(02-10-2013 07:13 AM)mattsarz Wrote:  I'm going off of what the C-USA contract from '05-'10 had. Might not be much different since the Big East contracts were signed during that time (yes, there could be some differences).

There's an offer/reoffer in there.

Here's how it may have worked: Remember that wildass Dennis Dodd story saying that the Big East asked for $300m per year?

http://www.cbssports.com/collegefootball...-from-espn

That was so they could go to the open market and get bidders (see part b, called the Offer). Because the Big East didn't get $300m a year and are considering an offer below that $$ amount, they have to give ESPN an chance to match. Dennis's story notes that this required the Big East to get offer greater than or equal to $300 million a year.

Quote:(a) Negotiating Period. Conference shall negotiate exclusively with ESPN·for a
period of 30 days (the "Negotiating Period") commencing on a date selected by ESPN
(but not later than Aprill, 2010) with respect to the acquisition by ESPN for one or more
years of rights to the package of Events set forth herein. It is of the essence of this
Agreement that Conference offer ESPN the same package of rights set forth in this
Agreement, and, should the parties not reach agreement, that the Conference make the
exact same package of rights available to third paties.

(b) Offer/Reoffer Procedure. If ESPN and Conference have not reached an
agreement by the end of the Negotiating Period, Conference shall make a written offer
(the "Offer") within three days thereafter to ESPN of the monetary consideration on.
which it is willing to license such rights to ESPN. With the exception of monetary
consideration, Conference's Offer shall not contain any terms or conditions which are
different from those contained in this Agreement("Nonconfonning Terms") other than as
permitted by section (d), below. If ESPN does not accept the Offer within fourteen days
of its receipt by ESPN, Conference may then enter into an agreement with a third party
with respect to the same package of events set forth herein, but not for monetary
consideration less than that contained in the offer without first offering to ESPN the
same monetary terms as offered to the third party ("the Reoffer"). ESPN shall accept or
reject a Reoffer by Conference no later than seven days from its receipt.

Apologies if anything looks wrong in the quote. Trying to cut/paste from a pdf made from what appears to be a copier means that when it gets pasted, some characters don't translate.

As some of the folks from C-USA remember, their ESPN TV contract was entered into evidence and became public record when C-USA was sued by ESPN a couple years ago over the Offer/Reoffer process. There was conjuecture of whether the Offer portion could be done via email vs. written document and the C-USA contract in the Offer/Reoffer section referenced a section D that doesn't exist.

C-USA didn't have to go back to ESPN when it got a better offer from FOX. IIRC, the terms C-USA provided in the Offer were the ones ESPN and the conference had been negotiating for some time. Because monetary compensation was better with FOX, ESPN didn't require the opportunity to match. Then again, ESPN said the Offer was not constructed properly, blah blah blah...

Here's a link to that contract (document 1-1.pdf). Its in the zip file with ESPN's original complaint: http://mattsarzsports.com/1-11-cv-02186-WHP.zip

So, basically, you can change the make up of the packages, you simply have to give ESPN the right to buy that same package at that same price.

(02-12-2013 12:34 PM)Attackcoog Wrote:  

(02-10-2013 07:13 AM)mattsarz Wrote:  

Quote:(a) .... It is of the essence of this
Agreement that Conference offer ESPN the same package of rights set forth in this
Agreement, and, should the parties not reach agreement, that the Conference make the
exact same package of rights available to third paties.

(b) If ESPN does not accept the Offer within fourteen days
of its receipt by ESPN, Conference may then enter into an agreement with a third party with respect to the same package of events set forth herein, but not for monetary
consideration less than that contained in the offer without first offering to ESPN the same monetary terms as offered to the third party ("the Reoffer"). ESPN shall accept or reject a Reoffer by Conference no later than seven days from its receipt.

So, basically, you can change the make up of the packages, you simply have to give ESPN the right to buy that same package at that same price.

No, that's the whole point. You have to go to market and see what you can get for the package that ESPN had. You can't rearrange the package to maximize value to another bidder, or trade-off exposure for dollars. You can't do squat, basically.

This explains why Aresco has, to all appearances, been sitting around with his thumb up his butt, TV-wise. He was handcuffed by the old contract, and he couldn't entice ESPN to let him out of it.

(02-12-2013 12:40 PM)johnbragg Wrote:  

(02-12-2013 12:34 PM)Attackcoog Wrote:  

(02-10-2013 07:13 AM)mattsarz Wrote:  

Quote:(a) .... It is of the essence of this
Agreement that Conference offer ESPN the same package of rights set forth in this
Agreement, and, should the parties not reach agreement, that the Conference make the
exact same package of rights available to third paties.

(b) If ESPN does not accept the Offer within fourteen days
of its receipt by ESPN, Conference may then enter into an agreement with a third party with respect to the same package of events set forth herein, but not for monetary
consideration less than that contained in the offer without first offering to ESPN the same monetary terms as offered to the third party ("the Reoffer"). ESPN shall accept or reject a Reoffer by Conference no later than seven days from its receipt.

So, basically, you can change the make up of the packages, you simply have to give ESPN the right to buy that same package at that same price.

No, that's the whole point. You have to go to market and see what you can get for the package that ESPN had. You can't rearrange the package to maximize value to another bidder, or trade-off exposure for dollars. You can't do squat, basically.

This explains why Aresco has, to all appearances, been sitting around with his thumb up his butt, TV-wise. He was handcuffed by the old contract, and he couldn't entice ESPN to let him out of it.

Thats not what it says. It says you can only enter into a final agreement with a third party FOR THE SAME PACKAGE. Your free to create a new package and offer it, but if you have a network offer a bid on the pacakge, you just are forced to go back to ESPN and give them the right of refusal on the newly created pacakge before you can accept it. The Big East has no agreement with NBC. NBC is simply about to submit a written bid proposal. That proposal must be taken to ESPN where they will either match it or reject it. If ESPN rejects it, the BIG East can enter into an actual contractual l agreement with NBC for that package and that package only. If the package is changed, ESPN gets another crack at it. ESPN gets the right of first refusal on any package that the Big East is able to obtain a third party bid for.

So here's how I'm reading this (and assuming the BE contract had the same clauses the CUSA contract did):

The BE has to make a monetary offer to ESPN to go out into the open market.

They did - for $300M/year - and ESPN declines. So now they are free to pursue other networks.

So now if they come back with an offer that is less than $300M/year, ESPN has the chance to match it.

I'm still not seeing where this new offer has to be from a single network or why the offer can't be split among a few networks.

(02-12-2013 12:48 PM)CommuterBob Wrote:  So here's how I'm reading this (and assuming the BE contract had the same clauses the CUSA contract did):

The BE has to make a monetary offer to ESPN to go out into the open market.

They did - for $300M/year - and ESPN declines. So now they are free to pursue other networks.

So now if they come back with an offer that is less than $300M/year, ESPN has the chance to match it.

I'm still not seeing where this new offer has to be from a single network or why the offer can't be split among a few networks.

Read my post above yours. It can be split any way the Big East wants to split it provided thet can get a bid proposal from a network on the newly created package.

(02-12-2013 12:48 PM)CommuterBob Wrote:  So here's how I'm reading this (and assuming the BE contract had the same clauses the CUSA contract did):

The BE has to make a monetary offer to ESPN to go out into the open market.

They did - for $300M/year - and ESPN declines. So now they are free to pursue other networks.

So now if they come back with an offer that is less than $300M/year, ESPN has the chance to match it.

I'm still not seeing where this new offer has to be from a single network or why the offer can't be split among a few networks.

I think it could, but it would have to, in total, match the Big East-ESPN deal(s). It would have to be a single joint bid. It would have to add up to, basically, 22 football games and 75 basketball games on national-basic-cable type outlets. (I don't think ESPN would let you drop the ESPN-U games to a channel with much less distribution than ESPN-U, which is in 70M homes.) And the splits of money and games would have to be worked out exactly.

That's not easy to do, especially if ESPN is telling Aresco to go kick rocks.

I am starting to think the value of the TV deal will be somewhere around $3 million per school for a short term deal. The real kicker is that the conference will sell the naming rights and collect the exit fees which will be boast the total payout for the league. It seems like the old tv contract plus the threat of schools leaving is hurting the conference.

I wonder if they sign the NBC deal if there are ways around the low dollar amount like addition of new teams through expansion. Even if the per team amount is the same, I would still expand so when the next wave hits the conference is a better spot than before.

6 years is not that short term though. 3 years is as long as I'd sign for if we are talking about numbers as low as McMurphy threw out.

(02-12-2013 02:46 PM)bearcatlawjd Wrote:  I wonder if they sign the NBC deal if there are ways around the low dollar amount like addition of new teams through expansion. Even if the per team amount is the same, I would still expand so when the next wave hits the conference is a better spot than before.

I wouldn't count on such a provision with NBC. They are not only notorious penny pinchers, they damn near take pride in it. I am still waiting on a Comcast exec to write a television version of Moneyball (a book that brags about underpaying players). One reason I have said for two years that NBC/comcast is the last company anyone should sign with, especially as a primary carrier.

Also at this point, I cannot imagine further expansion as a good thing. Ten teams is probably best, as any further, with who's avaialble, you just start watering down the product.

(02-12-2013 02:03 PM)johnbragg Wrote:  

(02-12-2013 12:48 PM)CommuterBob Wrote:  So here's how I'm reading this (and assuming the BE contract had the same clauses the CUSA contract did):

The BE has to make a monetary offer to ESPN to go out into the open market.

They did - for $300M/year - and ESPN declines. So now they are free to pursue other networks.

So now if they come back with an offer that is less than $300M/year, ESPN has the chance to match it.

I'm still not seeing where this new offer has to be from a single network or why the offer can't be split among a few networks.

I think it could, but it would have to, in total, match the Big East-ESPN deal(s). It would have to be a single joint bid. It would have to add up to, basically, 22 football games and 75 basketball games on national-basic-cable type outlets. (I don't think ESPN would let you drop the ESPN-U games to a channel with much less distribution than ESPN-U, which is in 70M homes.) And the splits of money and games would have to be worked out exactly.

That's not easy to do, especially if ESPN is telling Aresco to go kick rocks.

Im telling you--this is an exercise in tail chasing. The nBE cant even offer the exact same package contained in the origianl ESPN bid or the current contract. Thay have more football teams and about half the basketball teams. The Big East cant provide the same inventory even if they wanted to.

You are totally misreading this clause. Its simply saying the Big East is precluded from signing a contract with anyone until that exact package is offered to ESPN at the same price. An agreement is a signed contract. Getting offers from other networks for specific pacakges doesnt constitute an agreement or contract. It is these "offers to buy" that must be presented to ESPN for thier acceptance or rejection before the Big East can actually sign a contract with a 3rd party. Accepting 'offers" for new pacakges of rights doesnt violate the terms of this agreeement. Only signing an actual contract with another network for a package of rights that has not been first offered to ESPN at the same price is the only thing that violates this clause. The Big East can slice and dice its rights pacakge however it wishes.

(02-12-2013 02:53 PM)Attackcoog Wrote:  

(02-12-2013 02:03 PM)johnbragg Wrote:  

(02-12-2013 12:48 PM)CommuterBob Wrote:  So here's how I'm reading this (and assuming the BE contract had the same clauses the CUSA contract did):

The BE has to make a monetary offer to ESPN to go out into the open market.

They did - for $300M/year - and ESPN declines. So now they are free to pursue other networks.

So now if they come back with an offer that is less than $300M/year, ESPN has the chance to match it.

I'm still not seeing where this new offer has to be from a single network or why the offer can't be split among a few networks.

I think it could, but it would have to, in total, match the Big East-ESPN deal(s). It would have to be a single joint bid. It would have to add up to, basically, 22 football games and 75 basketball games on national-basic-cable type outlets. (I don't think ESPN would let you drop the ESPN-U games to a channel with much less distribution than ESPN-U, which is in 70M homes.) And the splits of money and games would have to be worked out exactly.

That's not easy to do, especially if ESPN is telling Aresco to go kick rocks.

Im telling you--this is an exercise in tail chasing. The nBE cant even offer the exact same package contained in the origianl ESPN bid or the current contract. Thay have more football teams and about half the basketball teams. The Big East cant provide the same inventory even if they wanted to.

You are totally misreading this clause.

I was. CUSA went from ESPN to FSN without ESPN saying "boo" until they realized that CUSA had emailed what they should have faxed or whatever.

Whoever buys the package can do whatever with it. That part I was wrong about.

Quote:Its simply saying the Big East is precluded from signing a contract with anyone until that exact package is offered to ESPN at the same price.

That's not what the CUSA contract says. "It is of the essence of this agreement that the Conference offer ESPN the same package of rights in this Agreement, and, should the parties not reach agreement, the Conference shall make the exact same package of rights available to third parties." CUSA used to sell ESPN first pick for 10 games. They had to solicit bids for those same ten games.

What I was wrong about is carrying over details like how many games are on what quality network. IF Fox wanted to buy the package so they could put 2 games on FOX and 3 on FoxSports1, that's fine, but they have to buy the rights to everything--the same package that ESPN bought.

They have to offer up for sale the "exact same package of rights" that ESPN had right-of-first-refusal for. Which in the case of the Big EAst, is "all the football games" in one contract and "all the basketball games(except for CBS)" in another one.

(02-12-2013 02:53 PM)Attackcoog Wrote:  

(02-12-2013 02:03 PM)johnbragg Wrote:  

(02-12-2013 12:48 PM)CommuterBob Wrote:  So here's how I'm reading this (and assuming the BE contract had the same clauses the CUSA contract did):

The BE has to make a monetary offer to ESPN to go out into the open market.

They did - for $300M/year - and ESPN declines. So now they are free to pursue other networks.

So now if they come back with an offer that is less than $300M/year, ESPN has the chance to match it.

I'm still not seeing where this new offer has to be from a single network or why the offer can't be split among a few networks.

I think it could, but it would have to, in total, match the Big East-ESPN deal(s). It would have to be a single joint bid. It would have to add up to, basically, 22 football games and 75 basketball games on national-basic-cable type outlets. (I don't think ESPN would let you drop the ESPN-U games to a channel with much less distribution than ESPN-U, which is in 70M homes.) And the splits of money and games would have to be worked out exactly.

That's not easy to do, especially if ESPN is telling Aresco to go kick rocks.

Im telling you--this is an exercise in tail chasing. The nBE cant even offer the exact same package contained in the origianl ESPN bid or the current contract. Thay have more football teams and about half the basketball teams. The Big East cant provide the same inventory even if they wanted to.

You are totally misreading this clause. Its simply saying the Big East is precluded from signing a contract with anyone until that exact package is offered to ESPN at the same price. An agreement is a signed contract. Getting offers from other networks for specific pacakges doesnt constitute an agreement or contract. It is these "offers to buy" that must be presented to ESPN for thier acceptance or rejection before the Big East can actually sign a contract with a 3rd party. Accepting 'offers" for new pacakges of rights doesnt violate the terms of this agreeement. Only signing an actual contract with another network for a package of rights that has not been first offered to ESPN at the same price is the only thing that violates this clause. The Big East can slice and dice its rights pacakge however it wishes.

AttackCoog, as an experienced contracts manager & negotiator, excellent summary, you nailed it, IMHO.