Doesn't a GOR apply only to a school's home games?

In other words, if UVa joined the Big 10, the Big 10 still controls the rights to UVa's conference road games, right?

So adding UVa under ACC GOR is like adding half a school in terms of increased inventory.

If the new Big 10 deal exceeds $30M a year, isn't it conceivable UVa might prefer a half share of Big 10 money vs. a full share of ACC money ($20M a year) given that the GOR will expire relatively "soon" if this is truly a 100-year decision.

In fact, might the Big 10 guarantee UVA at least ACC money during the GOR period so they don't lose anything in the move?

Also, is there an ACC exit fee now too in addition to the GOR? Or is the exit fee now gone? If both are in effect, how in the world could the ACC enforce both if the exit fee is essentially a liquidated damages provision?

(11-27-2014 12:28 AM)CougarRed Wrote:  Doesn't a GOR apply only to a school's home games?

In other words, if UVa joined the Big 10, the Big 10 still controls the rights to UVa's conference road games, right?

So adding UVa under ACC GOR is like adding half a school in terms of increased inventory.

If the new Big 10 deal exceeds $30M a year, isn't it conceivable UVa might prefer a half share of Big 10 money vs. a full share of ACC money ($20M a year) given that the GOR will expire relatively "soon" if this is truly a 100-year decision.

In fact, might the Big 10 guarantee UVA at least ACC money during the GOR period so they don't lose anything in the move?

Also, is there an ACC exit fee now too in addition to the GOR? Or is the exit fee now gone? If both are in effect, how in the world could the ACC enforce both if the exit fee is essentially a liquidated damages provision?

I believe the ACC would retain the rights for UVA's home games if they joined the Big Ten. UVA would still be liable for the exit fee. The fact that UVA voted for the exit fee and signed the grant of rights long after the Big Ten's interest in UVA was public knowledge should be a strong indication if anyone is wondering whether UVA has any interest in joining the Big Ten.

UVA has plenty of money, I don't think they would make any drastic decisions based on that.

It does only cover the home games (as those are the only games a school controls itself and transfers to the conference). That said, no conference is going to invite a member from a conference with a grant of rights in place unless it's relatively close to expiring.

Think about it from the Big Ten perspective in this example. If you invite Virginia, they play about 7 home games and probably 1 road out of conference game. You are talking 4-5 conference road games and that's all you get. Those games aren't games you have simply gained. If Ohio State is playing Virginia, it isn't playing Wisconsin or Minnesota or Illinois, etc. That means even the value of those games in minimized.

In short, unless we are talking a couple years left in the grant of rights (where it's realistic to buy it out), they are very strong.

GOR's are quite powerful, but not as powerful as their master Gorlock the Evilone. He created them bind the weak into permanent subservience to the Architect of the Universe - sports be upon him (SBUH). The Architect of the Universe is also known as the golden one. Tread carefully.

Yes a GOR only applies to home games. So Virginia and TExas could bolt the ACC and Big 12 and play in the B1G Ten, with UT @ Michigan on BTN and Nebraska @UT on ESPN or Fox (as a Big 12 package game).

There would be damages from losing 4-5 UT/UVA games per season, but those are exit fee-caliber losses.

The bigger question is the validity of the GOR when a school leaves a conference. I Am Not A Lawyer, but it strikes me as a one-way contract, which Judge Judy says is un-enforceable. I don't see what UT gets out of the GOR if they leave the conference. The contract wasn't frontloaded, so it's not exactly like a music-industry GOR where the artist sells the rights to the song for a $10,000 lump-sum and then it earns $1,000,000 a year in royalties and the artist is out-of-luck.

Maybe it's more like a six-album contract, where PRince has an ironclad obligation to deliver Atlantic (or whoever) 6 albums, and can't release anything until that's complete?

The Grant of Rights strikes me as an exit penalty, rather than a liquidated damages clause. An "exit penalty" is a contract provision primarily designed to discourage breaking the contract. A "liquidated damages provision" says that damages from breaking the contract are major, but hard to calculate exactly, so in advance we're agreeing to estimate that the damages are this much ($1M or $5M or one-years-revenues). Every conference bylaws I've seen since starting to look at conference bylaws and contracts back in 2011 has that language

(11-27-2014 12:28 AM)CougarRed Wrote:  Doesn't a GOR apply only to a school's home games?

In other words, if UVa joined the Big 10, the Big 10 still controls the rights to UVa's conference road games, right?

So adding UVa under ACC GOR is like adding half a school in terms of increased inventory.

If the new Big 10 deal exceeds $30M a year, isn't it conceivable UVa might prefer a half share of Big 10 money vs. a full share of ACC money ($20M a year) given that the GOR will expire relatively "soon" if this is truly a 100-year decision.

In fact, might the Big 10 guarantee UVA at least ACC money during the GOR period so they don't lose anything in the move?

Also, is there an ACC exit fee now too in addition to the GOR? Or is the exit fee now gone? If both are in effect, how in the world could the ACC enforce both if the exit fee is essentially a liquidated damages provision?

Think about this. The Big 10 could potentially lose Ohio St. and Michigan road games. Ohio St. at UVA could be owned by the ACC. That's why no conference is going to challenge a long term GOR.

I guarantee everyone of these GOR has away out of them. None of these contracts are ironclad. If Texas wants to join the ACC they can. It might cost them a lot of money to do so.

(11-27-2014 09:14 AM)hawghiggs Wrote:  I guarantee everyone of these GOR has away out of them. None of these contracts are ironclad. No contract is ironclad. If Texas wants to join the ACC they can. It might cost them a lot of money to do so.

Fixed it for ya.

The GOR would in my opinion be viewed more favorably than the high exit fee because it is tied to something fixed and knowable. Length of the TV contract and value of the contract. Exit fees create some leeriness because it is hard to calculate the true damage created by a departure especially when a league mitigates by adding other members. Look no further than the Big XII where the harm done by losing members has been larger earnings for the remaining members.

In my opinion people view the GOR incorrectly.

It is spoken of as binding the team to the school. In reality the league has sold the rights contained in the GOR to the network(s) insuring the network's ownership of those rights over the period. The league in return for insuring the network holds those rights guarantees a stream of payments instead of raising the possibility of renegotiating the agreement when the line-up changes. Except that's not even fully true. If the conference replaces with an attractive member the overall value could be increased prompting the league to demand renegotiation.

The GOR has two huge flaws in my opinion.

The first is the provision that the departing school receives none of the income from their game telecasts. That very likely would be ruled to be a punitive penalty that unduly burdens the right of the school to associate with whom it wants to associate with, basically triggering the same issue as excessive departure fees. Why should the remaining members receive the profit portion of the departing member's share?

The second is a practical matter. There are a limited number of actors in the distribution of games. If one of those actors (say ESPN) holds the GOR of schools in one conference and the rights to another conference the network may believe that moving a school is in its benefit and be happy to pay more if they are aligned in the other league. If the league shares rights to a league it may be motivated to move schools to that league to increase its share of broadcasts of that league.

For example if there are 66 games under the Big XII contract and ESPN owns the right to show 33 of those game and Fox owns 33, what happens if two ACC schools move and both on average play a combined 14 home games? ESPN now owns 47 Big XII telecasts plus half of the average 9 road games. At worst for ESPN they own 51 Big XII games and Fox owns 38. Gaining Big XII market share makes it more likely ESPN would reward Big XII for adding the two.

(11-27-2014 08:35 AM)bullet Wrote:  

(11-27-2014 12:28 AM)CougarRed Wrote:  Doesn't a GOR apply only to a school's home games?

In other words, if UVa joined the Big 10, the Big 10 still controls the rights to UVa's conference road games, right?

So adding UVa under ACC GOR is like adding half a school in terms of increased inventory.

If the new Big 10 deal exceeds $30M a year, isn't it conceivable UVa might prefer a half share of Big 10 money vs. a full share of ACC money ($20M a year) given that the GOR will expire relatively "soon" if this is truly a 100-year decision.

In fact, might the Big 10 guarantee UVA at least ACC money during the GOR period so they don't lose anything in the move?

Also, is there an ACC exit fee now too in addition to the GOR? Or is the exit fee now gone? If both are in effect, how in the world could the ACC enforce both if the exit fee is essentially a liquidated damages provision?

Think about this. The Big 10 could potentially lose Ohio St. and Michigan road games. Ohio St. at UVA could be owned by the ACC. That's why no conference is going to challenge a long term GOR.

If that scenario came to be, the GOR would have been challenged in court by VA and the Big 10 before the season started. Likely no resolution would have been reached by the time Ohio St arrived at VA to play the game. If the Big 10 declared that it was their game to televise and receive income from, would they just have their tv partner setup to do that? Would there be a skirmish in the press box?

It applies to every sport. Now, what if the conference a school resides in doesn't sponsor a particular sport? Wrestling, rifle, gymnastics are a few that come to mind.
Could a P5 team join another P5 conference in that sport? How would that impact the GoR?

I'm curious to know how GoRs impact schools' programs individually. As in, what happens if a school has to shutter a conference-sponsored program? There's this punitive vibe to the B12's GoR about the hardships endured by schools if a member up and leaves them or has even a wandering eye; iirc, it's silent on programs folding.

Then I wonder if a school would lay out its finances, tell the conference to either help or get out of the way in order to save what it needs to athletically, and one of those fixes being leaving the conference for one that would earn them more money.

I doubt they are unenforceable, but don't they seem more like Swiss cheese and albino dalmations.

(11-27-2014 08:17 AM)johnbragg Wrote:  Yes a GOR only applies to home games. So Virginia and TExas could bolt the ACC and Big 12 and play in the B1G Ten, with UT @ Michigan on BTN and Nebraska @UT on ESPN or Fox (as a Big 12 package game).

There would be damages from losing 4-5 UT/UVA games per season, but those are exit fee-caliber losses.

The bigger question is the validity of the GOR when a school leaves a conference. I Am Not A Lawyer, but it strikes me as a one-way contract, which Judge Judy says is un-enforceable. I don't see what UT gets out of the GOR if they leave the conference. The contract wasn't frontloaded, so it's not exactly like a music-industry GOR where the artist sells the rights to the song for a $10,000 lump-sum and then it earns $1,000,000 a year in royalties and the artist is out-of-luck.

Maybe it's more like a six-album contract, where PRince has an ironclad obligation to deliver Atlantic (or whoever) 6 albums, and can't release anything until that's complete?

The Grant of Rights strikes me as an exit penalty, rather than a liquidated damages clause. An "exit penalty" is a contract provision primarily designed to discourage breaking the contract. A "liquidated damages provision" says that damages from breaking the contract are major, but hard to calculate exactly, so in advance we're agreeing to estimate that the damages are this much ($1M or $5M or one-years-revenues). Every conference bylaws I've seen since starting to look at conference bylaws and contracts back in 2011 has that language

OMG!
Realignment is in the hands of Judge Judy?

(11-28-2014 08:19 AM)XLance Wrote:  

(11-27-2014 08:17 AM)johnbragg Wrote:  Yes a GOR only applies to home games. So Virginia and TExas could bolt the ACC and Big 12 and play in the B1G Ten, with UT @ Michigan on BTN and Nebraska @UT on ESPN or Fox (as a Big 12 package game).

There would be damages from losing 4-5 UT/UVA games per season, but those are exit fee-caliber losses.

The bigger question is the validity of the GOR when a school leaves a conference. I Am Not A Lawyer, but it strikes me as a one-way contract, which Judge Judy says is un-enforceable. I don't see what UT gets out of the GOR if they leave the conference. The contract wasn't frontloaded, so it's not exactly like a music-industry GOR where the artist sells the rights to the song for a $10,000 lump-sum and then it earns $1,000,000 a year in royalties and the artist is out-of-luck.

Maybe it's more like a six-album contract, where PRince has an ironclad obligation to deliver Atlantic (or whoever) 6 albums, and can't release anything until that's complete?

The Grant of Rights strikes me as an exit penalty, rather than a liquidated damages clause. An "exit penalty" is a contract provision primarily designed to discourage breaking the contract. A "liquidated damages provision" says that damages from breaking the contract are major, but hard to calculate exactly, so in advance we're agreeing to estimate that the damages are this much ($1M or $5M or one-years-revenues). Every conference bylaws I've seen since starting to look at conference bylaws and contracts back in 2011 has that language

OMG!
Realignment is in the hands of Judge Judy?

The cost to leave the ACC is the GOR value plus three years exit fee money. By next year the three years will be about $75 million, the GOR value by it's nature is attenuated to the value of the team leaving versus the year's left in the GOR if you actively seek to break the GOR and like all contracts they can be broken or satisfied with money. The value of UNC, Duke, Notre Dame, and FSU to the overall ACC revenue scheme is astronomical. Clemson, Miami, Louisville, Syracuse, VT, and GT would occupy a secondary level of value. WF and NC State are least valuable in the ACC because they represent redundancy in the ACC footprint and neither have a football or basketball program currently operating at a high national level, as they have in the past. BC and Pitt seem to be floating at a third level with GT sometimes at that third level. (Being choked by a market competitior or the tertiary team in the market hurts).

UNC, ND, FSU, Duke probably have a GOR value to the rest of the league of $70 million or so a year, perhaps more.
Clemson, Miami, Louisville, Syracuse and the old VT (before the current collapse) is probably around $35 million a year.
GT, UVa, Pitt, BC, are probably worth about $25 million a year to the conference.
NC State is probably around $15 million at best. Wake could be a situation where their GOR value is zero since they are 4th in their market, an ideally worth more on paper to other conferences.

If UNC or FSU want to leave the ACC with say 5 years left on the GOR, they better be prepared to come up with at least a half a billion dollars. Yes - half a billion.
Clemson or Miami would need to come up with about $350 million.
GT or Pitt would need to come up with about $300 million or so.

NC State and WF might be allowed to leave for nothing with an adequate P-5 trade from the SEC/B10/B12 since their leaving would not cause a loss inside the current footprint.

No one is leaving the ACC as it is now and keep in mind that as far as MD goes, there was much more friction under the surface than most realize and the friction was 40 years old.

Any future moves will likely entail full scale collusion among the P-5 schools that deal with conference needs, individual school needs, and in-state political situations. Take the B12 for example, the dismantle the B12, at least three of the P-5 must actively participate.

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