Conference Realignment: What Next?

[adoraz]

A few of you are turning ‘wishful thinking’ into an art form.
.

Hows your “8 Years of Wishful Thinking” artwork going?

Imagine being so triggered that a fan on a different conference's message board suggesting that a team might join their conference many years later angers them.

I'm assuming he didn't read past the first sentence, because I clearly stated that KU won't join as long as they are part of a Power 5 conference. If they find themselves in an AAC situation like UConn, which is very possible, then they absolutely may join. I'd bet that FF said similar statements about UConn joining in the past, but I don't remember.

He's been trying to "get" me for a couple years now, the same way he's trying to get his team into the Big East. Neither will ever happen.

[gtmoBlue]

When OU & UT wind up leaving earlier than 2025...and pay the exit fees, the TV folks will go to work.
The B12 TV rights pkg will be reevaluated and will be "right-sized" downward, drastically. Also given
the reduced demand for the remaining teams - if the B12 survives via acquisiton or merger, the new
contract in 2025 will be substantially (at least 50%) lower than the current contract. Life in the big city
for the B12 without marquee programs.

[ArmyVet]

Plenty of discussion that the PAC12, B1G, and ACC are discussing an alliance. This would mean the Big 12 is left without a seat at the big boy table for college football. Kansas would have the option of joining the Mountain West or AAC in all sports or trying to figure out if a Big East option exists with independent football.

Reports are that this is a done deal and will be primarily for scheduling and to prevent SEC from having too much power in the football decision making.

[Django]

The Big 12 is no longer a power football conference and their espn payouts are going to be cut in half. It’s going to be painful for all those schools to support major football with a fraction of the budgets of the Power 2.... that’s right, the B1G, PAC and ACC are one against the SEC. power two. Ho hum.

[adoraz]

Will the Big XII's TV contract be immediately changed? It runs through 2025, plus Texas and OU as of now aren't leaving before then.

I'm aware of course that the next contract will have greatly reduced payouts, but I'm wondering about the current one.

[Omaha1]

Will the Big XII's TV contract be immediately changed? It runs through 2025, plus Texas and OU as of now aren't leaving before then.

I'm aware of course that the next contract will have greatly reduced payouts, but I'm wondering about the current one.

Until they actually leave, the contract is solid. Big paychecks for the remaining schools for up to 4 years, but then a crater. Hopefully they budget accordingly.

[Xudash]

Found this interesting:

MYTH OF THE BIG 12’S GRANT OF RIGHTS

9 years ago

By Jason Hutzler

That a grant of rights prevents conferences from being raided is a myth. The Big 12 is still vulnerable because Texas and Oklahoma are still in play to be gobbled up in conference realignment. To give you some background, I am a contract lawyer in Phoenix. I litigate a lot of contracts. Some that have liquidated damages clauses and some that don’t.

At the end of the day, the liquidated damages clause is essentially an estimate by the parties of the expectant damages in the case of a breach. The liquidated damage clause cannot be used to punish the breaching party, but is used to indemnify the non-breaching party. An exit fee provision is a liquidated damage clause. Because it cannot be used to punish, they are often negotiated down from the stated fee.

Contracts that don’t have a liquidated damage clause have two remedies available to the non-breaching party; specific performance and compensatory damages. Contract law enforces the expectancy interests between contracting parties, providing redress for parties who fail to receive the benefit of their bargain. However, courts rarely use specific performance as a remedy, especially in an instance when compensatory damages are easily calculated.

A grant of rights is a contract between each individual school and the conference pledging the school’s media rights to conference for a number of year. Like all contracts, it can be broken. School X, member of Conference A who has granted its media rights to Conference A, thinks it can make more money in Conference B. So School X leaves Conference A for Conference B placing its media rights in Conference B. Now School X’s games will be distributed by both confernces. At this point School X has breached the grant of rights agreement, Conference A will sue School X over the media rights under the grant of rights agreement.

Conference A would love to force School X to leave its media rights with Conference A, requesting a court require specific performance of the grant of rights. This is the threat of the grant of rights, the tie that binds so to speak. If a court were to elect the specific performance remedy then School X of course provides no value to Conference B. However, because specific performance is often difficult to enforce and requires more of the court’s resources most courts rarely ever use this remedy.

Courts are even less inclined to use it when there is an easy way to calculate damages. The resulting damages from a breach of grant of rights are easily calcualable. There is no reason to believe that a court would require specific performance in a suit over a breach of a grant of rights.

The court is going to look at the value and duration of the media rights deal between Conference A and the networks. Then it will look at the duration of the grant of rights by School X to Conference A. Is the media rights deal worth less for the remainder of the grant of rights. If it is then this is the measure of damages School X must pay Conference A. My premise is that the networks have never reduced their payout to an existing contract, and there is no evidence they will going forward.

In 2003, the Big East is raided for two of its name brand schools, and a regionally significant school. The Big East added some lesser brands, and their media partners did not reduce their ongoing media deal. 2010, the Big 12 lost 2 schools in Colorado and Nebraska, did not replace those schools, and the Big 12 lost a significant amount of content (1/6th) in football and basketball. The Big 12’s media partners did not reduce the payout on existing contracts but actually negotiated for more money on an expiring one. 2011, Texas A&M and Missouri left, the Big 12 replaced them with less valuable TV properties in TCU and WVU, and neither ESPN or FOX required a reduction in the payout to the Big 12. 2012, Maryland leaves the ACC for the Big 10, ACC replaces them with a less valuable media property. Not a single word is mentioned about a reduced payout for the ACC.

Networks, and one specifically, won’t reduce the amount they pay to the conferences because it would violate their fiduciary duties to the conferences. Because one network (ESPN) has a hand in every league’s media deal (except new Big East if it even exists) it can’t in good faith pay one league more for raiding one league, then reducing its payout to league that was raided.

Because there is no evidence there would be a reduced payout to the league, the damages calculation is simple. The media deal for Conference A remains unchanged despite School X leaving, therefore there would be no damages for breach of grant of rights. The Big 12 grant of rights runs concurrently to media deals. So unless the networks change their strategy and go against precedent and start reducing the payouts to leagues, the only thing that binds these schools is money. Once the SEC starts its network there will be a new conference shuffle, and the Big 12 is still vulnerable.


Written by Clay Travis
Clay Travis is an author, radio show host, lawyer, TV analyst, and the founder and lead writer of Outkick, forme...

[gtmoBlue]

Great read Xudash. Yes, very interesting. So they (OU/UT) could leave tomorrow and no blood, no foul. hmmm.

[kayako]

Will the Big XII's TV contract be immediately changed? It runs through 2025, plus Texas and OU as of now aren't leaving before then.

I'm aware of course that the next contract will have greatly reduced payouts, but I'm wondering about the current one.

Until they actually leave, the contract is solid. Big paychecks for the remaining schools for up to 4 years, but then a crater. Hopefully they budget accordingly.

Big checks either way with reasonable exit fees and greater share of tournament credits. Their budget will be solid for a decade, imo.

[Fieldhouse Flyer]

Found this interesting:

MYTH OF THE BIG 12’S GRANT OF RIGHTS

9 years ago

By Jason Hutzler

That a grant of rights prevents conferences from being raided is a myth. The Big 12 is still vulnerable because Texas and Oklahoma are still in play to be gobbled up in conference realignment. To give you some background, I am a contract lawyer in Phoenix. I litigate a lot of contracts. Some that have liquidated damages clauses and some that don’t.

At the end of the day, the liquidated damages clause is essentially an estimate by the parties of the expectant damages in the case of a breach. The liquidated damage clause cannot be used to punish the breaching party, but is used to indemnify the non-breaching party. An exit fee provision is a liquidated damage clause. Because it cannot be used to punish, they are often negotiated down from the stated fee.

Contracts that don’t have a liquidated damage clause have two remedies available to the non-breaching party; specific performance and compensatory damages. Contract law enforces the expectancy interests between contracting parties, providing redress for parties who fail to receive the benefit of their bargain. However, courts rarely use specific performance as a remedy, especially in an instance when compensatory damages are easily calculated.

A grant of rights is a contract between each individual school and the conference pledging the school’s media rights to conference for a number of year. Like all contracts, it can be broken. School X, member of Conference A who has granted its media rights to Conference A, thinks it can make more money in Conference B. So School X leaves Conference A for Conference B placing its media rights in Conference B. Now School X’s games will be distributed by both conferences. At this point School X has breached the grant of rights agreement, Conference A will sue School X over the media rights under the grant of rights agreement.

Conference A would love to force School X to leave its media rights with Conference A, requesting a court require specific performance of the grant of rights. This is the threat of the grant of rights, the tie that binds so to speak. If a court were to elect the specific performance remedy then School X of course provides no value to Conference B. However, because specific performance is often difficult to enforce and requires more of the court’s resources most courts rarely ever use this remedy.

Courts are even less inclined to use it when there is an easy way to calculate damages. The resulting damages from a breach of grant of rights are easily calcualable. There is no reason to believe that a court would require specific performance in a suit over a breach of a grant of rights.

The court is going to look at the value and duration of the media rights deal between Conference A and the networks. Then it will look at the duration of the grant of rights by School X to Conference A. Is the media rights deal worth less for the remainder of the grant of rights. If it is then this is the measure of damages School X must pay Conference A. My premise is that the networks have never reduced their payout to an existing contract, and there is no evidence they will going forward.

In 2003, the Big East is raided for two of its name brand schools, and a regionally significant school. The Big East added some lesser brands, and their media partners did not reduce their ongoing media deal. 2010, the Big 12 lost 2 schools in Colorado and Nebraska, did not replace those schools, and the Big 12 lost a significant amount of content (1/6th) in football and basketball. The Big 12’s media partners did not reduce the payout on existing contracts but actually negotiated for more money on an expiring one. 2011, Texas A&M and Missouri left, the Big 12 replaced them with less valuable TV properties in TCU and WVU, and neither ESPN or FOX required a reduction in the payout to the Big 12. 2012, Maryland leaves the ACC for the Big 10, ACC replaces them with a less valuable media property. Not a single word is mentioned about a reduced payout for the ACC.

Networks, and one specifically, won’t reduce the amount they pay to the conferences because it would violate their fiduciary duties to the conferences. Because one network (ESPN) has a hand in every league’s media deal (except new Big East if it even exists) it can’t in good faith pay one league more for raiding one league, then reducing its payout to league that was raided.

Because there is no evidence there would be a reduced payout to the league, the damages calculation is simple. The media deal for Conference A remains unchanged despite School X leaving, therefore there would be no damages for breach of grant of rights. The Big 12 grant of rights runs concurrently to media deals. So unless the networks change their strategy and go against precedent and start reducing the payouts to leagues, the only thing that binds these schools is money. Once the SEC starts its network there will be a new conference shuffle, and the Big 12 is still vulnerable.

Written by Clay Travis

Clay Travis is an author, radio show host, lawyer, TV analyst, and the founder and lead writer of Outkick, forme...

Excellent and timely post Xudash. Contract Law was my bread and butter for more than 35 years. I now spend considerable time following Catholic college basketball and reminiscing about its good ol’ days – back when college athletics and Contract Law were separate and distinct fields of endeavor. Now the two are inseparably intertwined, to the detriment of both.

MYTH OF THE BIG 12’S GRANT OF RIGHTS - Clay Travis, Outkick – January 3, 2013

Contract - Wikipedia

Breach of Contract – Wikipedia

Specific Performance - Wikipedia

What Is 'Specific Performance' as a Legal Remedy? – FindLaw - January 16, 2018

LIMITATIONS ON THE AVAILABILITY OF SPECIFIC PERFORMANCE - University of Chicago Law Review - ©1950 (13-page .pdf scholarly treatise)

The University of Chicago Law Review is a quarterly journal of legal scholarship. Often cited in Supreme Court and other court opinions, as well as in other scholarly works, it is among the most influential journals in the field. Students have full responsibility for editing and publishing the Law Review; they also contribute original scholarship of their own. The Law Review's editorial board selects all pieces for publication and, with the assistance of staff members, performs substantive and technical edits on each of these pieces prior to publication.

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The present realignment of conferences and schools is just the latest instalment of an ongoing series of events which began in the mid-1950’s, and will continue indefinitely. For more than 2,500 years, there have been self-selected groups of people who have planned, plotted, and schemed to gain an advantage over their rivals. Don’t expect that to change anytime soon.

History of Conference Realignments 1955-1991 – HLOH thread on the Off Topic board

List of NCAA Conferences – Wikipedia . . . . . . . . List of Defunct College Football Conferences - Wikipedia

The following New York Times article has very impressive interactive graphics. Move the cursor over any gray line to identify the school pertaining to that particular gray line. If you then click on a gray line, it turns yellow, and clearly shows the path the school has taken to its conference in 2013.

Tracing the History of NCAA Conferences 1965-2013 – Mike Bostock, Shan Carter, and Kevin Quealy, The New York Times - November 30, 2013

A frenzy of realignment has transformed college athletics: about one in four major football programs has switched conferences since 2010. The effects are only starting to play out as programs build new infrastructure to televise and market their programs, especially in up-and-coming conferences. As conferences have become essential to stay competitive, the number of unaffiliated major schools has declined sharply. Here, how major college football programs have shifted since 1965.

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