Just for clarification, the exit fee is NOT $52 million. The exit fee is 3x the YOB. It is much higher than $52 million now and I'm not aware of any current ACC teams that are voicing any concerns. How long has this exit fee been in place? Language will be important. Maryland may pay less than what they should but if the ACC wins on the language, that is worth just as much.

The Big12 has both an exit fee and a GOR. Their language regarding the difference is pretty detailed. It is available in their handbook if anyone is interested.

(05-19-2014 03:59 PM)Lurker Above Wrote:  

(05-19-2014 03:39 PM)TerryD Wrote:  

(05-19-2014 03:37 PM)mac6115cd Wrote:  

(05-19-2014 02:45 PM)BruceMcF Wrote:  

(05-19-2014 01:39 PM)mac6115cd Wrote:  Thanks for the clarifications. Is there still a possibility of Maryland , on 1 July, leaving the $30M on the table and both parties dropping their lawsuits?

Not on July 1, but its one possible outcome of the mediation. Its hard for Maryland to force the ACC to pay, its hard for the ACC to force Maryland to pay, so there's a range in the neighborhood of $30m where it may well just end up with the ACC keeping the money its already withheld.

If that happens, it's a win for Maryland and basically negates the GOR. Nobody will ever pay the $51M if they can just walk away from the ACC for ~$30M.

The ACC better hope for a more favorable negotiation or watch out for the B1G and SEC.

Explain to me just exactly how a GOR that was not signed by Maryland and (I believe) was not executed until after Maryland gave notice that it was leaving the conference is implicated in any manner by a lawsuit over exit fees (not a GOR)?

There is not one claim or allegation in the Maryland/ACC litigation that involves the GOR in any manner, whatsoever.

The GOR and the exit fee are two different things, entirely. One is not impacted by the other.

Well...mostly right. IF Maryland wins in Court, and on Appeal if applicable, on their anti-trust argument in either North Carolina or Maryland then such ruling would likely be broad enough to void out a Grant of Rights because both would be a restraint of trade. I know you think such is unlikely, both on the merits and because of the likelihood of settlement, but such is a possibility.

The only GOR that Maryland has signed and agreed to is the B1G.

(05-19-2014 03:37 PM)mac6115cd Wrote:  

(05-19-2014 02:45 PM)BruceMcF Wrote:  Not on July 1, but its one possible outcome of the mediation. Its hard for Maryland to force the ACC to pay, its hard for the ACC to force Maryland to pay, so there's a range in the neighborhood of $30m where it may well just end up with the ACC keeping the money its already withheld.

If that happens, it's a win for Maryland and basically negates the GOR.

Maryland never signed the extended Grant of Rights, no mediation between Mayland and the ACC can have any impact one way or the other on the GOR.

Quote: Nobody will ever pay the $51M if they can just walk away from the ACC for ~$30M.

The most direct way that Maryland talks the fee down is they are able to present a reasonable argument regarding some of the due process flaws in their claim ... given that there is ample time to correct any due process flaws before the time on the GOR clock starts running down, that wouldn't actually have any implications for anybody else either.

I'll stress that IANDL, and don't try to play one on the internet, so I'm not arguing here whether any of those claims have merit, just saying that if Maryland makes a plausible case that some of them do, that improves their position in the negotiations through the mediator.

(05-19-2014 04:15 PM)TerryD Wrote:  

(05-19-2014 03:59 PM)Lurker Above Wrote:  

(05-19-2014 03:39 PM)TerryD Wrote:  

(05-19-2014 03:37 PM)mac6115cd Wrote:  

(05-19-2014 02:45 PM)BruceMcF Wrote:  Not on July 1, but its one possible outcome of the mediation. Its hard for Maryland to force the ACC to pay, its hard for the ACC to force Maryland to pay, so there's a range in the neighborhood of $30m where it may well just end up with the ACC keeping the money its already withheld.

If that happens, it's a win for Maryland and basically negates the GOR. Nobody will ever pay the $51M if they can just walk away from the ACC for ~$30M.

The ACC better hope for a more favorable negotiation or watch out for the B1G and SEC.

Explain to me just exactly how a GOR that was not signed by Maryland and (I believe) was not executed until after Maryland gave notice that it was leaving the conference is implicated in any manner by a lawsuit over exit fees (not a GOR)?

There is not one claim or allegation in the Maryland/ACC litigation that involves the GOR in any manner, whatsoever.

The GOR and the exit fee are two different things, entirely. One is not impacted by the other.

Well...mostly right. IF Maryland wins in Court, and on Appeal if applicable, on their anti-trust argument in either North Carolina or Maryland then such ruling would likely be broad enough to void out a Grant of Rights because both would be a restraint of trade. I know you think such is unlikely, both on the merits and because of the likelihood of settlement, but such is a possibility.

Maryland does not have the legal standing to challenge an ACC Grant of Rights in court.

They never signed one. They are not even arguably bound by one. It does not restrain Maryland, at all. It is not a legal issue in the litigation.

It would be like me filing suit to void the Grant of Rights covering the Big 12.

Jeez Terry,

You really think I do not understand standing, legal issues or precedent? You missed my point entirely. If the parties do not settle and Maryland wins on the argument of antitrust then that means the Court ruled a conference cannot bind it's members in a way that restrains trade and commerce. Now of course such a ruling would not be a direct precedent for grant of rights as such was not an issue in the ACC v. Maryland case, but you cannot see how another plaintiff could use such a ruling to argue grants of rights also violate antitrust laws because they also prevent a member from leaving a conference?

The thing that is interesting about the Maryland lawsuit is that they pushed the antitrust argument hard right off the bat, instead of the stronger punitive damages argument. Most dismissed such arguments to forum shopping and Maryland's AG grandstanding, but what if the goal is bigger than getting Maryland out of the ACC?

(05-19-2014 08:08 PM)Lurker Above Wrote:  ...If the parties do not settle and Maryland wins on the argument of antitrust then that means the Court ruled a conference cannot bind it's members in a way that restrains trade and commerce. Now of course such a ruling would not be a direct precedent for grant of rights as such was not an issue in the ACC v. Maryland case, but you cannot see how another plaintiff could use such a ruling to argue grants of rights also violate antitrust laws because they also prevent a member from leaving a conference?

The thing that is interesting about the Maryland lawsuit is that they pushed the antitrust argument hard right off the bat, instead of the stronger punitive damages argument. Most dismissed such arguments to forum shopping and Maryland's AG grandstanding, but what if the goal is bigger than getting Maryland out of the ACC?

Well that could certainly end up being a case of snatching defeat from the jaws of victory, couldn't it? I mean if the courts rule that the ACC is an anti-competitive cartel then WHAT IN THE WORLD IS THE BIG TEN?

(05-19-2014 08:56 PM)Hokie Mark Wrote:  

(05-19-2014 08:08 PM)Lurker Above Wrote:  ...If the parties do not settle and Maryland wins on the argument of antitrust then that means the Court ruled a conference cannot bind it's members in a way that restrains trade and commerce. Now of course such a ruling would not be a direct precedent for grant of rights as such was not an issue in the ACC v. Maryland case, but you cannot see how another plaintiff could use such a ruling to argue grants of rights also violate antitrust laws because they also prevent a member from leaving a conference?

The thing that is interesting about the Maryland lawsuit is that they pushed the antitrust argument hard right off the bat, instead of the stronger punitive damages argument. Most dismissed such arguments to forum shopping and Maryland's AG grandstanding, but what if the goal is bigger than getting Maryland out of the ACC?

Well that could certainly end up being a case of snatching defeat from the jaws of victory, couldn't it? I mean if the courts rule that the ACC is an anti-competitive cartel then WHAT IN THE WORLD IS THE BIG TEN?

Agree with your point Hokie Mark. There are also two other important considerations which I believe invalidate the OPs hypothesis:

1. the GOR does NOT prevent a member from leaving a conference as the OP implies. A member can freely leave a conference - BUT their media rights stay with the departing conference for the duration of the GOR. That's the genius of the GOR.

2. A member would be hard pressed to challenge their participation in the GOR, or whether it should apply to them. Unlike the exit fee provision, where a member could conceivably have opposed it and lost to majority vote, ALL of the members had to agree to the GOR. Since all of the parties would be deemed by the courts to be sophisticated and knowledgeable of these matters - and advised by top flight legal firms/services - any attempt to plead ignorance of the GOR's provisions would be laughed out of court, IMO.

To your point, Hokie Mark, since these GORs are more or less constructed the same way, one cannot challenge the basic legality of one conference GOR without challenging ALL of the conference GORs. Furthermore, since these GORs are common instruments used in many industries, their basic legality would seem seem to be on solid ground.

The other big thing with the GoRs is that the ball is in the other court. With the exit fees, a school announces it's leaving, the old conference can't do a thing about it, and then they sue. With the grant of rights, instead of the old conference being the one trying to get something, it's instead the departing school who will have to work to get back their TV rights (and even if they can get them back, timing matters here as an actual court case can take a long time and the school probably can't wait that long).

(05-19-2014 04:16 PM)Dasville Wrote:  Just for clarification, the exit fee is NOT $52 million. The exit fee is 3x the YOB. It is much higher than $52 million now and I'm not aware of any current ACC teams that are voicing any concerns. How long has this exit fee been in place? Language will be important. Maryland may pay less than what they should but if the ACC wins on the language, that is worth just as much.

The Big12 has both an exit fee and a GOR. Their language regarding the difference is pretty detailed. It is available in their handbook if anyone is interested.

it's the exit fee when Maryland announced they were leaving, not what it is now. The ACC has said as such in their filings. The most Maryland will pay is $52 million.

(05-19-2014 08:56 PM)Hokie Mark Wrote:  

(05-19-2014 08:08 PM)Lurker Above Wrote:  ...If the parties do not settle and Maryland wins on the argument of antitrust then that means the Court ruled a conference cannot bind it's members in a way that restrains trade and commerce. Now of course such a ruling would not be a direct precedent for grant of rights as such was not an issue in the ACC v. Maryland case, but you cannot see how another plaintiff could use such a ruling to argue grants of rights also violate antitrust laws because they also prevent a member from leaving a conference?

The thing that is interesting about the Maryland lawsuit is that they pushed the antitrust argument hard right off the bat, instead of the stronger punitive damages argument. Most dismissed such arguments to forum shopping and Maryland's AG grandstanding, but what if the goal is bigger than getting Maryland out of the ACC?

Well that could certainly end up being a case of snatching defeat from the jaws of victory, couldn't it? I mean if the courts rule that the ACC is an anti-competitive cartel then WHAT IN THE WORLD IS THE BIG TEN?

The same thing, obviously. Except no one is trying to leave the B1G.

As to whether the ACC's, B1G's, etc. would be an impermissible restraint of trade depends on its terms and how much a conference uses them to prevent its members from leaving.

Everyone needs to remember that only 2 conferences have publically pronounced their grant of rights were enacted to prevent their members from leaving, the ACC and the Big 12.

(05-19-2014 09:47 PM)Eagle78 Wrote:  

(05-19-2014 08:56 PM)Hokie Mark Wrote:  

(05-19-2014 08:08 PM)Lurker Above Wrote:  ...If the parties do not settle and Maryland wins on the argument of antitrust then that means the Court ruled a conference cannot bind it's members in a way that restrains trade and commerce. Now of course such a ruling would not be a direct precedent for grant of rights as such was not an issue in the ACC v. Maryland case, but you cannot see how another plaintiff could use such a ruling to argue grants of rights also violate antitrust laws because they also prevent a member from leaving a conference?

The thing that is interesting about the Maryland lawsuit is that they pushed the antitrust argument hard right off the bat, instead of the stronger punitive damages argument. Most dismissed such arguments to forum shopping and Maryland's AG grandstanding, but what if the goal is bigger than getting Maryland out of the ACC?

Well that could certainly end up being a case of snatching defeat from the jaws of victory, couldn't it? I mean if the courts rule that the ACC is an anti-competitive cartel then WHAT IN THE WORLD IS THE BIG TEN?

Agree with your point Hokie Mark. There are also two other important considerations which I believe invalidate the OPs hypothesis:

1. the GOR does NOT prevent a member from leaving a conference as the OP implies. A member can freely leave a conference - BUT their media rights stay with the departing conference for the duration of the GOR. That's the genius of the GOR.

2. A member would be hard pressed to challenge their participation in the GOR, or whether it should apply to them. Unlike the exit fee provision, where a member could conceivably have opposed it and lost to majority vote, ALL of the members had to agree to the GOR. Since all of the parties would be deemed by the courts to be sophisticated and knowledgeable of these matters - and advised by top flight legal firms/services - any attempt to plead ignorance of the GOR's provisions would be laughed out of court, IMO.

To your point, Hokie Mark, since these GORs are more or less constructed the same way, one cannot challenge the basic legality of one conference GOR without challenging ALL of the conference GORs. Furthermore, since these GORs are common instruments used in many industries, their basic legality would seem seem to be on solid ground.

In response;

1. That is still a potential restraint on trade if such goes beyond the original purpose of the grant of rights, which is to preserve the media partner's rights. If the argument, "You can leave the conference but you must leave behind your $52 million with the conference." fails, then so does the argument, "You can leave the conference but you must leave behind all of your media rights with the conference." also likely fails in the next case.

2. Willingly entering an illegal restraint of trade does not bar one from asserting that cause of action. Just like willingly entering a contract with a punitive damages provision.

(05-19-2014 10:38 PM)ohio1317 Wrote:  The other big thing with the GoRs is that the ball is in the other court. With the exit fees, a school announces it's leaving, the old conference can't do a thing about it, and then they sue. With the grant of rights, instead of the old conference being the one trying to get something, it's instead the departing school who will have to work to get back their TV rights (and even if they can get them back, timing matters here as an actual court case can take a long time and the school probably can't wait that long).

I would not be so sure about that. Unlike with exit fees that deal only with a money dispute between two parties, grant of rights deal with multiple parties (media partners) and the anti- restraint of trade side, the leaving school, would be able to more argue an injunction is needed.

Also, because the ACC filed so quickly to preserve jurisdiction, expect the next school to file suit in their home state as soon as they leave. I would expect such school's home state to be more inclined to grant an injunction that prevents great harm to the home school.

(05-19-2014 04:16 PM)Dasville Wrote:  Just for clarification, the exit fee is NOT $52 million. The exit fee is 3x the YOB. It is much higher than $52 million now and I'm not aware of any current ACC teams that are voicing any concerns. How long has this exit fee been in place? Language will be important. Maryland may pay less than what they should but if the ACC wins on the language, that is worth just as much.

The Big12 has both an exit fee and a GOR. Their language regarding the difference is pretty detailed. It is available in their handbook if anyone is interested.

Several years ago the exit fee was in the $10M+ range. The ACC wanted to increase it to $30M+. FSU and UMD spoke out against it and were able to get it toned-down to $20M. This was sometime around 2010-2012. Then a year or two later the ACC voted to increase it to 3 times the conference's operating budget. Both FSU and UMD voted against it. Then a year or two after that the ACC enacted a grant of rights that UMD apparently did not sign and thereabouts announced their intention to join the Big Ten.

(05-20-2014 01:11 PM)Marge Schott Wrote:  

(05-19-2014 04:16 PM)Dasville Wrote:  Just for clarification, the exit fee is NOT $52 million. The exit fee is 3x the YOB. It is much higher than $52 million now and I'm not aware of any current ACC teams that are voicing any concerns. How long has this exit fee been in place? Language will be important. Maryland may pay less than what they should but if the ACC wins on the language, that is worth just as much.

The Big12 has both an exit fee and a GOR. Their language regarding the difference is pretty detailed. It is available in their handbook if anyone is interested.

Several years ago the exit fee was in the $10M+ range. The ACC wanted to increase it to $30M+. FSU and UMD spoke out against it and were able to get it toned-down to $20M. This was sometime around 2010-2012. Then a year or two later the ACC voted to increase it to 3 times the conference's operating budget. Both FSU and UMD voted against it. Then a year or two after that the ACC enacted a grant of rights that UMD apparently did not sign and thereabouts announced their intention to join the Big Ten.

The ACC took Maryland's public announcement of their move in November 2012 as their official notice. There is nothing in the bylaws that state how notice of withdrawal must be given. That was necessary to start the withholding process. MD did not send an official letter of departure until 6-7 months later.

From the time of MD's public announcement of their departure, they were not included in conference business or legal matters. The GOR was signed about 6 months after MD announced they were joining the B10.

(05-20-2014 06:18 AM)Lurker Above Wrote:  

(05-19-2014 09:47 PM)Eagle78 Wrote:  

(05-19-2014 08:56 PM)Hokie Mark Wrote:  

(05-19-2014 08:08 PM)Lurker Above Wrote:  ...If the parties do not settle and Maryland wins on the argument of antitrust then that means the Court ruled a conference cannot bind it's members in a way that restrains trade and commerce. Now of course such a ruling would not be a direct precedent for grant of rights as such was not an issue in the ACC v. Maryland case, but you cannot see how another plaintiff could use such a ruling to argue grants of rights also violate antitrust laws because they also prevent a member from leaving a conference?

The thing that is interesting about the Maryland lawsuit is that they pushed the antitrust argument hard right off the bat, instead of the stronger punitive damages argument. Most dismissed such arguments to forum shopping and Maryland's AG grandstanding, but what if the goal is bigger than getting Maryland out of the ACC?

Well that could certainly end up being a case of snatching defeat from the jaws of victory, couldn't it? I mean if the courts rule that the ACC is an anti-competitive cartel then WHAT IN THE WORLD IS THE BIG TEN?

Agree with your point Hokie Mark. There are also two other important considerations which I believe invalidate the OPs hypothesis:

1. the GOR does NOT prevent a member from leaving a conference as the OP implies. A member can freely leave a conference - BUT their media rights stay with the departing conference for the duration of the GOR. That's the genius of the GOR.

2. A member would be hard pressed to challenge their participation in the GOR, or whether it should apply to them. Unlike the exit fee provision, where a member could conceivably have opposed it and lost to majority vote, ALL of the members had to agree to the GOR. Since all of the parties would be deemed by the courts to be sophisticated and knowledgeable of these matters - and advised by top flight legal firms/services - any attempt to plead ignorance of the GOR's provisions would be laughed out of court, IMO.

To your point, Hokie Mark, since these GORs are more or less constructed the same way, one cannot challenge the basic legality of one conference GOR without challenging ALL of the conference GORs. Furthermore, since these GORs are common instruments used in many industries, their basic legality would seem seem to be on solid ground.

In response;

1. That is still a potential restraint on trade if such goes beyond the original purpose of the grant of rights, which is to preserve the media partner's rights. If the argument, "You can leave the conference but you must leave behind your $52 million with the conference." fails, then so does the argument, "You can leave the conference but you must leave behind all of your media rights with the conference." also likely fails in the next case.

2. Willingly entering an illegal restraint of trade does not bar one from asserting that cause of action. Just like willingly entering a contract with a punitive damages provision.

With all due respect, I think the fallacy of your argument is that you are implicitly assuming that these GORs are some untested instrument which may not pass muster in the courts. In point of fact, these instruments are quite commonly accepted as standard business transactions. IMO, the chances of any court overturning such a basic practice throughout industry is next to nil. You may not like this, but it doesn't alter this reality.

Also, IMO, you are conflating the ability of any program to leave a conference with their decision as part of a collective agreement to sell their media rights to the conference for a specific period of time, for consideration. IMO, that's why these GORs don't run afoul of restraint of trade laws. A program is free to leave a conference. The fact that they willingly sold their media rights at an earlier time for consideration is, IMO, separate and distinct as this sale was made without any linkage to a hypothetical decision to leave the conference sometime in the future.

Grants of Rights in business and land are often subject to injunctions and being overturned. Anyone who thinks ANY contract is binding, hasn't met the right legal argument or legal team convincing enough in court.

(05-20-2014 07:23 PM)lumberpack4 Wrote:  

(05-20-2014 01:11 PM)Marge Schott Wrote:  

(05-19-2014 04:16 PM)Dasville Wrote:  Just for clarification, the exit fee is NOT $52 million. The exit fee is 3x the YOB. It is much higher than $52 million now and I'm not aware of any current ACC teams that are voicing any concerns. How long has this exit fee been in place? Language will be important. Maryland may pay less than what they should but if the ACC wins on the language, that is worth just as much.

The Big12 has both an exit fee and a GOR. Their language regarding the difference is pretty detailed. It is available in their handbook if anyone is interested.

Several years ago the exit fee was in the $10M+ range. The ACC wanted to increase it to $30M+. FSU and UMD spoke out against it and were able to get it toned-down to $20M. This was sometime around 2010-2012. Then a year or two later the ACC voted to increase it to 3 times the conference's operating budget. Both FSU and UMD voted against it. Then a year or two after that the ACC enacted a grant of rights that UMD apparently did not sign and thereabouts announced their intention to join the Big Ten.

The ACC took Maryland's public announcement of their move in November 2012 as their official notice. There is nothing in the bylaws that state how notice of withdrawal must be given. That was necessary to start the withholding process. MD did not send an official letter of departure until 6-7 months later.

From the time of MD's public announcement of their departure, they were not included in conference business or legal matters. The GOR was signed about 6 months after MD announced they were joining the B10.

Actually there are very specific descriptions of what must take place in order for an ACC member to officially provide notice of withdrawal and for anything to be withheld from them.

In paragraph 43. page 11-12 of Maryland's countersuit against the ACC they clearly identify just what the ACC's provisions were:

"Section IV-5 of the ACC Constitution prescribes the only method for voluntary withdrawal from the ACC "[t]o withdraw from the conference, a member must file an official notice of withdrawal with each of the conference members and the Commissioner on or before August 15 for the withdrawal to be effective June 30 of the following year."

44. Only at the point that an ACC member has provided official notice of withdrawal does the withdrawing institution become subject to a withdrawal payment under the ACC constitution

http://media10.washingtonpost.com/generi...awsuit.pdf

The document goes on to say that under the constitution only after the official notification method can the ACC begin withholding distributions--the ACC clearly began withholding long before UMD provided such official notice.

(05-21-2014 01:22 AM)Eagle78 Wrote:  

(05-20-2014 06:18 AM)Lurker Above Wrote:  

(05-19-2014 09:47 PM)Eagle78 Wrote:  

(05-19-2014 08:56 PM)Hokie Mark Wrote:  

(05-19-2014 08:08 PM)Lurker Above Wrote:  ...If the parties do not settle and Maryland wins on the argument of antitrust then that means the Court ruled a conference cannot bind it's members in a way that restrains trade and commerce. Now of course such a ruling would not be a direct precedent for grant of rights as such was not an issue in the ACC v. Maryland case, but you cannot see how another plaintiff could use such a ruling to argue grants of rights also violate antitrust laws because they also prevent a member from leaving a conference?

The thing that is interesting about the Maryland lawsuit is that they pushed the antitrust argument hard right off the bat, instead of the stronger punitive damages argument. Most dismissed such arguments to forum shopping and Maryland's AG grandstanding, but what if the goal is bigger than getting Maryland out of the ACC?

Well that could certainly end up being a case of snatching defeat from the jaws of victory, couldn't it? I mean if the courts rule that the ACC is an anti-competitive cartel then WHAT IN THE WORLD IS THE BIG TEN?

Agree with your point Hokie Mark. There are also two other important considerations which I believe invalidate the OPs hypothesis:

1. the GOR does NOT prevent a member from leaving a conference as the OP implies. A member can freely leave a conference - BUT their media rights stay with the departing conference for the duration of the GOR. That's the genius of the GOR.

2. A member would be hard pressed to challenge their participation in the GOR, or whether it should apply to them. Unlike the exit fee provision, where a member could conceivably have opposed it and lost to majority vote, ALL of the members had to agree to the GOR. Since all of the parties would be deemed by the courts to be sophisticated and knowledgeable of these matters - and advised by top flight legal firms/services - any attempt to plead ignorance of the GOR's provisions would be laughed out of court, IMO.

To your point, Hokie Mark, since these GORs are more or less constructed the same way, one cannot challenge the basic legality of one conference GOR without challenging ALL of the conference GORs. Furthermore, since these GORs are common instruments used in many industries, their basic legality would seem seem to be on solid ground.

In response;

1. That is still a potential restraint on trade if such goes beyond the original purpose of the grant of rights, which is to preserve the media partner's rights. If the argument, "You can leave the conference but you must leave behind your $52 million with the conference." fails, then so does the argument, "You can leave the conference but you must leave behind all of your media rights with the conference." also likely fails in the next case.

2. Willingly entering an illegal restraint of trade does not bar one from asserting that cause of action. Just like willingly entering a contract with a punitive damages provision.

With all due respect, I think the fallacy of your argument is that you are implicitly assuming that these GORs are some untested instrument which may not pass muster in the courts. In point of fact, these instruments are quite commonly accepted as standard business transactions. IMO, the chances of any court overturning such a basic practice throughout industry is next to nil. You may not like this, but it doesn't alter this reality.

Also, IMO, you are conflating the ability of any program to leave a conference with their decision as part of a collective agreement to sell their media rights to the conference for a specific period of time, for consideration. IMO, that's why these GORs don't run afoul of restraint of trade laws. A program is free to leave a conference. The fact that they willingly sold their media rights at an earlier time for consideration is, IMO, separate and distinct as this sale was made without any linkage to a hypothetical decision to leave the conference sometime in the future.

I never said grant of rights were a new legal concept or that they were not valid. What I said was such could not be used as a restraint of trade whereby an exiting member cannot have any media rights because they granted them to a conference as part of combing such rights with other member rights to sell to one ore more media entities. That is not the case because that is not the purpose of any legitimate grant of rights.

The whole legal purpose of a grant of rights is to protect the purchaser of such rights who bought them for consideration, not to bind together a group who no longer wants to be together. If a conference member wants to leave a conference the media purchaser must be protected, with in effect means they need to not object to the move, which in turn means the exiting member most likely would be joining a conference that the media purchaser also has a contract. The conference's only recourse through the grant of rights is to still get paid, which the media purchaser would still have to do if they sanctioned the exit.

The conference cannot stop a member from leaving because of the grant of rights. That is why the Big 12 added crazy punitive language to their Bylaws at the same time they granted their rights to still punish a member who even appears to be leaving the conference. If you go read the Big 12 Bylaws you will find some of the best examples of punitive measures and restraint of trade language. It was a product of desperation.

In short, a grant of rights is binding to the purchaser of such rights as long as the seller gets paid. It cannot be used as a restraint of trade beyond that purpose.

keep wearing the tin foil hat. it suits you.

(05-21-2014 08:54 AM)Lurker Above Wrote:  

(05-21-2014 01:22 AM)Eagle78 Wrote:  

(05-20-2014 06:18 AM)Lurker Above Wrote:  

(05-19-2014 09:47 PM)Eagle78 Wrote:  

(05-19-2014 08:56 PM)Hokie Mark Wrote:  Well that could certainly end up being a case of snatching defeat from the jaws of victory, couldn't it? I mean if the courts rule that the ACC is an anti-competitive cartel then WHAT IN THE WORLD IS THE BIG TEN?

Agree with your point Hokie Mark. There are also two other important considerations which I believe invalidate the OPs hypothesis:

1. the GOR does NOT prevent a member from leaving a conference as the OP implies. A member can freely leave a conference - BUT their media rights stay with the departing conference for the duration of the GOR. That's the genius of the GOR.

2. A member would be hard pressed to challenge their participation in the GOR, or whether it should apply to them. Unlike the exit fee provision, where a member could conceivably have opposed it and lost to majority vote, ALL of the members had to agree to the GOR. Since all of the parties would be deemed by the courts to be sophisticated and knowledgeable of these matters - and advised by top flight legal firms/services - any attempt to plead ignorance of the GOR's provisions would be laughed out of court, IMO.

To your point, Hokie Mark, since these GORs are more or less constructed the same way, one cannot challenge the basic legality of one conference GOR without challenging ALL of the conference GORs. Furthermore, since these GORs are common instruments used in many industries, their basic legality would seem seem to be on solid ground.

In response;

1. That is still a potential restraint on trade if such goes beyond the original purpose of the grant of rights, which is to preserve the media partner's rights. If the argument, "You can leave the conference but you must leave behind your $52 million with the conference." fails, then so does the argument, "You can leave the conference but you must leave behind all of your media rights with the conference." also likely fails in the next case.

2. Willingly entering an illegal restraint of trade does not bar one from asserting that cause of action. Just like willingly entering a contract with a punitive damages provision.

With all due respect, I think the fallacy of your argument is that you are implicitly assuming that these GORs are some untested instrument which may not pass muster in the courts. In point of fact, these instruments are quite commonly accepted as standard business transactions. IMO, the chances of any court overturning such a basic practice throughout industry is next to nil. You may not like this, but it doesn't alter this reality.

Also, IMO, you are conflating the ability of any program to leave a conference with their decision as part of a collective agreement to sell their media rights to the conference for a specific period of time, for consideration. IMO, that's why these GORs don't run afoul of restraint of trade laws. A program is free to leave a conference. The fact that they willingly sold their media rights at an earlier time for consideration is, IMO, separate and distinct as this sale was made without any linkage to a hypothetical decision to leave the conference sometime in the future.

I never said grant of rights were a new legal concept or that they were not valid. What I said was such could not be used as a restraint of trade whereby an exiting member cannot have any media rights because they granted them to a conference as part of combing such rights with other member rights to sell to one ore more media entities. That is not the case because that is not the purpose of any legitimate grant of rights.

The whole legal purpose of a grant of rights is to protect the purchaser of such rights who bought them for consideration, not to bind together a group who no longer wants to be together. If a conference member wants to leave a conference the media purchaser must be protected, with in effect means they need to not object to the move, which in turn means the exiting member most likely would be joining a conference that the media purchaser also has a contract. The conference's only recourse through the grant of rights is to still get paid, which the media purchaser would still have to do if they sanctioned the exit.

The conference cannot stop a member from leaving because of the grant of rights. That is why the Big 12 added crazy punitive language to their Bylaws at the same time they granted their rights to still punish a member who even appears to be leaving the conference. If you go read the Big 12 Bylaws you will find some of the best examples of punitive measures and restraint of trade language. It was a product of desperation.

With all due respect, your second paragraph is nonsense. If a rock band signs a recording contract with a grant of rights, under your analysis a member of the band could not later leave the band? Of course that is not the case, and such existing member could join another band and enter into a new recording contract with the new band. And if the new band is with the same record company, and it likes the new band the new contract, the new band easily could get a lucrative contract.

In short, a grant of rights is binding to the purchaser of such rights as long as the seller gets paid. It cannot be used as a restraint of trade beyond that purpose.

(05-21-2014 07:48 AM)Tbringer Wrote:  

(05-20-2014 07:23 PM)lumberpack4 Wrote:  

(05-20-2014 01:11 PM)Marge Schott Wrote:  

(05-19-2014 04:16 PM)Dasville Wrote:  Just for clarification, the exit fee is NOT $52 million. The exit fee is 3x the YOB. It is much higher than $52 million now and I'm not aware of any current ACC teams that are voicing any concerns. How long has this exit fee been in place? Language will be important. Maryland may pay less than what they should but if the ACC wins on the language, that is worth just as much.

The Big12 has both an exit fee and a GOR. Their language regarding the difference is pretty detailed. It is available in their handbook if anyone is interested.

Several years ago the exit fee was in the $10M+ range. The ACC wanted to increase it to $30M+. FSU and UMD spoke out against it and were able to get it toned-down to $20M. This was sometime around 2010-2012. Then a year or two later the ACC voted to increase it to 3 times the conference's operating budget. Both FSU and UMD voted against it. Then a year or two after that the ACC enacted a grant of rights that UMD apparently did not sign and thereabouts announced their intention to join the Big Ten.

The ACC took Maryland's public announcement of their move in November 2012 as their official notice. There is nothing in the bylaws that state how notice of withdrawal must be given. That was necessary to start the withholding process. MD did not send an official letter of departure until 6-7 months later.

From the time of MD's public announcement of their departure, they were not included in conference business or legal matters. The GOR was signed about 6 months after MD announced they were joining the B10.

Actually there are very specific descriptions of what must take place in order for an ACC member to officially provide notice of withdrawal and for anything to be withheld from them.

In paragraph 43. page 11-12 of Maryland's countersuit against the ACC they clearly identify just what the ACC's provisions were:

"Section IV-5 of the ACC Constitution prescribes the only method for voluntary withdrawal from the ACC "[t]o withdraw from the conference, a member must file an official notice of withdrawal with each of the conference members and the Commissioner on or before August 15 for the withdrawal to be effective June 30 of the following year."

44. Only at the point that an ACC member has provided official notice of withdrawal does the withdrawing institution become subject to a withdrawal payment under the ACC constitution

http://media10.washingtonpost.com/generi...awsuit.pdf

The document goes on to say that under the constitution only after the official notification method can the ACC begin withholding distributions--the ACC clearly began withholding long before UMD provided such official notice.

Interesting. I've long said there's no way UMD pays the "full" exit fee (~$50M+). Looks like the ACC's clearly in the wrong on this point. And I think legally you have to give UMD some leeway since they decided to join the Big Ten before the next year started following the increased exit fee vote that they voted against.

(05-21-2014 07:48 AM)Tbringer Wrote:  

(05-20-2014 07:23 PM)lumberpack4 Wrote:  

(05-20-2014 01:11 PM)Marge Schott Wrote:  

(05-19-2014 04:16 PM)Dasville Wrote:  Just for clarification, the exit fee is NOT $52 million. The exit fee is 3x the YOB. It is much higher than $52 million now and I'm not aware of any current ACC teams that are voicing any concerns. How long has this exit fee been in place? Language will be important. Maryland may pay less than what they should but if the ACC wins on the language, that is worth just as much.

The Big12 has both an exit fee and a GOR. Their language regarding the difference is pretty detailed. It is available in their handbook if anyone is interested.

Several years ago the exit fee was in the $10M+ range. The ACC wanted to increase it to $30M+. FSU and UMD spoke out against it and were able to get it toned-down to $20M. This was sometime around 2010-2012. Then a year or two later the ACC voted to increase it to 3 times the conference's operating budget. Both FSU and UMD voted against it. Then a year or two after that the ACC enacted a grant of rights that UMD apparently did not sign and thereabouts announced their intention to join the Big Ten.

The ACC took Maryland's public announcement of their move in November 2012 as their official notice. There is nothing in the bylaws that state how notice of withdrawal must be given. That was necessary to start the withholding process. MD did not send an official letter of departure until 6-7 months later.

From the time of MD's public announcement of their departure, they were not included in conference business or legal matters. The GOR was signed about 6 months after MD announced they were joining the B10.

Actually there are very specific descriptions of what must take place in order for an ACC member to officially provide notice of withdrawal and for anything to be withheld from them.

In paragraph 43. page 11-12 of Maryland's countersuit against the ACC they clearly identify just what the ACC's provisions were:

"Section IV-5 of the ACC Constitution prescribes the only method for voluntary withdrawal from the ACC "[t]o withdraw from the conference, a member must file an official notice of withdrawal with each of the conference members and the Commissioner on or before August 15 for the withdrawal to be effective June 30 of the following year."
44. Only at the point that an ACC member has provided official notice of withdrawal does the withdrawing institution become subject to a withdrawal payment under the ACC constitution

http://media10.washingtonpost.com/generi...awsuit.pdf

The document goes on to say that under the constitution only after the official notification method can the ACC begin withholding distributions--the ACC clearly began withholding long before UMD provided such official notice.

Where does that describe the "official notice"? Where does it say what media or communication device must be used to make the "official notice"? Like I said there is NOTHING in the bylaws that states how the notice must be given. MD chose to give their "official notice" at a press conference with the B12. You are attempting to read more into the bylaws than what exists in the bylaws and there is nothing in the bylaws that specifies what "official notice" is and what it is not.