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MEGA Conference Realignment and lawsuits Megathread(Its still personal)

BioCane said:
I won't be shocked if these 2 get invites/lifelines to the ACC, ala WVU to the BigXII years ago. It won't be cheap travel for those 2 schools to come east for everything, but if the choice is either that or go completely irrelevant in the MWC at 4M a year, they'll take whatever disbursement from the ACC and happily eat the traveling fees while they hope for something to shake out with the B1G down the road.
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Or call Big 12 one last time
 
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Badbart43 said:
Excellent article....spells it out perfectly...

MSN

www.msn.com
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Need the CIS attorneys to weigh in @TheOriginalCane

Option 1: Leave the ACC and Fight the Grant of Media Rights​

The most obvious is to leave and fight the consequences, and there are two major consequences. In addition to relinquishing its media rights, a school will owe an exit fee amounting to three times its annual revenue (an estimated $120 million). So money solves the later problem, but what about the media rights? There’s some interesting and viable theories as to how to clip that thorn.


The ACC Probably Can’t, and Won’t, Stop Exiting Members From Broadcasting Their Sports Teams​

To explain the issues, let’s play out a hypothetical. Say Miami leaves the ACC and joins the SEC. I say the SEC because it’s aligning itself with ESPN, which is also the principal media partner for the ACC (hence the end of the ACC/Big Ten challenge and the dawn of the ACC/SEC challenge for basketball). So ESPN doesn’t care which conference Miami is in because it’s broadcasting Miami games either way. In fact, ESPN might prefer Miami in the SEC because ESPN would rather see SEC teams in Coral Gables than ACC teams.

(On a side note...take a moment to appreciate how much influence the broadcasters hold in all this. I’m confident that Fox, ESPN, CBS, etc. would prefer conference consolidation amongst the top schools. Collect the cream and leave the rest for Apple and the CW)

But anyways, the ACC does care because it owns Miami’s media rights. So the conference sues and asks a court to enjoin ESPN from broadcasting Miami home football games. Awkward and unlikely since ESPN is ACC’s media partner.

Even if the ACC files a lawsuit, keeping Miami games off the air would be difficult. The ACC would have to get an injunction, which is a court order that forces someone to do something (or not do something). This is different than monetary damages as compensation for some harm caused (like money to fix your car after getting hit in an accident). Injunctions are hard to get. We value our freedom in America, so if the government is going to force you to do something against your will it better be for a good reason. Court’s have found that good reasons arise when an “irreparable harm” would occur that money damages cannot compensate. An example of “irreparable harm” might be reputational damage caused by defaming someone or selling shoddy counterfeit product, so a court could enjoin you from further defaming someone or selling any more counterfeit product.

In this situation I don’t see the irreparable harm - the ACC could be compensated with money it might otherwise expected had Miami stayed in the ACC (this form of damages is akin to “lost profits” or possibly a “reasonable royalty” anticipated for licensing media rights). So, I don’t think the ACC could sue to keep a departed Miami from broadcasting their teams despite “owning” the school’s media rights. Plus in the case of the SEC, as stated before I don't think the ACC would sue to block ESPN from showing Hurricanes games. That's tantamount to biting the hand that feeds you.


But the ACC will Expect Nine Figures of Money, and There’s Options for Raising that Money​

Even if the ACC can’t force a departing Miami to not air its football games, Miami will still owe the estimated $120 million exit fee plus some sort of damages for breaking the media rights deal. That could reasonably be Miami’s expected revenue share had it stayed, or about $30 million annually. My handy-dandy calculator informs me that’s a $390 million dollar penalty for exiting 13 years early. All together, the fair price tag to leave the ACC thirteen years early could be half a billion dollars. Yikes.

Some might argue that the price tag is even higher. For example, in debating the situation, Dan Wetzel of Yahoo Sports argued that FSU “could sign a $100 million a game deal, and all $100 million would go to the ACC. They don’t own their rights.”

That legal outcome is a risk, but I don’t think it’s likely. For starters, the remedy Wetzel is referencing is either “disgorgement of profits” or “specific performance,” either of which are equitable remedies (in the same category as an injunction) that are not automatic and subject to equitable defenses like unclean hands. Allow me to translate that last sentence to English - if the ACC sued for Miami’s media revenue in the SEC, Miami could argue that the ACC is undeserving of all its revenue because the conference was woefully inept in how it was handling Miami’s media rights in the ACC. Sounds at least plausible to me.

Also, in reading the Media Rights Agreement, the rights granted were “all rights necessary for the Conference to perform the contractual obligations of the Conference expressly set forth in the ESPN Agreement.” Everything about the Agreement is tied to the ACC’s ability to hold up its end of the bargain with ESPN. Naturally, I would expect the ACC’s damages would be the effect that Miami leaving the conference has on the ACC and its agreement with ESPN. That could be $30-40 million a year in lost revenue for the ACC. Or, it's arguably zero dollars if ESPN doesn’t change its agreement and the remaining schools actually make more money by splitting the same pot between fewer members. Either way, the damages are probably not whatever Miami or FSU is making in another league.

So, Miami probably would not owe all its revenue from a new league, but it might owe tens of millions of dollars annually. It’s a steep price tag, but one that at least FSU thinks is worth it. ACC schools are presently $30-50 million a year behind their Big Ten and SEC colleagues. That gap is likely going to increase as the Big Ten and SEC continue to add schools and their media rights are due to be renewed in 2030 and 2034, respectively. By 2036 Miami could easily be over $100 million a year behind those conferences' members. So it makes sense that FSU is working with JPMorgan Chase to raise capital for an ACC exit.

Another major key holder here is the broadcast partners. If ESPN really wants Miami in the SEC, it could agree to indemnify Miami and/or tell the ACC that it will keep paying the same amount to the ACC despite Miami’s absence. Similar story for Fox and the Big Ten. If the ACC gets the same amount of money despite the school’s departure, then what’s the harm? Everything is negotiable!

Point being is that this is a money problem and there are solutions. Not necessarily easy solutions, but solutions exist.
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Tony4Miami said:
Or call Big 12 one last time
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1) Don't underestimate the desire of school presidents to prefer to associate with other academic institutions.
2) ESPN has lost direct access to all major west coast programs, Stanford and Cal are it. They will also be able to get the rest of the ACC big hitters on that late timeslot. And it'll be a boost for the ACC network to get into Cali. I can't seen ESPN not making it worth the ACC's while to pick these 2 schools up.
3) The ACC distributed I think it was 42M last year to its members institutions. They're right behind the BigXII on media rights, so the ACC will be eager to eclipse that to be the undisputed #3 conference. ESPN likewise is going to be desperate to keep FOX and the B1G at bay, so anything they can do to justify giving the ACC more money they're going to push for I imagine.
 
JeddTheFisch said:
I must be missing something re: the Bigly 12. What card do they hold?
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If B1G doesn't want Cal & Stanford at partial shares then let the Big 12 have them not the ******* ACC

How many votes for admission needed?
 
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BioCane said:
1) Don't underestimate the desire of school presidents to prefer to associate with other academic institutions.
2) ESPN has lost direct access to all major west coast programs, Stanford and Cal are it. They will also be able to get the rest of the ACC big hitters on that late timeslot. And it'll be a boost for the ACC network to get into Cali. I can't seen ESPN not making it worth the ACC's while to pick these 2 schools up.
3) The ACC distributed I think it was 42M last year to its members institutions. They're right behind the BigXII on media rights, so the ACC will be eager to eclipse that to be the undisputed #3 conference. ESPN likewise is going to be desperate to keep FOX and the B1G at bay, so anything they can do to justify giving the ACC more money they're going to push for I imagine.
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sounds like a deseration move that is not going to do anything to move the needle in the direction of keeping the ACC together.
 
BioCane said:
1) Don't underestimate the desire of school presidents to prefer to associate with other academic institutions.
2) ESPN has lost direct access to all major west coast programs, Stanford and Cal are it. They will also be able to get the rest of the ACC big hitters on that late timeslot. And it'll be a boost for the ACC network to get into Cali. I can't seen ESPN not making it worth the ACC's while to pick these 2 schools up.
3) The ACC distributed I think it was 42M last year to its members institutions. They're right behind the BigXII on media rights, so the ACC will be eager to eclipse that to be the undisputed #3 conference. ESPN likewise is going to be desperate to keep FOX and the B1G at bay, so anything they can do to justify giving the ACC more money they're going to push for I imagine.
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Very true about Big 12 and academics

I still think ACC should say 🖕
 
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Sgt_Cane said:
One trend that began in the early 2000s and continues today is the migration of south florida black populations moving to Atlanta. Something to consider.
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I see it nearly every day. Went to a restaurant near Piedmont Park yesterday, was wearing my new UM Boosts. A guy noticed and said that Miami was his hometown. This has happened to me repeatedly.
 
Fzac75 said:
You have stated this twice now, where in the **** are you getting this $420 mil figure?
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$120M exit fee
$300M estimated value of remaining grant of rights

These amounts are listed in virtually every single article about cost to exit ACC
 
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Here's my best case scenario:

ACC ESPN ponies up big $$$ to keep everyone happy.

Adding Stanford & Cal is a no brainer. Great academics and a classic rivalry. ACC gets west coast exposure.

Add SMU & Memphis & to get into Tennessee & Texas & call it a day.
 
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