Link

I have no idea why. The AAC need Louisville as much as Louisville needed the AAC. Why would UofL have agreed to any exit fee at all?

(11-13-2013 04:41 PM)Wolfman Wrote:  Link

I have no idea why. The AAC need Louisville as much as Louisville needed the AAC. Why would UofL have agreed to any exit fee at all?

They agreed to an exit fee when it was still named the Big East and there was no ACC invite in sight.

edit: and apparently, they were leaving the Big East even without an ACC invite in hand. Ballsy.

(11-13-2013 06:00 PM)CrazyPaco Wrote:  

(11-13-2013 04:41 PM)Wolfman Wrote:  Link

I have no idea why. The AAC need Louisville as much as Louisville needed the AAC. Why would UofL have agreed to any exit fee at all?

They agreed to an exit fee when it was still named the Big East and there was no ACC invite in sight.

edit: and apparently, they were leaving the Big East even without an ACC invite in hand. Ballsy.

It was my understanding the BE remained intact and the football schools split to form a new conference. Not the first time I have been wrong today.

Why 11 million? They did the 27 month notice so I thought the exit fee was 10 million in that case.

(11-13-2013 06:44 PM)4x4hokies Wrote:  Why 11 million? They did the 27 month notice so I thought the exit fee was 10 million in that case.

We could have argued "formal notice" in court but instead, put the conferences best interest before our own.
We could have argued "exit fees" but we didn't.

This is just how we do business.

We appreciate all that the BE has done for us and we follow the rules.

We were most likely overpaid by the BE for a couple of years, the least we can do is honor our exit agreement.

We took advantage of the opportunity given.
That others did not is not on us!

(11-13-2013 06:43 PM)Wolfman Wrote:  

(11-13-2013 06:00 PM)CrazyPaco Wrote:  

(11-13-2013 04:41 PM)Wolfman Wrote:  Link

I have no idea why. The AAC need Louisville as much as Louisville needed the AAC. Why would UofL have agreed to any exit fee at all?

They agreed to an exit fee when it was still named the Big East and there was no ACC invite in sight.

edit: and apparently, they were leaving the Big East even without an ACC invite in hand. Ballsy.

It was my understanding the BE remained intact and the football schools split to form a new conference. Not the first time I have been wrong today.

You have it backwards. The basketball schools split and bought the rights to the "Big East" name to take with them. The American is the legal heir to the Big East Conference...actually, it is 100% the Big East Conference, just under a new name.

(11-13-2013 07:03 PM)Dasville Wrote:  

(11-13-2013 06:44 PM)4x4hokies Wrote:  Why 11 million? They did the 27 month notice so I thought the exit fee was 10 million in that case.

We could have argued "formal notice" in court but instead, put the conferences best interest before our own.
We could have argued "exit fees" but we didn't.

This is just how we do business.

We appreciate all that the BE has done for us and we follow the rules.

We were most likely overpaid by the BE for a couple of years, the least we can do is honor our exit agreement.

We took advantage of the opportunity given.
That others did not is not on us!

I'd like a few million dollars too since you are just giving them away. It'd be easily argued that Louisville qualified for the 5 million exit fee. So they are gifting 6 million. They probably had to give up any claim they had to the WVU, Syracuse, and Pitt exit fees too. Sounds like a horrible job negotiating.

(11-13-2013 07:06 PM)CrazyPaco Wrote:  

(11-13-2013 06:43 PM)Wolfman Wrote:  

(11-13-2013 06:00 PM)CrazyPaco Wrote:  

(11-13-2013 04:41 PM)Wolfman Wrote:  Link

I have no idea why. The AAC need Louisville as much as Louisville needed the AAC. Why would UofL have agreed to any exit fee at all?

They agreed to an exit fee when it was still named the Big East and there was no ACC invite in sight.

edit: and apparently, they were leaving the Big East even without an ACC invite in hand. Ballsy.

It was my understanding the BE remained intact and the football schools split to form a new conference. Not the first time I have been wrong today.

You have it backwards. The basketball schools split and bought the rights to the "Big East" name to take with them. The American is the legal heir to the Big East Conference...actually, it is 100% the Big East Conference, just under a new name.

This.

(11-13-2013 07:22 PM)4x4hokies Wrote:  

(11-13-2013 07:03 PM)Dasville Wrote:  

(11-13-2013 06:44 PM)4x4hokies Wrote:  Why 11 million? They did the 27 month notice so I thought the exit fee was 10 million in that case.

We could have argued "formal notice" in court but instead, put the conferences best interest before our own.
We could have argued "exit fees" but we didn't.

This is just how we do business.

We appreciate all that the BE has done for us and we follow the rules.

We were most likely overpaid by the BE for a couple of years, the least we can do is honor our exit agreement.

We took advantage of the opportunity given.
That others did not is not on us!

I'd like a few million dollars too since you are just giving them away. It'd be easily argued that Louisville qualified for the 5 million exit fee. So they are gifting 6 million. They probably had to give up any claim they had to the WVU, Syracuse, and Pitt exit fees too. Sounds like a horrible job negotiating.

We knew full well the BE Constitution when we signed up. We knew full well the reason for the increase in the exit fee when it occurred. We aren't giving anything away. We are honoring the contract we signed and the conference we participated in.
That is how we do business.

That ESPN article doesn't make any sense to me about Jurich saving Louisville $4-million by giving notice in 2011 when they were flirting with the Big 12.

What I don't understand is, if they gave notice in 2011; that is before Navy joined (which is what increased the exit fee), so the exit costs then would have still been the $5-million fee and the 27-month notice. Well they will have stayed the 27-months, so why is it more than $5-million? There must be some other reason, that is more than 'Cuse and Pitt paid and they didn't stay 27 months and they announced in 2011 too.

(11-13-2013 09:11 PM)IceJus10 Wrote:  That ESPN article doesn't make any sense to me about Jurich saving Louisville $4-million by giving notice in 2011 when they were flirting with the Big 12.

What I don't understand is, if they gave notice in 2011; that is before Navy joined (which is what increased the exit fee), so the exit costs then would have still been the $5-million fee and the 27-month notice. Well they will have stayed the 27-months, so why is it more than $5-million? There must be some other reason, that is more than 'Cuse and Pitt paid and they didn't stay 27 months and they announced in 2011 too.

'Cuse and Pitt paid exit fee ($5 million) plus 0.5 X the exit fee (total $7.5 mill) to leave the conference 1 yr. early.

WVU paid the exit fee ($5 million) plus 3 x the exit fee (approx.: $5 mill. x 3= $15 mill) for a total of $21 mill to leave the conference immediately

Rutgers is supposed to pay $10 mill exit fee plus 0.5 x the exit fee (total $15 mill) to leave the AAC in 1 yr.

UofL exit fee should be $10 mill x 0.5 (total $15 mill) to leave the AAC in 1 yr.


We just signed an agreement for an $11 mill exit with some terms.

We followed the bylaws/didn't sue anyone and ended up with a fair, win/win.

That others are being/were stinky is on them.

(11-13-2013 06:00 PM)CrazyPaco Wrote:  edit: and apparently, they were leaving the Big East even without an ACC invite in hand. Ballsy.

What?

(11-13-2013 06:44 PM)4x4hokies Wrote:  Why 11 million? They did the 27 month notice so I thought the exit fee was 10 million in that case.

According to McMurphy, Louisville gave notice in 2011 that is was planning to leave the conference. Here is the important snippet from the ESPN article:

Jurich reiterated on Oct. 13, 2011 — the same day Big East officials met with potential member Central Florida — that he was providing verbal notice that Louisville would exit the Big East. The next day, Jurich notified Genshaft, the chairwoman of the Big East’s board of directors who was in London at the time, of Louisville’s plans on a conference call with Marinatto.

Unable to change Jurich’s mind, Marinatto and Genshaft asked Jurich not to submit a withdrawal letter because it could be obtained through a public records search and they feared knowledge of Louisville’s decision would hurt the league’s stability. Jurich agreed not to submit the letter but notified other Big East athletic directors in the following months that Louisville was leaving the league.

The only thing I question about this part of the story is whether or not it would actually hold up in court. While Jurich did give verbal notice of UofL’s intentions, he didn’t actually file a formal, written notice of withdrawal (at the request of the Big East). So in essence, he made a handshake deal with the league. He agreed not to file formal paperwork so long as they agreed to start the 27 month clock in October of 2011. The only problem here is that handshake agreements usually don’t hold up in court (there is a reason why lawyers tell you to “get it in writing”). If the American had really wanted to do so, I think they probably would have had a pretty strong legal argument that the 27 month waiting period actually started when UofL filed formal notice on Nov. 29, 2012.

Instead, I think the conference leadership appreciated the honesty Jurich showed about his intentions and I think they wanted to “fulfill their end of the bargain” so to say (i.e. Jurich didn’t file paperwork and cause a massive nightmare for the conference in 2011, so the conference decide to waive most – but not all – of the early exit fee). In other words, the early exit penalty wasn’t reduced because notice was given in 2011; it was reduced because Louisville didn’t cause headaches for the league in 2011 and because Jurich was willing to work with the league to keep the dispute out of the courts.

(11-13-2013 06:00 PM)CrazyPaco Wrote:  edit: and apparently, they were leaving the Big East even without an ACC invite in hand. Ballsy.

Jurich gave the conference verbal notice in October of 2011, not the formal written notice as required by the bylaws. Verbal notice is essentially worthless as it isn't really enforceable in courts (same as a handshake agreement) and doesn't really have any consequences attached to it.

Think about it like this. Had Louisville not gotten an invite to the ACC, do you honestly think they'd still leave the conference? I suppose they could have stuck with the Big East catholic school and made football an independent, but I think that would essentially be suicide for the football program (no one wants to schedule us now OOC so putting together a full 12 game slate would be tough).

In the end, I think Jurich probably wanted to leave within 27months and as luck would have it, that is what ended up happening. But without the ACC invite, I highly doubt he would have actually followed through on the "we are leaving in 27 months".

(11-13-2013 07:22 PM)4x4hokies Wrote:  It'd be easily argued that Louisville qualified for the 5 million exit fee. So they are gifting 6 million. They probably had to give up any claim they had to the WVU, Syracuse, and Pitt exit fees too. Sounds like a horrible job negotiating.

I think it was pretty slick negotiating actually. If you recall, Rutgers filed a lawsuit against the Big East back in November of 2012 challenging the $10 million exit fee. From my understanding of the case (I’m not a lawyer so I could be wrong), Rutgers has two main arguments:

a) the conference was not consistent in assessing damages for violating the 27 month waiting period. Pitt and Cuse paid a $2.5 million penalty on top of a $5 million buy out fee for the right to leave one year early. WVU paid a $15 million penalty on top of a $5 million buy out fee in order to leave two years early. Notre Dame paid nothing to leave two years early.

b) Rutgers contends it has a vested right to pay a withdrawal fee of only $5 million due to a clause in the conference’s bylaws. That clause states that if the conference loses its AQ status, then the exit fee will be reduced from $10 million to $5 million dollars. Rutgers argues that the conference was notified that it was losing its AQ status in June of 2012 and as a result, its exit fees should be reduced accordingly.

So how does the Rutgers lawsuit factor into Jurich being a smart negotiator? Part of Louisville's agreement with the American stipulates that if the American allows Rutgers to leave for the Big 10 for less than $11 million (i.e. if they win their lawsuit and get to leave on the cheap), then Louisville would be refunded the difference (see article 5.1.c on page 5 of the settlement agreement).

In other words, if Rutgers wins its case, then UofL will get the benefit of that ruling without having to spend a dime on court costs/attorney fees/etc. If Rutgers loses its case and ends up paying the full $15 million the conference is seeking, then UofL still comes out ahead because it will only be required to pay the agreed to $11 million. In other words, Louisville protected itself against the risk of paying more (full exit fees plus court costs) while also ensuring that it benefited in case Rutgers gets the fees reduced.

(11-13-2013 11:18 PM)UofLgrad07 Wrote:  

(11-13-2013 06:44 PM)4x4hokies Wrote:  Why 11 million? They did the 27 month notice so I thought the exit fee was 10 million in that case.

According to McMurphy, Louisville gave notice in 2011 that is was planning to leave the conference. Here is the important snippet from the ESPN article:

Jurich reiterated on Oct. 13, 2011 — the same day Big East officials met with potential member Central Florida — that he was providing verbal notice that Louisville would exit the Big East. The next day, Jurich notified Genshaft, the chairwoman of the Big East’s board of directors who was in London at the time, of Louisville’s plans on a conference call with Marinatto.

Unable to change Jurich’s mind, Marinatto and Genshaft asked Jurich not to submit a withdrawal letter because it could be obtained through a public records search and they feared knowledge of Louisville’s decision would hurt the league’s stability. Jurich agreed not to submit the letter but notified other Big East athletic directors in the following months that Louisville was leaving the league.

The only thing I question about this part of the story is whether or not it would actually hold up in court. While Jurich did give verbal notice of UofL’s intentions, he didn’t actually file a formal, written notice of withdrawal (at the request of the Big East). So in essence, he made a handshake deal with the league. He agreed not to file formal paperwork so long as they agreed to start the 27 month clock in October of 2011. The only problem here is that handshake agreements usually don’t hold up in court (there is a reason why lawyers tell you to “get it in writing”). If the American had really wanted to do so, I think they probably would have had a pretty strong legal argument that the 27 month waiting period actually started when UofL filed formal notice on Nov. 29, 2012.

Instead, I think the conference leadership appreciated the honesty Jurich showed about his intentions and I think they wanted to “fulfill their end of the bargain” so to say (i.e. Jurich didn’t file paperwork and cause a massive nightmare for the conference in 2011, so the conference decide to waive most – but not all – of the early exit fee). In other words, the early exit penalty wasn’t reduced because notice was given in 2011; it was reduced because Louisville didn’t cause headaches for the league in 2011 and because Jurich was willing to work with the league to keep the dispute out of the courts.

I'm not sure why he wrote anything about giving notice since the exit fee was 5 million at the time and Louisville is paying 11 million. So not much at all was "saved" by not suing. Rutgers has a case suing for the 5 million exit. I'd be upset if my school started giving away money without a fight. It'd be hard to turn around and ask your donors for more if you freely give so much away.

(11-13-2013 09:11 PM)IceJus10 Wrote:  That ESPN article doesn't make any sense to me about Jurich saving Louisville $4-million by giving notice in 2011 when they were flirting with the Big 12.

What I don't understand is, if they gave notice in 2011; that is before Navy joined (which is what increased the exit fee), so the exit costs then would have still been the $5-million fee and the 27-month notice. Well they will have stayed the 27-months, so why is it more than $5-million? There must be some other reason, that is more than 'Cuse and Pitt paid and they didn't stay 27 months and they announced in 2011 too.

You are 100% correct. If they had served written notice as required by the Big East bylaws on October 13, 2011, they would have only owed $5M in the exit fee (as Navy had not signed on yet) and would have fulfilled the 27 month waiting notice.

Instead, Jurich gave the conference verbal notice of his intentions. Verbal notice might by nice for transparency purposes, but it essentially meaningless in terms of when the 27 month waiting period started or how much ended up being owed in exit fees. The reason why Louisville is paying $10 million exit fee plus a $1 million early exit penalty is because the school didn't provide the formal written notice until December 7th, 2012.

Before anyone decides to dispute that, look at the withdrawal notice date in the actual settlement agreement Recitals, Part D on page 1). That date is the one used to calculate exit fee and any early exit fee penalties (for violating the 27 month agreement).

(11-13-2013 11:34 PM)UofLgrad07 Wrote:  

(11-13-2013 06:00 PM)CrazyPaco Wrote:  edit: and apparently, they were leaving the Big East even without an ACC invite in hand. Ballsy.

Jurich gave the conference verbal notice in October of 2011, not the formal written notice as required by the bylaws. Verbal notice is essentially worthless as it isn't really enforceable in courts (same as a handshake agreement) and doesn't really have any consequences attached to it.

Think about it like this. Had Louisville not gotten an invite to the ACC, do you honestly think they'd still leave the conference? I suppose they could have stuck with the Big East catholic school and made football an independent, but I think that would essentially be suicide for the football program (no one wants to schedule us now OOC so putting together a full 12 game slate would be tough).

In the end, I think Jurich probably wanted to leave within 27months and as luck would have it, that is what ended up happening. But without the ACC invite, I highly doubt he would have actually followed through on the "we are leaving in 27 months".

"At least" 27-month notice. He was giving "at-least" a 27 month notice. And he would have entered into future contracts with the AAC with "at least" a 27 month notice!

(11-13-2013 11:34 PM)UofLgrad07 Wrote:  

(11-13-2013 06:00 PM)CrazyPaco Wrote:  edit: and apparently, they were leaving the Big East even without an ACC invite in hand. Ballsy.

Jurich gave the conference verbal notice in October of 2011, not the formal written notice as required by the bylaws. Verbal notice is essentially worthless as it isn't really enforceable in courts (same as a handshake agreement) and doesn't really have any consequences attached to it.

Think about it like this. Had Louisville not gotten an invite to the ACC, do you honestly think they'd still leave the conference? I suppose they could have stuck with the Big East catholic school and made football an independent, but I think that would essentially be suicide for the football program (no one wants to schedule us now OOC so putting together a full 12 game slate would be tough).

In the end, I think Jurich probably wanted to leave within 27months and as luck would have it, that is what ended up happening. But without the ACC invite, I highly doubt he would have actually followed through on the "we are leaving in 27 months".

good point, Louisville likely would have just stayed in the American without an invite elsewhere.

(11-13-2013 11:38 PM)4x4hokies Wrote:  I'm not sure why he wrote anything about giving notice since the exit fee was 5 million at the time and Louisville is paying 11 million.

McMurphy's argument was essentially bollocks. Allow me to explain.

In early November of 2012 (before our ACC invitation), the Big East bylaws were amended as follows:

[if a member withdraws on or after the date Navy and/or AFA enter into a contract to join the conference]…such Withdrawing Member must pay a withdrawal fee to the Conference in an amount equal to ten million dollars ($10,000,000); provided that in any fiscal year in which the Conference does not maintain, or is notified by the Bowl Championship Series (or any successor thereto) that at a specified time in the future it will lose, its “automatic qualifier” status for purposes of the Bowl Championship Series (or any successor thereto), such amount shall instead be equal to five million dollars ($5,000,000)…

Had Louisville given legal, written notice on October 13, 2011 to leave on June 30, 2014, then the school would have only owed the conference $5 million in exit fees and nothing for an early withdrawal. However, that isn't what Louisville did. Instead, Louisville gave the conference verbal notice, which is essentially worthless from a legal perspective (it equates to a handshake agreement).

Instead, Louisville filed formal notice to leave the conference on December 7th, 2012. That is the date when the 27 month timer started and the date used to calculate how much Louisville owed in exit fees. Since Dec 7th, 2012 is a few weeks after the bylaws were officially amended, Louisville owed $10 million in exit fees plus a damages for an early exit if it left before March 2014 (27 moth waiting period).

The fact that UofL agreed to pay the increased $10 million exit fee tells you that UofL didn’t provide formal written notice until after the fees were raised. Further evidence is present in the actual settlement agreement which lists Dec 7, 2012 as the withdraw date. In other words, McMurphy's argument that “notice given in 2011 reduced exit fees” doesn't really hold water.

(11-13-2013 11:38 PM)4x4hokies Wrote:  So not much at all was "saved" by not suing. Rutgers has a case suing for the 5 million exit.

Two points:

#1. The conference was seeking $15 million from Louisville in order to leave early (before March 2014). That works out to a $10 million exit fee plus $5 million in damages for leaving early. Louisville settled for $11 million instead; a $10 million exit fee plus $1 million in early withdraw penalty. So they actually reduced the payment they were expected to make by $4 million.

#2. Part of the settlement states that if the American allows Rutgers to leave for the Big 10 for less than $11 million (i.e. if they win their lawsuit and get to leave on the cheap), then Louisville would be refunded the difference. In other words, Louisville will pay the same as Rutgers if Rutgers wins. UofL will get the benefit of that ruling if it favors without having to spend a dime on court costs/attorney fees/etc.

The genius part of the agreement is what happens if Rutgers loses. Let's say Rutgers get stuck with the full bill ($15 million). In that case, Louisville only pays $11 million (what they agreed to with the American). In other words, Louisville will still come out ahead because it will pay a lower amount to leave early.

We essentially got Rutgers to take all of the risk for us for free.