RE: Compensation for AAC schools resulting from UConn's departure & time table.
.
In this thread, there seem to be a variety of opinions about what the AAC and ESPN have been discussing or negotiating in the past three weeks.
We seem to be discussing at least three interrelated topics - - or possible topics and speculations - - at the same time:
--------------------------------------------------------------------------------
I. How UConn's $17 million penalty payment will be allocated to the AAC schools.
The main topic of this thread is "Compensation for AAC schools resulting from UConn's departure," with the side topic being the timetable for such compensation.
The compensation discussion first arose with UConn's $17 million penalty payment agreement, which was announced in mid-2019. The standard penalty was $10 million, by contract, and the remaining $7 million of the penalty was to be paid for UConn's earlier than contractually agreed (i.e., 1 year) exit.
If the $17 were evenly split among the 11 membership slots (10 + Navy/Wichita State), the amount per slot would be 1/11 * $17,000,000 = $1.54 million per all sports school, to be distributed over the next 6 years (amounting to ~ $257,000 annually per school, on average).
Since it is a penalty, the $17 million should come from UConn, and not from ESPN. If the $17 million were to come from ESPN, it would not penalize UConn in any way for their early exit.
QUESTION: Is UConn actually going to be paying $17 million to the AAC schools ($257,000 per school, per year), or not?
If not, then what amount is UConn going to be paying, and how much $$ will each AAC school be receiving over the next 6 years?
--------------------------------------------------------------------------------
II. How will the $83 million that ESPN allocated for UConn over the 12 year broadcasting agreement be dealt with, given UConn's departure?
Interpretation A: Some have suggested that there will be no change at all to the seven million per school that ESPN will pay for their AAC broadcasting rights. In that case, ESPN's total payment to the AAC over 12 years would decrease from $1 billion to $917 million, with ESPN pocketing UConn's $83 million share over those 12 years.
Others have suggested that the amount ESPN agreed to pay (~$1 billion over 12 years) was to the AAC itself, rather than to the AAC member schools. In that case, they've argued, the 1/12th share that would have gone to UConn would be "divvied up" amongst the 10 remaining all-sports schools and Navy/Wichita State.
Still others have suggested that the $83 million that would have gone to UConn will be held in some kind of escrow status, and that if/when the AAC adds a 12th school (or FB & non-FB schools), that $83 million would simply be allocated to them.
Right now, it doesn't seem that anyone knows the answer. All three interpretations continue to be discussed as if they are correct. Aresco's office could have clarified this, but seemingly hasn't. As a result, the answer to this question isn't clear to the readers of this message board.
--------------------------------------------------------------------------------
NOTE: It's essential to avoid confounding the topic of UConn's $17 million penalty payments and the entirely separate topic of how ESPN's annual payments of seven million per school over 12 years might be affected by UConn's departure.
--------------------------------------------------------------------------------
III. What are the topics that the AAC and ESPN have been discussing, and apparently negotiating about over the past three weeks?
Interpretation A: They have simply been discussing how UConn's departure will impact ESPN's broadcasting schedule, and the fact that ESPN might not lose 1/12th of their AAC FB viewership, due to the poor quality of UConn FB. If so, it's possible that ESPN might not lower their payments to the AAC by the full $83 million that would have been allocated to UConn, but would distribute a share of this amount to each AAC school.
Interpretation B: The discussions have evolved into a minor revision of the 12 year AAC-ESPN broadcasting agreement, with the likely result being that the amounts distributed to the AAC schools will be recalculated, factoring in both the $17 million in penalties to be paid by UConn and minor adjustments to the amount that ESPN will be paying the AAC schools. There might be some remote possibility that ESPN would assist in the financial arrangements for UConn's $17 penalty payments. However, any changes in the amounts paid per school would be relatively minor, and there would be no significant revisions to the contract.
Interpretation B: The discussions have evolved into a slightly more substantive revision of the 12 year AAC-ESPN broadcasting agreement. The fundamentals of the 12 year contract would remain roughly the same, and there might be a few relatively minor upward or downward adjustments in the number of games to be broadcasted, broadcast times, flexibility to broadcast games, or payments to the AAC.
-One possibility is that ESPN might be seeking various concessions from the AAC, due to the loss of the UConn region's viewership, and to decrease their commitment to the AAC from $1 billion to $917 million over 12 years.
-Another possibility is that, in the wake of the MWC's new agreement with CBS & Fox, ESPN is offering to adjust slightly upward the amounts to be paid to the AAC schools, or the number of featured AAC games to be broadcasted, or both of the above.
-A third possibility is that ESPN might be offering to increase their payments to the AAC slightly, in return for more flexibility in broadcasting channels (ESPN, ESPNU, ESPN+,...), and/or times, or possibly showing some willingness to broadcast more games on the main ESPN channels in return for various concessions that the AAC might suggest.
Interpretation C: The discussions have evolved into a somewhat more substantive revision of the 12 year AAC-ESPN broadcasting agreement. ESPN might be trying to restructure the agreement in any of a number of ways. The net outcome might not be highly noticeable on a year over year basis, but ESPN and the AAC might each try to make various adjustments in payments and broadcasting details, or the provisions regarding any future adjustments (additions or subtractions) in the number of AAC schools.
Interpretation D: The discussions may be evolving into what will amount to a full or major renegotiation of the AAC-ESPN broadcasting agreement.
-The AAC might be willing to renegotiate certain aspects of the broadcasting agreement if ESPN has signaled any willingness to sweeten the deal, now that the MWC has gotten such a large upward adjustment in their media payments, with the possibility of another upward adjustment in 2006.
--For example, it might be possible that ESPN has signaled a willingness to pay the contractually agreed $83 million per year to the AAC (despite the loss of UConn) for all 12 years, or at least until UConn is replaced, or they might with to put certain incentives into the contract that will increase the likelihood that UConn FB will be replaced with a FB program that will boost ESPN's income significantly higher.
--ESPN might (possibly) have some interest in renegotiating the contract, due to any concerns they might have about the loss of UConn and viewership in the northeastern region, potential additions or subtractions to the AAC membership, and related issues.
--Though it seems unlikely, if the discussions evolve into a full-scale renegotiation, there might even be some inclination to adjust the duration of the broadcasting agreement.
--------------------------------------------------------------------------------
Finally, there is some possibility that all three of these topics are being discussed by ESPN and the AAC Commissioner - - just as they are also being discussed in this thread and related threads.
Does this summarize the situation fairly well from your standpoint, and if not, how else might you summarize what you think might be going on?
(This post was last modified: 02-17-2020 03:43 PM by jedclampett.)
|