CSNbbs

According to the lawsuit, Pac-12 Network says the agreement requires it to provide a certain number of college football games during a season. In 2020, at the height of the COVID-19 pandemic, Pac-12 Network only aired one game; as a consequence, the network says it offered Dish a rebate because that year's football season was shortened.

The rebate was not enough to satiate Dish, Pac-12 Network claims, with the pay TV company demanding additional rebates for the previous two seasons held in 2018 and 2019. According to the lawsuit, Dish claims it is entitled to a refund for those two seasons because of the pandemic as well, even though Pac-12 Network says it provided the agreed upon amount of college football during those seasons.

"The current RSN model is fundamentally broken," Dish executive Brian Neylon"

Pac-12 Network is asking for a trial by jury, with financial compensation to be awarded based on the proximity of damages. It is also asking a court to prevent Dish from withholding fees in the future.


Link
https://www.fiercevideo.com/video/pac-12...mming-fees

"For 2019-2020, the Pac-12 Networks reported revenues of $118M and net operating expenses of $82M."

In 2019-2020, the Pac-12 Network made a profit of $36 million or $3 million for each school. The Pac-12 network issues are distribution (Clearly DISH wants out) and running seven channels an OLD RSN model. Can the Pac-12 Network be part of any negotiation while in a civil lawsuit?


Link
https://pac-12.com/article/2021/05/20/pa...al-results

(01-06-2023 07:28 AM)GTFletch Wrote: [ -> ]Can the Pac-12 Network be part of any negotiation while in a civil lawsuit?

I don't see why not. P12N is the plaintiff, not the defendant. If Amazon buys "PAC 12 Networks Inc" or whatever the name of the corporate shell is, they'll inherit the proceeds of the lawsuit, if any. Or the proceeds of the lawsuit can be assigned in the sale contract to the PAC.

Dish is withholding money due under the old contracts, theoretically to compensate them for their pandemic losses in 2018 and 2019. My non-lawyer guess is that they're not so much operating based on their legal position, but based on the position that theyre better off holding on to the money until it is pried out of their hands.

Sure, Dish is not going to re-up with the P12N linear networks after 2025. But I'd be amazed if those P12N linear networks still exist for anyone after 2025. Those games are going to be on one streaming service or another, maybe branded and sold separately as PAC12, maybe bundled. But it's almost certainly not going to be a channel on your cable system.

I agree however while it is certainly not impossible, it’s going to be an uphill battle trying to convince your buyers otherwise.


Issue #1 Disclosure of litigation details to your buyers
It’s imperative to tell potential buyers about it. Failure to disclose the fact that can lead to a secondary lawsuit post-closing from the buyer for misrepresentation. In this case, the PAC would have to disclose the the details of the not so successful PAC Network. So much for selling the network, they will have to give it away for free.

Issue #2 Anticipation of a lower price offering
Business valuation is incredibly inconvenient because, following valuation, most owners will have already worked out a reasonably just price for the business. Unfortunately, an existing legal problem will give investors leverage to drive down the price.

Issue #3 Be aware of your seller’s responsibilities
If you want a smoother selling experience, it’s key to be aware of your responsibilities as a seller. Some of your responsibilities involve acting in good faith with your buyer, being truthful, and being fair. Responsibilities also cover the preparation of company documents and transactional records – including any and all previous legal history.
The PAC Network is a dumpster fire and I am not so sure they want to share how mismanaged it has been.

Issue #4 Where does buyer due diligence fit in?
Every buyer should conduct due diligence on the business they’re interested in.
OK, so this is why we here that Amazon and ESPN will not over pay! The PAC12 is in a pickle

Issue #5 Factor associated damages to the business
A lawsuit can do all kinds of damage to a business. From affecting your bottom line to tarnishing your brand reputation. Other downsides of litigation are:

A decrease in company value
A negative perception by industry peers


So, to answer the question I asked at the beginning, can you sell during a lawsuit? Yes, I agree with you, probably not wise to do so.

IMHO, this is part of the reason why ESPN & AMAZON have told the PAC-12 they will not over pay for the media rights. It seems like the PAC12 may join the Former BIG EAST P-6 soon enough in the grave yard.

(01-06-2023 08:10 AM)GTFletch Wrote: [ -> ]I agree however while it is certainly not impossible, it’s going to be an uphill battle trying to convince your buyers otherwise.

I don't think this is going to be a problem for a buyer.

Quote:
Issue #1 Disclosure of litigation details to your buyers
It’s imperative to tell potential buyers about it. Failure to disclose the fact that can lead to a secondary lawsuit post-closing from the buyer for misrepresentation. In this case, the PAC would have to disclose the the details of the not so successful PAC Network.

I think everybody already knew that.
To be exact, everybody knows the financial disaster that is the PAC 12 Networks. If the PAC is going to get any money for the studios and talent and graphics and whatnot, then they have to turn over the detailed P12N financials anyway.

Quote:So much for selling the network, they will have to give it away for free.

I think everybody already knows this--but maybe it's that everyone outside
PAC12 HQ and Larry Scott's retirement house knows this.

Quote:Issue #2 Anticipation of a lower price offering
Business valuation is incredibly inconvenient because, following valuation, most owners will have already worked out a reasonably just price for the business. Unfortunately, an existing legal problem will give investors leverage to drive down the price.

But it's not really a legal PROBLEM. IT's that Dish Network owes PAC 12 Networks Inc a bunch of money.

Quote:Issue #3 Be aware of your seller’s responsibilities
If you want a smoother selling experience, it’s key to be aware of your responsibilities as a seller. Some of your responsibilities involve acting in good faith with your buyer, being truthful, and being fair. Responsibilities also cover the preparation of company documents and transactional records – including any and all previous legal history.

Yeah I don't think that's a problem.

Quote:The PAC Network is a dumpster fire and I am not so sure they want to share how mismanaged it has been.

Everybody knows it's a dumpster fire. IT's not like it's unprofitable because LArry Scott was wasting the money on cocaine and hookers, it's unprofitable either because they spend too much money on Olympics-level broadcasts of water polo matches, or because they can't get anyone to carry the network, or both.

All of those problems can be as embarrassing as you can possibly imagine, and it's not Kliavkoff's problem. "Prepare three envelopes."

Quote:Issue #4 Where does buyer due diligence fit in?
Every buyer should conduct due diligence on the business they’re interested in.
OK, so this is why we here that Amazon and ESPN will not over pay! The PAC12 is in a pickle

ESPN and Amazon were going to overpay or not overpay based on their strategies, the details of the value of the PAC content, etc.

The fact that Pac 12 Networks is suing Dish Network for money owed doesn't move the needle on that.

Quote:Issue #5 Factor associated damages to the business
A lawsuit can do all kinds of damage to a business. From affecting your bottom line to tarnishing your brand reputation. Other downsides of litigation are:

A decrease in company value
A negative perception by industry peers

that negative perception is already baked in the cake for PAC 12 Networks Inc.

Quote:So, to answer the question I asked at the beginning, can you sell during a lawsuit? Yes, I agree with you, probably not wise to do so.

Quote:IMHO, this is part of the reason why ESPN & AMAZON have told the PAC-12 they will not over pay for the media rights. It seems like the PAC12 may join the Former BIG EAST P-6 soon enough in the grave yard.

Maybe yes maybe no, but suing Dish NEtwork to get their contracted money isn't really a big factor either way.

Either the Big Ten invites more PAC teams, which triggers teams to jump to the Big 12 as a lifeboat
Or the Big Ten does NOT invite more PAC teams, in which case the PAC survives the currently foreseeable window.

An example of a lawsuit which really IS a big deal effecting a possible merger is the Fox Corporation vs Dominion & Smartmatic lawsuits. Because those are lawsuits AGAINST Fox, not Fox suing someone else, and the scale of the lawsuits--at the max, $4B. that's about 1/4 of Fox' current market cap. (Discussing the merits of the suit is off topic for the forum, but I think we can just focus on the numbers, max $4B against a $16B corporation.)

That's a big reason that News Corp shareholders are objecting to re-merging News and Fox. That lawsuit could end up costing Fox $0 if they win, up to $4B if they lose. That's a huge swing, and it's all downside.

With the PAC 12 Networks vs Dish lawsuit, the swing is all upside--either P12N loses or gives up and gets $0M, or they win and they get millions.

If the uncertainty is a big factor for ESPN or Amazon buying up the PAC 12 Network studios, it's not that hard legally to separate the assets of "Pac 12 Networks Inc." into "Pac 12 Holdings I" which "owns" the lawsuit and proceeds and stays owned by the PAC and "Pac 12 Holdings II" which owns the studios and talent contracts and graphics and IP and whatever, and sell Holdings II to Amazon.

When AOL Time Warner sold World Championship Wrestling to WWF, they set up a shell "Universal Wrestling Corporation" and assigned all the unexpired contracts and unresolved litigation to the UWC shell.

For the Techster and the Johnnie (and TYFYS):

Would this be the TL/DR summary?

1. Dish thinks the Pac-12 came up short on its rebate

2. The Pac-12 is suing Dish because Kliavkoff and his cabal don't believe the league owes this money. And also Dish's claims aren't good for business, especially when trying to negotiate a new media rights deal

(01-06-2023 08:10 AM)GTFletch Wrote: [ -> ]IMHO, this is part of the reason why ESPN & AMAZON have told the PAC-12 they will not over pay for the media rights. It seems like the PAC12 may join the Former BIG EAST P-6 soon enough in the grave yard.

Care to expound on this?

(01-06-2023 09:26 AM)PeteTheChop Wrote: [ -> ]For the Techster and the Johnnie (and TYFYS):

Would this be the TL/DR summary?

Not really. I think you have major parts twisted. I don't think PAC-12 owes Dish a rebate at all. (Not counting the actual pandemic year, which PAC already paid the rebate for)

Quote:1. Dish thinks the Pac-12 came up short on its rebate

I mean Dish is saying that, but I think it's pretty transparent that they're just lying.

Quote:2. The Pac-12 is suing Dish because Kliavkoff and his cabal don't believe the league owes this money.

0

IANAL, but I don't think Dish has a legal claim here. They're claiming "pandemic losses" for 2018 and 2019, when there was no pandemic. GTFOWTBS.

I figure that Dish is losing money on the PAC 12 Networks, wants to dump them the way they dumped the RSNs when those contracts came up for renewal. But the contracts run through 2024 like all of the P12N contracts, so Dish is making basically fraudulent claims about "pandemic rebates" and just not paying the PAC 12 Networks the money specified in the contract.

What's the PAC 12 N going to do, sue them? That will take years, and worst case scenario, Dish Network pays the money they owed in the first place. More likely, Dish pays less than 100 cents on the dollar in 2026 or so.

Quote:And also Dish's claims aren't good for business, especially when trying to negotiate a new media rights deal

That's kind of something we made up on this board, I think.

(01-06-2023 09:41 AM)johnbragg Wrote: [ -> ]

(01-06-2023 09:26 AM)PeteTheChop Wrote: [ -> ]For the Techster and the Johnnie (and TYFYS):

Would this be the TL/DR summary?

Not really. I think you have major parts twisted. I don't think PAC-12 owes Dish a rebate at all. (Not counting the actual pandemic year, which PAC already paid the rebate for)

Quote:1. Dish thinks the Pac-12 came up short on its rebate

I mean Dish is saying that, but I think it's pretty transparent that they're just lying.

Quote:2. The Pac-12 is suing Dish because Kliavkoff and his cabal don't believe the league owes this money.

0

IANAL, but I don't think Dish has a legal claim here. They're claiming "pandemic losses" for 2018 and 2019, when there was no pandemic. GTFOWTBS.

I figure that Dish is losing money on the PAC 12 Networks, wants to dump them the way they dumped the RSNs when those contracts came up for renewal. But the contracts run through 2024 like all of the P12N contracts, so Dish is making basically fraudulent claims about "pandemic rebates" and just not paying the PAC 12 Networks the money specified in the contract.

What's the PAC 12 N going to do, sue them? That will take years, and worst case scenario, Dish Network pays the money they owed in the first place. More likely, Dish pays less than 100 cents on the dollar in 2026 or so.

Quote:And also Dish's claims aren't good for business, especially when trying to negotiate a new media rights deal

That's kind of something we made up on this board, I think.

I think this is bigger than DISH making excuses not to pay.

https://en.wikipedia.org/wiki/Dish_Netwo...rogramming

I think DISH wants out of the contract, and is using this as a means to that end.

Also from that Wikipedia article: "DISH has been sued and countersued dozens of times. DISH argues that effective litigation is important to corporate operations."

So the PAC may win the battle but lose the war.

Two things come to mind:

1) I'm surprised I haven't heard about more of these situations. The 2020 cancellations created a lot of disruption to conference/network contracts, so I would expect more of these disputes, but I have heard of very few of them.

2) My gut feeling is that this is another indicator of the weakness of the PACN, and of the PAC more generally. In a situation where a network finds its relationship with a conference profitable, I would expect both parties to be able to reach an amicable agreement, rather than the situation ending up in court.

Maybe this explains the seeming lack of disputes related to point #1.

(01-06-2023 10:10 AM)Skyhawk Wrote: [ -> ]

(01-06-2023 09:41 AM)johnbragg Wrote: [ -> ]

(01-06-2023 09:26 AM)PeteTheChop Wrote: [ -> ]For the Techster and the Johnnie (and TYFYS):

Would this be the TL/DR summary?

Not really. I think you have major parts twisted. I don't think PAC-12 owes Dish a rebate at all. (Not counting the actual pandemic year, which PAC already paid the rebate for)

Quote:1. Dish thinks the Pac-12 came up short on its rebate

I mean Dish is saying that, but I think it's pretty transparent that they're just lying.

Quote:2. The Pac-12 is suing Dish because Kliavkoff and his cabal don't believe the league owes this money.

0

IANAL, but I don't think Dish has a legal claim here. They're claiming "pandemic losses" for 2018 and 2019, when there was no pandemic. GTFOWTBS.

I figure that Dish is losing money on the PAC 12 Networks, wants to dump them the way they dumped the RSNs when those contracts came up for renewal. But the contracts run through 2024 like all of the P12N contracts, so Dish is making basically fraudulent claims about "pandemic rebates" and just not paying the PAC 12 Networks the money specified in the contract.

What's the PAC 12 N going to do, sue them? That will take years, and worst case scenario, Dish Network pays the money they owed in the first place. More likely, Dish pays less than 100 cents on the dollar in 2026 or so.

Quote:And also Dish's claims aren't good for business, especially when trying to negotiate a new media rights deal

That's kind of something we made up on this board, I think.

I think this is bigger than DISH making excuses not to pay.

https://en.wikipedia.org/wiki/Dish_Netwo...rogramming

I think DISH wants out of the contract, and is using this as a means to that end.

Also from that Wikipedia article: "DISH has been sued and countersued dozens of times. DISH argues that effective litigation is important to corporate operations."

So the PAC may win the battle but lose the war.

I remember reading something a while back. In the South, a handshake is the deal and the contract is a set agreement. In New York, the contract is just the beginning of negotiations.

(01-06-2023 10:10 AM)Skyhawk Wrote: [ -> ]I think this is bigger than DISH making excuses not to pay.

https://en.wikipedia.org/wiki/Dish_Netwo...rogramming

I think DISH wants out of the contract, and is using this as a means to that end.

I very much agree with you there.

But I don't think the PAC has much incentive to let Dish out of the contract before it expires. Even if they got paid in full tomorrow in return for voiding the last year of the DISH contract, it's not like hte PAC can throw together a profitable arrangement for one year.

Quote:Also from that Wikipedia article: "DISH has been sued and countersued dozens of times. DISH argues that effective litigation is important to corporate operations."

Sounds like DISH has an operating philosophy of choosing to honor contracts, or go to litigation, depending on the calculations of the moment.

(01-06-2023 10:20 AM)quo vadis Wrote: [ -> ]Two things come to mind:

1) I'm surprised I haven't heard about more of these situations. The 2020 cancellations created a lot of disruption to conference/network contracts, so I would expect more of these disputes, but I have heard of very few of them.

2) My gut feeling is that this is another indicator of the weakness of the PACN, and of the PAC more generally. In a situation where a network finds its relationship with a conference profitable, I would expect both parties to be able to reach an amicable agreement, rather than the situation ending up in court.

Maybe this explains the seeming lack of disputes related to point #1.

Right. For ESPN, for the NFL, for the Big Ten, SEC, etc etc these are profitable long term relationships, so you manage the temporary economic problems. Maybe there's conflict, but you don't go nuclear in public.

For the RSNs, basically including the PAC networks as an RSN group, it's not a profitable long term relationship, so you get what you can while you can.

(01-06-2023 10:20 AM)quo vadis Wrote: [ -> ]Two things come to mind:

1) I'm surprised I haven't heard about more of these situations. The 2020 cancellations created a lot of disruption to conference/network contracts, so I would expect more of these disputes, but I have heard of very few of them.

2) My gut feeling is that this is another indicator of the weakness of the PACN, and of the PAC more generally. In a situation where a network finds its relationship with a conference profitable, I would expect both parties to be able to reach an amicable agreement, rather than the situation ending up in court.

Maybe this explains the seeming lack of disputes related to point #1.

This an old story. It came out in October. The Pac-12 owed Dish for 2020 but not for 2018 & 2019. I cannot see DISH winning this in court and I don't know why they would withhold payments.

The Pac-12 Network business model is a disaster. It sucks. But that is not relevant to this issue between DISH and the Pac-12. This is a payment dispute. The Pac-12 Network infrastructure and production quality is good. That is relevant to Amazon and Apple, both of whom lack a network infrastructure. The Pac-12 Network will most likely end up being owned or leased to Amazon or Apple in the future. The seven-channel Network will disappear from Linear TV. IMO.

(01-06-2023 07:47 AM)johnbragg Wrote: [ -> ]

(01-06-2023 07:28 AM)GTFletch Wrote: [ -> ]Can the Pac-12 Network be part of any negotiation while in a civil lawsuit?

I don't see why not. P12N is the plaintiff, not the defendant. If Amazon buys "PAC 12 Networks Inc" or whatever the name of the corporate shell is, they'll inherit the proceeds of the lawsuit, if any. Or the proceeds of the lawsuit can be assigned in the sale contract to the PAC.

Dish is withholding money due under the old contracts, theoretically to compensate them for their pandemic losses in 2018 and 2019. My non-lawyer guess is that they're not so much operating based on their legal position, but based on the position that theyre better off holding on to the money until it is pried out of their hands.

Sure, Dish is not going to re-up with the P12N linear networks after 2025. But I'd be amazed if those P12N linear networks still exist for anyone after 2025. Those games are going to be on one streaming service or another, maybe branded and sold separately as PAC12, maybe bundled. But it's almost certainly not going to be a channel on your cable system.

Part of why bigger companies repackage smaller companies under new names after buying those smaller companies is so they can try to get the lawsuits against the smaller company dismissed and/or invalidate the bad contracts the smaller company made. I suspect this legal strategy doesn’t work very often, but some companies definitely try it.

(01-06-2023 09:26 AM)PeteTheChop Wrote: [ -> ]... And also Dish's claims aren't good for business, especially when trying to negotiate a new media rights deal

They aren't good for Dish's opportunities to get future P12N media rights, but since Dish doesn't likely want to have those rights, that is neither here nor there.

The valuation of the P12N content when transitioned into some streaming platform wouldn't seem to be substantially affected by Dish trying to grab some "Minority Report" style "pre-crime" pandemic rebate.

Surely the contracts had a "force majeure" clause.

The PAC could cite governmental prevention of public gatherings, cite force majeure, and tell Dish to pound sand.

The PAC should have not given the rebate as that expresses some culpability.

I replied to the wrong post, but what I want to engage is the idea that this development, in isolation, is major bad news for the PAC

Ask yourself, honestly: A week ago, did YOU think that the PAC 12 Networks were a valuable asset for the PAC that they'd get serious money for?

IF so, then yes, this is an indicator that the current P12N distributors want out of that arrangement, badly and that the P12N is a bad business. (The rest of us knew that already)

IF not, then this isn't that big a deal either way.

In fact, if your estimate of the value of P12N was low enough, it might even be a positive development--rather than being valued at "pretty close to nothing", there's a big asset on their balance sheet marked "DISH Network Account: Overdue, past 90 days, $MM millions"

(01-06-2023 01:33 PM)The Sicatoka Wrote: [ -> ]Surely the contracts had a "force majeure" clause.

The PAC could cite governmental prevention of public gatherings, cite force majeure, and tell Dish to pound sand.

The PAC should have not given the rebate as that expresses some culpability.

Not really. The contracts had guarantees that the Pac 12 Networks would carry N number of football games, M games including each PAC 12 team, P basketball games, Q including each team, R live sporting events total per year. IF those numbers weren't met, that reduced the amounts that DISH (or whatever distributor) is obliged to pay.

I mean, the PAC could have told DISH to pound sand, and DISH would have withheld the money from the PAC's 2021 and 2022 and 2023 payments -- which they're doing anyway.

Force majeure doesn't always mean "screw you sucker, no refunds".

(01-06-2023 01:33 PM)The Sicatoka Wrote: [ -> ]Surely the contracts had a "force majeure" clause.

The PAC could cite governmental prevention of public gatherings, cite force majeure, and tell Dish to pound sand.

The PAC should have not given the rebate as that expresses some culpability.

Not really. The contracts had guarantees that the Pac 12 Networks would carry N number of football games, M games including each PAC 12 team, P basketball games, Q including each team, R live sporting events total per year. IF those numbers weren't met, that reduced the amounts that DISH (or whatever distributor) is obliged to pay.

I mean, the PAC could have told DISH to pound sand, and DISH would have withheld the money from the PAC's 2021 and 2022 and 2023 payments -- which they're doing anyway.

Force majeure doesn't always mean "screw you sucker, no refunds".