's a gamble with a large downside and a large upside.

There's no reason to say that now. Negotiations haven't even begun. The pre-negotiation dance of signalling has barely begun.

There isn't anything like a deadline until late next spring, when conferences send out distribution checks. (AFAIK, the conferences send those checks towards the end of the school year.) I'd expect a deal to be done before that point--Texas and Oklahoma aren't going to want to go completely without, everybody is going to want certainty.

If a deal isn't done at that point, then parties might get less conservative.

(08-12-2021 09:03 AM)adcorbett Wrote:  

(08-11-2021 09:05 AM)johnbragg Wrote:  A lot of people argue that the school presidents and commissioners have smart lawyers in expensive suits and so they wouldn't make a bonehead move like write a Grant of Rights that would get thrown out of court by Judge Judy. I'd respond that there is at least a 10% chance that a judge throws out the Grant of Rights as a contract without consideration.

There seems to be this weird idea that the grants of rights in discussion are a new, untested thing. They have been around for 100 years in media. Many musicians, actors, directors, and producers have been subject to them for years. They hold up just fine... So long as the rights holder keeps up their contractual end of the bargain, which is where it likely falls apart if tested in the world we are talking about. Whenever grants of rights (not called specifically that across other mediums - but basically the same thing) are tossed out by courts, it is because the rights holder attempted to keep and profit off the retained rights but DID NOT pay the origination what they were contractually obligated.

Bringing that scenario back to college sports, to enforce grants of rights if a team were to leave, the league would still have to pay them to retain those rights. It’s not free money. I think the Big 12 had some clause in theirs that said something about forfeiting money owed if a team left, but that would be DOA in a court. But if a team left, the league would still need to pay them to keep their rights or would leave themselves open for a lawsuit they likely lose very quickly, basically as soon as the first check is missed, which puts a league in an awkward position to still pay the old team, and potentially have said teams’ games in their prime TV slots, taking airtime from the remaining teams.

It would be ugly, and a compromise would be reached quickly MO.

I agree with this. The problem here is that it is *this particular clause*, the clause that says if you leave for another conference, the "left" conference gets to keep your media rights AND you don't get paid, don't get a share of the annual conference media payout over the rest of the GOR, that is THE mechanism that the conferences that have enacted the GOR are relying on to "bind" schools to them and keep them from leaving! I think that not only the Big 12, but also the ACC and everyone else with a GOR has this same clause. That clause is supposed to shackle the school to the conference.

Toss that mechanism out - which I agree a court may very well do - and you've largely, arguably completely, undermined the GOR as a "tie that binds", which is what the conferences wanted to do when they created the GOR.

(08-12-2021 09:59 AM)Frank the Tank Wrote:  

(08-11-2021 12:22 PM)XLance Wrote:  

(08-11-2021 11:11 AM)johnbragg Wrote:  

(08-11-2021 10:52 AM)XLance Wrote:  

(08-11-2021 09:05 AM)johnbragg Wrote:  First of all, I don't think the Grant Of Rights is ironclad. There's a very good chance it doesn't hold up in court. On the other hand, it very well COULD hold up in court.

On what legal precedent did you base your opening statement?

First, from watching Judge Judy 20 years ago. A contract is only valid if both sides get a valuable consideration. The Grant-of-Rights doesn't give Texas or Oklahoma any valuable consideration, as far as I can tell.

Rocket Lawyer: What is Consideration

Second, I learned from the Big East-West Virginia lawsuits that, just because it was agreed to in a contract, doesn't mean it will stand up in court.

You should have stayed at a Holiday Inn Express, Judge Judy can only take you so far.

As a lawyer, I would strongly disagree that the Grant of Rights doesn't provide valuable consideration.

The consideration here is that the Grant of Rights allowed for the Big 12 to go to market to obtain maximum value for their media markets. The Big 12's TV contracts were also made in reliance on the Grant of Rights agreement being in place - that could be argued by attorneys as as an implicit reliance or there might even be explicit language in those TV contracts outright stating that ESPN and Fox were entering those deals relying upon the existence of the GOR.

I really don't think the GOR is "breakable" from a legal perspective in the sense that the court will somehow throw it out as unenforceable. There's very little chance of that occurring. If UT and OU really thought they had a chance at that argument, they wouldn't be taking so many pains to state that they wouldn't be leaving for the SEC until 2025 - they'd outright state that they're leaving now. How much UT and OU might pay in damages or fees to enable to get them into the SEC earlier, on the other hand, is an open question.

In that case, it would seem to my layman self that if say TX and OU leave the Big 12 two years early, in 2023, the Big 12 has no complaint, and no justification for withholding media payments from TX and OU those two years after they leave, so long as the Big 12 continues to get the agreed-on money from its media partners, FOX and ESPN. Because the advantages you speak of of the GOR, the consideration, the "having a GOR premium" in the payment amount, and maybe even the contract existing at all, is baked in to that current arrangement.

So it seems to me that if the issue of TX and OU leaving would boil down to how FOX and ESPN handle that departure in terms of media payments. ESPN, presumably, would be willing to pay the Big 12 the previously agreed-upon share, just to make things easy for TX and OU joining the SEC, which they would presumably enjoy.

FOX would be the wild-card, as they are losing two key properties. FOX could be seemingly be made whole, and thus agree to its full-share payout as well, by giving it rights to some TX and OU home games during those two years while TX and OU are in the SEC.

At that point, IMO the justification for the Big 12 collecting those monies but not giving TX and OU their share would be ... nonexistent. There's no consideration TX and OU have received for forfeiting those shares, nor has the Big 12 suffered any losses that they would compensate for. It's not that GORs are invalid in some general sense, but just in this case, because it contains an unreasonable clause.

Just my worthless two cents ....

(08-12-2021 01:11 PM)quo vadis Wrote:  

(08-12-2021 09:03 AM)adcorbett Wrote:  

(08-11-2021 09:05 AM)johnbragg Wrote:  A lot of people argue that the school presidents and commissioners have smart lawyers in expensive suits and so they wouldn't make a bonehead move like write a Grant of Rights that would get thrown out of court by Judge Judy. I'd respond that there is at least a 10% chance that a judge throws out the Grant of Rights as a contract without consideration.

There seems to be this weird idea that the grants of rights in discussion are a new, untested thing. They have been around for 100 years in media. Many musicians, actors, directors, and producers have been subject to them for years. They hold up just fine... So long as the rights holder keeps up their contractual end of the bargain, which is where it likely falls apart if tested in the world we are talking about. Whenever grants of rights (not called specifically that across other mediums - but basically the same thing) are tossed out by courts, it is because the rights holder attempted to keep and profit off the retained rights but DID NOT pay the origination what they were contractually obligated.

Bringing that scenario back to college sports, to enforce grants of rights if a team were to leave, the league would still have to pay them to retain those rights. It’s not free money. I think the Big 12 had some clause in theirs that said something about forfeiting money owed if a team left, but that would be DOA in a court. But if a team left, the league would still need to pay them to keep their rights or would leave themselves open for a lawsuit they likely lose very quickly, basically as soon as the first check is missed, which puts a league in an awkward position to still pay the old team, and potentially have said teams’ games in their prime TV slots, taking airtime from the remaining teams.

It would be ugly, and a compromise would be reached quickly MO.

I agree with this. The problem here is that it is *this particular clause*, the clause that says if you leave for another conference, the "left" conference gets to keep your media rights AND you don't get paid, don't get a share of the annual conference media payout over the rest of the GOR, that is THE mechanism that the conferences that have enacted the GOR are relying on to "bind" schools to them and keep them from leaving! I think that not only the Big 12, but also the ACC and everyone else with a GOR has this same clause. That clause is supposed to shackle the school to the conference.

Toss that mechanism out - which I agree a court may very well do - and you've largely, arguably completely, undermined the GOR as a "tie that binds", which is what the conferences wanted to do when they created the GOR.

Right. If I'm UT and OU, I'm sketching out a proposal on a napkin:

1. UT and OU pay 2 years of Big 12 conference distributions as exit fee, as per bylaws.
1A. Exit fee is spread out over at least 4 years, details highly negotiable.
2. UT and OU start SEC play in 2023-24.
3. UT and OU's television rights remain with the Big 12 (Fox/ESPN split) for the duration of the GOR and of the Big 12 TV contract.
4. UT and OU collect their 10%h share e of the Big 12 TV revenues for 2023-24 and 2024-25.
5. UT and OU don't collect any SEC TV revenue for those two years.

If the Big 12 doesn't like that, then UT and OU are content to wait until 2025 to join the SEC., go without confreerence distruibutions for two years. MIf the Big 12 wants morere thatn that , and OU and UT go for the jailbreak.

Knock, knock! Hello!

Who said anything about a legal challenge. It's an unnecessary assumption.

1. The 8 are miffed. So yes a legal challenge is possible.

2. The PAC and ACC are underpaid and the ACC is tied up until 2036.

3. The ACC has a renegotiation clause if they add schools.

4. The PAC could make more money with added time slots to sell.

5. FOX seems silently complicit in what is transpiring.

6. Prime antagonists Baylor and TCU get an ACC invitation. The result is the ACC now earns 45 million with a more recent evaluation and DFW and part of Houston and picks up the current basketball champ in the process. So the ACCN grows its base. TCU and Baylor shut up and urge settlement.

7. ESPN and FOX encourage PAC expansion for time slots. TCU's off the table and Texas Tech has a lot of alums in DFW. OSU has a lot of alums in DFW and KSU has a lot of alums in DFW and together they bring in a combined 17 million viewers. Iowa State is AAU and makes a natural rival for Iowa and adds a little over 3 million more. The PAC is rewarded, the new commish deserves cooperation on his first move and now 6 of the 8 want out with a quick settlement. Either FOX or ESPN takes over the PACN and the PAC jumps up mid 40's or slightly higher.

8. During the ACC's open window of additions and raises and realizing that a closed system is upon them ND gives in to B1G overtures and Kansas is their traveling companion. ESPN gives their blessing because they will keep 50% of B1G T1 & T2 rights and 50% of ND in the B1G is worth more to them than 33% of them in the ACC. The B1G plays catch up to the SEC in media revenue. Warren looks good. Delany helped arrange it and Mickey Mouse comes out ahead again along with its silent partner. To allay B1G concerns both the ACC and SEC sign scheduling alliances allowing for games in Florida, Georgia, Louisiana, and Texas.

9. Screw the babble over GOR's everyone is better off financially but WVU who waits in the wings for either Wake or Vandy to cry uncle over NIL and what are likely to be uncapped stipends by Summer of 2022. And none dare call it collusion if everyone profiteth!

Now that's the surest way around a GOR. And between FOX and ESPN they have the means, the motive and the opportunity.

Then ESPN wraps it up in time to claim that 12 or 8 team CFP before it comes to market and that folks is how corporate America does things. The GORs were always more of a tool to hold product in place for the networks than it was for conference security and two haves were the pressure for 3 have nots to cooperate in a product placement exercise and the implementation of a more profitable and somewhat less contentious playoff structure.

(08-12-2021 09:59 AM)Frank the Tank Wrote:  

(08-11-2021 12:22 PM)XLance Wrote:  

(08-11-2021 11:11 AM)johnbragg Wrote:  

(08-11-2021 10:52 AM)XLance Wrote:  

(08-11-2021 09:05 AM)johnbragg Wrote:  First of all, I don't think the Grant Of Rights is ironclad. There's a very good chance it doesn't hold up in court. On the other hand, it very well COULD hold up in court.

On what legal precedent did you base your opening statement?

First, from watching Judge Judy 20 years ago. A contract is only valid if both sides get a valuable consideration. The Grant-of-Rights doesn't give Texas or Oklahoma any valuable consideration, as far as I can tell.

Rocket Lawyer: What is Consideration

Second, I learned from the Big East-West Virginia lawsuits that, just because it was agreed to in a contract, doesn't mean it will stand up in court.

You should have stayed at a Holiday Inn Express, Judge Judy can only take you so far.

As a lawyer, I would strongly disagree that the Grant of Rights doesn't provide valuable consideration.

The consideration here is that the Grant of Rights allowed for the Big 12 to go to market to obtain maximum value for their media markets.

The GOR is a contract between Oklahoma and the Big 12, or between the 10 Big 12 members. If Oklahoma is not a Big 12 member, and not collecting Big 12 media revenue, how is a bigger Big 12 TV contract "valuable consideration"??

(08-12-2021 02:17 PM)johnbragg Wrote:  

(08-12-2021 09:59 AM)Frank the Tank Wrote:  

(08-11-2021 12:22 PM)XLance Wrote:  

(08-11-2021 11:11 AM)johnbragg Wrote:  

(08-11-2021 10:52 AM)XLance Wrote:  On what legal precedent did you base your opening statement?

First, from watching Judge Judy 20 years ago. A contract is only valid if both sides get a valuable consideration. The Grant-of-Rights doesn't give Texas or Oklahoma any valuable consideration, as far as I can tell.

Rocket Lawyer: What is Consideration

Second, I learned from the Big East-West Virginia lawsuits that, just because it was agreed to in a contract, doesn't mean it will stand up in court.

You should have stayed at a Holiday Inn Express, Judge Judy can only take you so far.

As a lawyer, I would strongly disagree that the Grant of Rights doesn't provide valuable consideration.

The consideration here is that the Grant of Rights allowed for the Big 12 to go to market to obtain maximum value for their media markets.

The GOR is a contract between Oklahoma and the Big 12, or between the 10 Big 12 members. If Oklahoma is not a Big 12 member, and not collecting Big 12 media revenue, how is a bigger Big 12 TV contract "valuable consideration"??

That argument is illusory.

The consideration that OU received was at the time that the GOR Agreement was executed and that will generally be judged as sufficient. (I’d be surprised if the contract didn’t state upfront, “For good and valuable consideration, the parties agree…”) Even if you were to argue that continuing consideration is necessary, OU can’t subsequently breach a contract (or the Big 12 by-laws, as the case may be) and then turn around and argue that the GOR Agreement is unenforceable where they’re now no longer receiving consideration *because* of their own breach. No reasonable judge is going to buy that argument - there’s a public policy interest to not allow a party to breach one contract that would then allow that same party to try to call another agreement in unenforceable due to that party’s breach.

This is a weird case where a lot of fans seem to want to believe that the GOR Agreement *legal* issues are complicated, but they truly aren’t. It’s a super simple contract consisting of maybe a couple of pages. As adcorbett noted above, GOR Agreements have been common and enforceable for a very long time in the entertainment industry. The Big 12 straight up owns the TV rights to UT and OU until 2025. No one is contesting it.

What’s complicated is what financial number it will take for the Big 12 to allow UT and OU to extricate itself from that GOR (if that number even exists). That’s something that’s not defined in the contract, so we really don’t know what that number will be.

There will certainly be lawsuits, but this honestly isn’t a legal interpretation issue at the core. It’s a financial one.

(08-11-2021 10:28 AM)johnbragg Wrote:  

(08-11-2021 10:00 AM)quo vadis Wrote:  That's not unprecedented, e.g., IIRC, when Navy joined the AAC, they had an existing TV deal with CBS, so CBS remained their broadcast partner, separate from the rest of the AAC and their ESPN deal, for the first few years of their membership.

That's not the same. CBS paid Navy to televise their games. Under the text of the Grant of Rights, OU and UT can join the SEC, they just won't get paid for their TV rights.

They've gotten paid ... conference distributions from the start of the grant of rights until the date they inform the conference they are going to leave, or through the end of the 2024/2025 athletic years, for their home game rights from the start of the grant of rights until the end of June, 2025, as agreed.

They are not granting the rights annually and getting paid annually, they granted their rights for a block of time, in return for revenue sharing on agreed terms.

Again, IANDL, but grants of rights are used all over the economy. There are going to be dozens of precedents on this, if not hundreds. And a Federal judge is not likely to ignore precedent because of the local political clout of some school's alumni base.

(08-11-2021 10:40 AM)UofMstateU Wrote:  ... As for the breach of contract (ie GOR) this could be correct. The damages caused by breach of contract is limited to just that, the actual damages. ...

What breach? The only thing that Texas and Oklahoma can do to get the rights back early without the agreement of the R8 is to take it to court and get a Federal judge to agree that there is a legal flaw in the GOR agreement that releases them from it and returns their rights to them.

But that is not a breach, that is a court determining that the contract is null and void.

Is it imagined that they can just give permission to the SEC to air their home games and the SEC bundle that permission into their own contract with ESPN and ESPN air the home games under that contract ... without anybody in the Big12 noticing before airtime?

Because the game would actually have to go to air in violation of the GOR to breach the agreement. An effort to do so and an injunction forbidding ESPN from airing that game under those auspices would not be a breach, it would be preventing a breach.

A lot of us learned a lot about breaches of contracts during the whole messy fall of the old Big East from grace ... but we don't get to transfer that over to another legal question unless a breach occurs.

____________

(08-12-2021 11:00 PM)Frank the Tank Wrote:  The consideration that OU received was at the time that the GOR Agreement was executed and that will generally be judged as sufficient. (I’d be surprised if the contract didn’t state upfront, “For good and valuable consideration, the parties agree…”) Even if you were to argue that continuing consideration is necessary, OU can’t subsequently breach a contract (or the Big 12 by-laws, as the case may be) and then turn around and argue that the GOR Agreement is unenforceable where they’re now no longer receiving consideration *because* of their own breach. No reasonable judge is going to buy that argument - there’s a public policy interest to not allow a party to breach one contract that would then allow that same party to try to call another agreement in unenforceable due to that party’s breach.

Indeed, it would not be surprising if one of the more aspects of having all schools agree to certain limits on their behavior ... that cannot really be enforced on a school that is leaving ... is to undermine the basis for challenges to the GOR by schools which will have certainly breached those limits as part of the process of negotiating an agreement to accept them if they should "apply to join" the raiding conference.

(08-12-2021 11:00 PM)Frank the Tank Wrote:  

(08-12-2021 02:17 PM)johnbragg Wrote:  

(08-12-2021 09:59 AM)Frank the Tank Wrote:  

(08-11-2021 12:22 PM)XLance Wrote:  

(08-11-2021 11:11 AM)johnbragg Wrote:  First, from watching Judge Judy 20 years ago. A contract is only valid if both sides get a valuable consideration. The Grant-of-Rights doesn't give Texas or Oklahoma any valuable consideration, as far as I can tell.

Rocket Lawyer: What is Consideration

Second, I learned from the Big East-West Virginia lawsuits that, just because it was agreed to in a contract, doesn't mean it will stand up in court.

You should have stayed at a Holiday Inn Express, Judge Judy can only take you so far.

As a lawyer, I would strongly disagree that the Grant of Rights doesn't provide valuable consideration.

The consideration here is that the Grant of Rights allowed for the Big 12 to go to market to obtain maximum value for their media markets.

The GOR is a contract between Oklahoma and the Big 12, or between the 10 Big 12 members. If Oklahoma is not a Big 12 member, and not collecting Big 12 media revenue, how is a bigger Big 12 TV contract "valuable consideration"??

That argument is illusory.

The consideration that OU received was at the time that the GOR Agreement was executed and that will generally be judged as sufficient. (I’d be surprised if the contract didn’t state upfront, “For good and valuable consideration, the parties agree…”) Even if you were to argue that continuing consideration is necessary, OU can’t subsequently breach a contract (or the Big 12 by-laws, as the case may be) and then turn around and argue that the GOR Agreement is unenforceable where they’re now no longer receiving consideration *because* of their own breach. No reasonable judge is going to buy that argument - there’s a public policy interest to not allow a party to breach one contract that would then allow that same party to try to call another agreement in unenforceable due to that party’s breach.

This is a weird case where a lot of fans seem to want to believe that the GOR Agreement *legal* issues are complicated, but they truly aren’t. It’s a super simple contract consisting of maybe a couple of pages. As adcorbett noted above, GOR Agreements have been common and enforceable for a very long time in the entertainment industry. The Big 12 straight up owns the TV rights to UT and OU until 2025. No one is contesting it.

What’s complicated is what financial number it will take for the Big 12 to allow UT and OU to extricate itself from that GOR (if that number even exists). That’s something that’s not defined in the contract, so we really don’t know what that number will be.

There will certainly be lawsuits, but this honestly isn’t a legal interpretation issue at the core. It’s a financial one.

I would imagine that the argument made by TX and OU should they leave the Big 12 isn't that the GOR as a whole is unenforceable, but just the clause in the bylaws that says if you leave, you are no longer entitled to a share of media money even though we retain your media rights.

To my layman self, that would seem reasonable only if, as a result of the school leaving the conference, the conference is no longer getting paid by the media company for that school's rights. E.g., if Texas leaves the Big 12 for the SEC, and FOX is no longer able to broadcast and make money from Texas games, and therefore prorates downward the money it pays the Big 12. In that case, TX is no longer providing games to the Big 12 and its media partners for sale, so obviously should not continue to get paid by the Big 12 or its media partners for its media rights.

But so long as a now-in-the-SEC Texas's media rights remain with the Big 12, and through them their media partners, FOX and ESPN, such that the Big 12 is receiving the full amount of money needed to pay not only the L8 their contracted amount of money but also Texas, then there is no valid ground for not paying Texas their share as well. Withholding that would be unjustifiable. IMO.

In effect, as long as FOX and ESPN still retain the rights to TX and OU home games while they are in the SEC, the GOR really hasn't been broken. The Big 12 still owns the fruits of those rights via the deal with FOX and ESPN. The only issue is the validity of the bylaws clause that says, for no apparent (IMO) justifiable reason, since they are now in the SEC, they are not entitled to the fruits of those rights, even though they are "laboring" for them by providing the games.

At that point, the way I see it, TX and OU would be receiving no consideration, the bylaw contemplates that they continue to provide valuable assets to the Big 12, their home games, yet receive literally nothing in return.

(08-12-2021 11:21 PM)BruceMcF Wrote:  

(08-11-2021 10:28 AM)johnbragg Wrote:  

(08-11-2021 10:00 AM)quo vadis Wrote:  That's not unprecedented, e.g., IIRC, when Navy joined the AAC, they had an existing TV deal with CBS, so CBS remained their broadcast partner, separate from the rest of the AAC and their ESPN deal, for the first few years of their membership.

That's not the same. CBS paid Navy to televise their games. Under the text of the Grant of Rights, OU and UT can join the SEC, they just won't get paid for their TV rights.

They've gotten paid ... conference distributions from the start of the grant of rights until the date they inform the conference they are going to leave, or through the end of the 2024/2025 athletic years, for their home game rights from the start of the grant of rights until the end of June, 2025, as agreed.

They are not granting the rights annually and getting paid annually, they granted their rights for a block of time, in return for revenue sharing on agreed terms.

Again, IANDL, but grants of rights are used all over the economy. There are going to be dozens of precedents on this, if not hundreds. And a Federal judge is not likely to ignore precedent because of the local political clout of some school's alumni base.

I agree that would be the Big 12's argument, but IMO a judge would see through the first part of that (the part about allegedly not being paid annually), and then rule that the second part, while true, contains an unenforceable agreed-on term.

IMO, it would be easy to show that (a) regarding football, the schools are expected to provide games on an annual basis, as the sport is played in 'seasons' that coincide with the calendar each year, and (b) since payments are made annually by the media companies, and revenue shares based on those media payments are also made annually by the conference, that © all of this is being done on an annual basis, where there is an obvious tie-in between playing your games in year X-Y (e.g. 2021-2022) and getting paid at the end of year X-Y. They are clearly linked. Beyond the overwhelming circumstantial evidence would be also the fact that surely, if the Big 12 itself ceased playing football in say 2022, dropped the sport entirely and never resumed it for the life of the GOR, FOX and ESPN would surely refuse to pay *it* the prorated value of football for those remaining three years. Finally, IIRC, it is frequently mentioned that these contracts have escalator clauses which pay a little bit more every year of the deal, again contemplating that there is link between play in one year and payment in that year.

As for the second, the defense for the bylaw that says if a team leaves the conference, the conference continues to own its media rights until the expiration of the GOR, but the school is not entitled to be paid any revenue arising from the exploitation of those ongoing rights would be that Texas agreed to it. But IIRC, many clauses in contracts that have been agreed to have nevertheless been thrown out by a court, often because of a lack of consideration. IMO, expecting a school to continue to provide services - its games to the conference's media partner - while not getting paid anything for those games - is the definition of 'lack of consideration'.

And as far as I can tell, a court ruling that way would not undermine the general principle of a GOR, would not e.g. suddenly mean that any movie company could start making Spiderman movies in defiance of Sony's exclusive GOR from Marvel, etc. Or if it does mean that, it hasn't been explained to me in a way I understand.

But what do I know? Probably nothing.

(08-13-2021 06:51 AM)quo vadis Wrote:  

(08-12-2021 11:00 PM)Frank the Tank Wrote:  

(08-12-2021 02:17 PM)johnbragg Wrote:  

(08-12-2021 09:59 AM)Frank the Tank Wrote:  

(08-11-2021 12:22 PM)XLance Wrote:  You should have stayed at a Holiday Inn Express, Judge Judy can only take you so far.

As a lawyer, I would strongly disagree that the Grant of Rights doesn't provide valuable consideration.

The consideration here is that the Grant of Rights allowed for the Big 12 to go to market to obtain maximum value for their media markets.

The GOR is a contract between Oklahoma and the Big 12, or between the 10 Big 12 members. If Oklahoma is not a Big 12 member, and not collecting Big 12 media revenue, how is a bigger Big 12 TV contract "valuable consideration"??

That argument is illusory.

The consideration that OU received was at the time that the GOR Agreement was executed and that will generally be judged as sufficient. (I’d be surprised if the contract didn’t state upfront, “For good and valuable consideration, the parties agree…”) Even if you were to argue that continuing consideration is necessary, OU can’t subsequently breach a contract (or the Big 12 by-laws, as the case may be) and then turn around and argue that the GOR Agreement is unenforceable where they’re now no longer receiving consideration *because* of their own breach. No reasonable judge is going to buy that argument - there’s a public policy interest to not allow a party to breach one contract that would then allow that same party to try to call another agreement in unenforceable due to that party’s breach.

This is a weird case where a lot of fans seem to want to believe that the GOR Agreement *legal* issues are complicated, but they truly aren’t. It’s a super simple contract consisting of maybe a couple of pages. As adcorbett noted above, GOR Agreements have been common and enforceable for a very long time in the entertainment industry. The Big 12 straight up owns the TV rights to UT and OU until 2025. No one is contesting it.

What’s complicated is what financial number it will take for the Big 12 to allow UT and OU to extricate itself from that GOR (if that number even exists). That’s something that’s not defined in the contract, so we really don’t know what that number will be.

There will certainly be lawsuits, but this honestly isn’t a legal interpretation issue at the core. It’s a financial one.

I would imagine that the argument made by TX and OU should they leave the Big 12 isn't that the GOR as a whole is unenforceable, but just the clause in the bylaws that says if you leave, you are no longer entitled to a share of media money even though we retain your media rights.

To my layman self, that would seem reasonable only if, as a result of the school leaving the conference, the conference is no longer getting paid by the media company for that school's rights. E.g., if Texas leaves the Big 12 for the SEC, and FOX is no longer able to broadcast and make money from Texas games, and therefore prorates downward the money it pays the Big 12. In that case, TX is no longer providing games to the Big 12 and its media partners for sale, so obviously should not continue to get paid by the Big 12 or its media partners for its media rights.

But so long as a now-in-the-SEC Texas's media rights remain with the Big 12, and through them their media partners, FOX and ESPN, such that the Big 12 is receiving the full amount of money needed to pay not only the L8 their contracted amount of money but also Texas, then there is no valid ground for not paying Texas their share as well. Withholding that would be unjustifiable. IMO.

In effect, as long as FOX and ESPN still retain the rights to TX and OU home games while they are in the SEC, the GOR really hasn't been broken. The Big 12 still owns the fruits of those rights via the deal with FOX and ESPN. The only issue is the validity of the bylaws clause that says, for no apparent (IMO) justifiable reason, since they are now in the SEC, they are not entitled to the fruits of those rights, even though they are "laboring" for them by providing the games.

At that point, the way I see it, TX and OU would be receiving no consideration, the bylaw contemplates that they continue to provide valuable assets to the Big 12, their home games, yet receive literally nothing in return.

Here's the basic thing: the GOR Agreement is intentionally separate from the agreement to actually distribute revenue in the conference by-laws. No one should conflate the two: the GOR Agreement deals with the media rights grant, while the by-laws determine the conditions by which the Big 12 members are entitled to receive revenue. They are two wholly separate legal agreements.

What the Big 12 will argue is that UT and OU breached the conference by-laws with its consorting with the SEC and, therefore, the Big 12 is entitled to withhold revenue distributions from those schools. Whether there is a GOR Agreement in place or not legitimately doesn't matter on that front.

The Big 12 has long held the power to do this for breaches of the by-laws: for instance, they withheld 25% of conference revenue from Baylor in 2017-18 in connection with their sexual assault scandal. The fact that there was a separate GOR Agreement was irrelevant and Baylor couldn't claim that they were inequitably treated by the Big 12 being able to continue to make money off of Baylor broadcasts. The whole point is that the breach was with respect to the by-laws. The GOR Agreement doesn't even come into play there (just as a school leaving a league without a GOR Agreement at all would expect the same treatment of the league withholding their revenue due to a breach of that league's by-laws).

There's no way around it: UT and OU are going to have to pay a lot of money if they want to leave early and, even then, the Big 12 may still very well be able to broadcast the UT/OU home games until 2025 even if they're in the SEC without paying a dime to UT/OU. There's no magic poison pill for UT/OU here that I see. That's why they have been so careful to have everything that they state publicly to refer to leaving in 2025 (and why the SEC invite is for the 2025 season).

Once again, this really isn't a *legal* issue. The contracts seem pretty clear to me: (1) the GOR Agreement is an unambiguous grant of media rights to the conference for the period of time in that GOR Agreement and (2) *every* league has in its by-laws that they're going to withhold all revenue from a school that announces its intentions to leave a conference regardless of whether there's a GOR agreement.

This is all a financial issue about what it's worth to UT/OU to leave the Big 12 earlier than 2025. The more that I think about it, this may be the case that they get a reduced share of the SEC revenue until 2025 (as their home games would still be owned by the Big 12 under the GOR Agreement) along with paying the Big 12 an exit fee to compensate for their breach of the by-laws.

(08-12-2021 11:34 PM)BruceMcF Wrote:  

(08-11-2021 10:40 AM)UofMstateU Wrote:  ... As for the breach of contract (ie GOR) this could be correct. The damages caused by breach of contract is limited to just that, the actual damages. ...

What breach? The only thing that Texas and Oklahoma can do to get the rights back early without the agreement of the R8 is to take it to court and get a Federal judge to agree that there is a legal flaw in the GOR agreement that releases them from it and returns their rights to them.

But that is not a breach, that is a court determining that the contract is null and void.

Is it imagined that they can just give permission to the SEC to air their home games and the SEC bundle that permission into their own contract with ESPN and ESPN air the home games under that contract ... without anybody in the Big12 noticing before airtime?

Because the game would actually have to go to air in violation of the GOR to breach the agreement. An effort to do so and an injunction forbidding ESPN from airing that game under those auspices would not be a breach, it would be preventing a breach.

A lot of us learned a lot about breaches of contracts during the whole messy fall of the old Big East from grace ... but we don't get to transfer that over to another legal question unless a breach occurs.

____________

(08-12-2021 11:00 PM)Frank the Tank Wrote:  The consideration that OU received was at the time that the GOR Agreement was executed and that will generally be judged as sufficient. (I’d be surprised if the contract didn’t state upfront, “For good and valuable consideration, the parties agree…”) Even if you were to argue that continuing consideration is necessary, OU can’t subsequently breach a contract (or the Big 12 by-laws, as the case may be) and then turn around and argue that the GOR Agreement is unenforceable where they’re now no longer receiving consideration *because* of their own breach. No reasonable judge is going to buy that argument - there’s a public policy interest to not allow a party to breach one contract that would then allow that same party to try to call another agreement in unenforceable due to that party’s breach.

Indeed, it would not be surprising if one of the more aspects of having all schools agree to certain limits on their behavior ... that cannot really be enforced on a school that is leaving ... is to undermine the basis for challenges to the GOR by schools which will have certainly breached those limits as part of the process of negotiating an agreement to accept them if they should "apply to join" the raiding conference.

In breach of contract, the parties are made whole for damages. Why should the remainder get more than their actual damages as they would certainly if they withheld for 4 years and continued to get the full payments from Fox and ESPN?

(08-12-2021 11:34 PM)BruceMcF Wrote:  

(08-11-2021 10:40 AM)UofMstateU Wrote:  ... As for the breach of contract (ie GOR) this could be correct. The damages caused by breach of contract is limited to just that, the actual damages. ...

What breach? The only thing that Texas and Oklahoma can do to get the rights back early without the agreement of the R8 is to take it to court and get a Federal judge to agree that there is a legal flaw in the GOR agreement that releases them from it and returns their rights to them.

But that is not a breach, that is a court determining that the contract is null and void.

Is it imagined that they can just give permission to the SEC to air their home games and the SEC bundle that permission into their own contract with ESPN and ESPN air the home games under that contract ... without anybody in the Big12 noticing before airtime?

Because the game would actually have to go to air in violation of the GOR to breach the agreement. An effort to do so and an injunction forbidding ESPN from airing that game under those auspices would not be a breach, it would be preventing a breach.

A lot of us learned a lot about breaches of contracts during the whole messy fall of the old Big East from grace ... but we don't get to transfer that over to another legal question unless a breach occurs.

____________

(08-12-2021 11:00 PM)Frank the Tank Wrote:  The consideration that OU received was at the time that the GOR Agreement was executed and that will generally be judged as sufficient. (I’d be surprised if the contract didn’t state upfront, “For good and valuable consideration, the parties agree…”) Even if you were to argue that continuing consideration is necessary, OU can’t subsequently breach a contract (or the Big 12 by-laws, as the case may be) and then turn around and argue that the GOR Agreement is unenforceable where they’re now no longer receiving consideration *because* of their own breach. No reasonable judge is going to buy that argument - there’s a public policy interest to not allow a party to breach one contract that would then allow that same party to try to call another agreement in unenforceable due to that party’s breach.

Indeed, it would not be surprising if one of the more aspects of having all schools agree to certain limits on their behavior ... that cannot really be enforced on a school that is leaving ... is to undermine the basis for challenges to the GOR by schools which will have certainly breached those limits as part of the process of negotiating an agreement to accept them if they should "apply to join" the raiding conference.

The true purpose is to obtain the "consideration," the contract amount they get from having a long term deal to offer ESPN and Fox. It is not to constrain "behavior."

If they get all their money under the contract, it does not undermine the GOR. It will have fulfilled its purpose. There would be no damage to the other party.

(08-12-2021 11:00 PM)Frank the Tank Wrote:  

(08-12-2021 02:17 PM)johnbragg Wrote:  

(08-12-2021 09:59 AM)Frank the Tank Wrote:  

(08-11-2021 12:22 PM)XLance Wrote:  

(08-11-2021 11:11 AM)johnbragg Wrote:  First, from watching Judge Judy 20 years ago. A contract is only valid if both sides get a valuable consideration. The Grant-of-Rights doesn't give Texas or Oklahoma any valuable consideration, as far as I can tell.

Rocket Lawyer: What is Consideration

Second, I learned from the Big East-West Virginia lawsuits that, just because it was agreed to in a contract, doesn't mean it will stand up in court.

You should have stayed at a Holiday Inn Express, Judge Judy can only take you so far.

As a lawyer, I would strongly disagree that the Grant of Rights doesn't provide valuable consideration.

The consideration here is that the Grant of Rights allowed for the Big 12 to go to market to obtain maximum value for their media markets.

The GOR is a contract between Oklahoma and the Big 12, or between the 10 Big 12 members. If Oklahoma is not a Big 12 member, and not collecting Big 12 media revenue, how is a bigger Big 12 TV contract "valuable consideration"??

That argument is illusory.

The consideration that OU received was at the time that the GOR Agreement was executed and that will generally be judged as sufficient. (I’d be surprised if the contract didn’t state upfront, “For good and valuable consideration, the parties agree…”)

What WAS the consideration though? Allegedly, it was a condition of the ESPN and Fox contracts. I find that hard to believe, because it's not like ESPN and/or Fox won't sign media deals without Grants of Rights. That seems like a thinly-veiled favor by ESPN and Fox to the Big 12, to "demand" something that's not very important to ESPN/Fox, but very important to the Big 12.

Thinking over the history,
Spring 2011. Fox signs the Big 12 Tier 2 rights for $90M a year, (plus $60M ESPN Tier 1) 13 year duration, so through 2025?
Fall 2011. Big 12 signs a Grant of Rights through 2019 after Missouri and A&M leave.
2012. ESPN, Fox, Big 12 agree to: extend the ESPN deal, shuffle the Fox and ESPN rights (more games for ESPN, better games for Fox), extend Big 12 GOR. Total Big 12 TV rights increase to $200M/year.
2016. Fox, ESPN agree to pay Big 12 money to drop the "pro rata" expansion clause.

2021, Big 12 conference distributions are vaguely rumored to be in the $40M range. (Escalator clauses in the TV contracts, CFP money, bowls, tournament credits, CCG gate receipts, etc etc).

So at the maximum, the Big 12 GOR is worth $50M a year. That's if you ignore the hot market in sports TV rights between spring 2011 and fall 2012 (FS1 coming in the pipeline as a "baby ESPN" project, SEC Network taking some inventory from ESPN, ESPN also trying to beef up ESPN-U for subscription dollars, NBC/Comcast hovering as a big-wallet challenger). Between the 2011 and 2012 Fox-Big 12 contracts, FS1 went from being an intriguing possibilty to a definite plan, Versus became NBC-SN.

A contemporary comparison is the ACC contract, which went from $155M/year (2010) to $240M/year (2012) by adding Syracuse and Pitt and no Grant of Rights (until later). On the other hand, the Big 12 lost Texas A&M and Missouri, gaining TCU and West Virginia.

2013 Big 12 Grant of Rights PDF, linked by Frank The Tank's blog way back when

Quote:WHEREAS, as a condition to the agreement of ESPN/ABC and FOX (collectively the “Telecast Partners”) to execute the Telecast Rights Agreements, each of the Member Institutions is required to, and desires to, irrevocably grant to the Conference, and the Conference desires to accept from each of the Member Institutions, certain rights granted by the Conference to the Telecast Partners pursuant to the Telecast Rights Agreements, on the terms and conditions of this Agreement;

Quote:Even if you were to argue that continuing consideration is necessary, OU can’t subsequently breach a contract (or the Big 12 by-laws, as the case may be) and then turn around and argue that the GOR Agreement is unenforceable where they’re now no longer receiving consideration *because* of their own breach. No reasonable judge is going to buy that argument - there’s a public policy interest to not allow a party to breach one contract that would then allow that same party to try to call another agreement in unenforceable due to that party’s breach.

This is a weird case where a lot of fans seem to want to believe that the GOR Agreement *legal* issues are complicated, but they truly aren’t.

It's not so much complicated, as uncertain. It's a single, yes-no question "Can they do that?"

Quote:It’s a super simple contract consisting of maybe a couple of pages. As adcorbett noted above, GOR Agreements have been common and enforceable for a very long time in the entertainment industry. The Big 12 straight up owns the TV rights to UT and OU until 2025. No one is contesting it.

What’s complicated is what financial number it will take for the Big 12 to allow UT and OU to extricate itself from that GOR (if that number even exists). That’s something that’s not defined in the contract, so we really don’t know what that number will be.

Well, the normal buyout in the Big 12 bylaws is 2 years of conference revenue, so about $80M. The wildcard is the other 2 years of conference revenue. By the text of the conference bylaws, the Big 12 can say that Texas and Oklahoma are withdrawing as of June 30, 2023, and therefore don't get another dime from the Big 12. That would put the "exit fee" at around $160M each, but half of that isn't technically an exit fee, it's that UT and OU are no longer conference members getting a slice of the pie.

While the Big 12 still owns and profits from the UT and OU TV rights for 2023-24 and 2024-25.

That's the Big 12 maximalist position, based on the text of their bylaws.

I expect that Texas and Oklahoma will push to lose only 2 of the 4 years of conference revenue, one way or another