(07-31-2021 09:04 PM)MinerInWisconsin Wrote:  

(07-31-2021 07:47 PM)Jared7 Wrote:  

(07-31-2021 06:05 PM)bullet Wrote:  https://static.big12sports.com/custompag...bylaws.pdf
You are reading only part-its simply 2 year's distributions:
"...3.4 Buyout Amount. Any Withdrawing Member shall pay to the Conference a commitment
buyout fee (the “Buyout Amount”) in an amount equal to the sum of the amount of
distributions that otherwise would be paid to the Member during the final two years of
its membership in the Conference. The Withdrawing Member shall be deemed to have
agreed to forfeit all distributions of any type that otherwise would have been made to
the Withdrawing Member during the Interim Period (the “Distribution Withholding”)
and the Conference shall not pay the Distribution Withholding to the Withdrawing
Member. A Withdrawing Member agrees to pay to the Conference the amount by
which the Buyout Amount exceeds the Distribution Withholding, with such payment
to be made not later than the Effective Date. In addition,
• if (A) by legal action or otherwise, a Withdrawing Member, or any other person or
entity, attempts to challenge or oppose or interfere with, or challenges or opposes
or interferes with, (i) the payment of the Buyout Amount by the Withdrawing
Member or the withholding of the Distribution Withholding by the Conference,
(ii) the enforcement by the Conference of its rights under the Grant of Rights
Agreement or the performance by the Withdrawing Member of its obligations
under the Grant of Rights Agreement, or (iii) the right of the Conference’s telecast
partners to televise games of the Withdrawing Member under the terms of the Grant
of Rights Agreement during its then-remaining term; or (B) for any other reason
the Conference’s telecast partners are unable to produce and telecast games of
the Withdrawing Member during the then-remaining term of the Grant of Rights
Agreement or the Conference is unable to realize the revenues relating to those
games from its telecast partners,
• then the Members agree that such actions, in breach of the Withdrawing Member’s
agreements in these Bylaws, cause additional damage to the Conference and
therefore that the Buyout Amount shall be increased by, and shall also include, and
the Withdrawing Member shall be obligated to pay to the Conference immediately
upon the occurrence of any of the foregoing events, the amount of all actual loss,
damage, costs, or expenses whatsoever (including but not limited to lost revenues,
damage to reputation and public image, and damage to relationships with related
parties) incurred by the Conference or any of its remaining Members directly or
indirectly related to that challenge or opposition, whether economic or otherwise.
Each of the Members agrees that Withdrawal of a Member contrary to its
commitment to the Conference and the other Members pursuant to Section 3.1
above would cause damage and financial hardship to the Conference and the other
Members without regard to the continued enforcement of the Grant of Rights
Agreement, that the financial consequences to the Conference and its remaining
Members cannot be measured or estimated with certainty at this time, and that
the payment of the Buyout Amount is a reasonable method of compensating the
Conference and the other Members for such damage and financial hardship and
shall not be construed as a penalty."

Thanks for providing some of the relevant portions of the Big 12 agreement. You left out some other important provisions. Article 1.2.3 provides that all members agreed (in 2012) to remain members of the Big 12 for 99 years. Clearly, UT is in breach of that agreement. Article 3.1 provides that any allowed Withdrawal does not abrogate the separate Grant of Rights Agreement - which extends to 2025. And 3.1 further provides that no Withdrawing Member shall be entitled to any revenues or benefits after effective Withdrawal. And Article 3.2 provides that a 12-hour notice applies and that Members are required to firmly reject any offers made immediately. UT is clearly in breach of both of those provisions. And Article 3.3 defines what constitutes Notice of Withdrawal and what a withdrawal event is. Which has clearly occurred this week.

Then, Article 3.3 defines what the Interim Period was expected to be (18 months following Notice of Withdrawal or a withdrawal event ending on June 30). And provides that only a super-majority of disinterested directors can change it (6 of the 8 remaining schools).

Then, we get to the part you quoted. You are correct that it states that it is the final 2 years of revenues (approximately $80 million). But it also states that UT agrees to forfeit all revenue distributions in the Interim Period - which started this week. And that the conference shall not pay the Distribution Withholdings. It then goes on and states that it might be more if the GOR is violated and that UT agrees to pay the higher amount and that it is reasonable and not a penalty. And it further states that that amount can't be determined (in 2012).

To me (and I'm just a fan and don't represent anyone but myself), that reads just as I said. The Big 12 can start withholding all payments of revenues starting next June and continuing until UT is allowed to leave per the separate GOR. Indeed, the 2-year provision gives UT a good argument because it makes it somewhat ambiguous. But that's because UT wanted to rub everyone's face in it for 2 extra years. And because, back in 2012, no one contemplated a school being so stupid as to give 4 years notice rather than the anticipated 18 months.

In my view, the Big 12 is within its rights to start withholding immediately and to continue to withhold until 2025 per the GOR. For 4 years, that's $160 million. Each. Only if UT can induce a super-majority of the other 8 schools can that change. Maybe they can. I anticipate settlement negotiations and an agreed final figure. In my view, that's at least 80 million and probably much more if UT really really really wants to leave early. It isn't "simply" anything. It's arguable and potentially well in excess of the amounts I'm guessing at.

Just curious, if the Big 12 withholds distribution starting now, what incentive do OU and Texas have to play in the Big 12 next year?

That's why everybody needs to settle in the next 6 months. Otherwise you push OU and UT out and only get 1 year's distributions, risk ESPN/Fox cutting your contract and then have to sue a sovereign entity for any losses. From OU and UT's point of view, if you don't win on sovereign immunity you are at risk for a big liability for violating the GOR.

Reality is that nobody has paid the full exit fee in any of these cases. They always settle for less.

But we've never had a case where an existing contract got reduced after a school leaving. Usually they go up!

(07-31-2021 09:36 PM)bullet Wrote:  The school is obligated to pay the extra if withholding doesn't equal 2 years. So while the Big 12 can begin withholding immediately, and maybe can continue for 4 years, they have to give 2 years of it back if they do so.

Which article says that? Especially if the "extra" is actual damages, loss of reputation, loss of public image, costs and expenses related to litigation or legal action, damage to relationships with telecast partners or additional damages due to breaches of the 99-year commitment, the 12-hour notice provision or the failure to immediately reject any offers from third parties. The Buyout Amount can be increased if any financial hardship is incurred at all And there's no "giving it 'back.'" It's the Big 12's money pursuant to the Telecast Agreements and the GOR. It gets paid to the Big 12 and that's where it stays.

(07-31-2021 09:40 PM)bullet Wrote:  That's why everybody needs to settle in the next 6 months. Otherwise you push OU and UT out and only get 1 year's distributions, risk ESPN/Fox cutting your contract and then have to sue a sovereign entity for any losses. From OU and UT's point of view, if you don't win on sovereign immunity you are at risk for a big liability for violating the GOR.

Reality is that nobody has paid the full exit fee in any of these cases. They always settle for less.

But we've never had a case where an existing contract got reduced after a school leaving. Usually they go up!

Indeed. A negotiated settlement is in everyone's interest. UT needs to make an offer. Otherwise, if they leave early without a settlement, they'll owe much more. And if ESPN/Fox cut the contract, that's a LOT more damages (which are explicitly mentioned in the Articles).

The reality is that schools have often paid the full exit fees. TCU paid the full exit fee to the Big East ($5 million); others have too. In cases where settlements have occurred for less, there were other mitigating factors and no blatant breaches of 99-year commitments and 12-hour-notice provisions

We've had many cases of telecast contracts going down (albeit after the period or because of clauses allowing for re-sets). The WAC was essentially destroyed; C-USA's monies went down.

There is a universally recognized exception for sovereign immunity defenses in cases where it involves commercial activities.

(07-31-2021 09:54 PM)Jared7 Wrote:  

(07-31-2021 09:36 PM)bullet Wrote:  The school is obligated to pay the extra if withholding doesn't equal 2 years. So while the Big 12 can begin withholding immediately, and maybe can continue for 4 years, they have to give 2 years of it back if they do so.

Which article says that? Especially if the "extra" is actual damages, loss of reputation, loss of public image, costs and expenses related to litigation or legal action, damage to relationships with telecast partners or additional damages due to breaches of the 99-year commitment, the 12-hour notice provision or the failure to immediately reject any offers from third parties. The Buyout Amount can be increased if any financial hardship is incurred at all And there's no "giving it 'back.'" It's the Big 12's money pursuant to the Telecast Agreements and the GOR. It gets paid to the Big 12 and that's where it stays.

Last sentence in first paragraph says they have to make up any amount by which the buyout is more than the amount withheld.

(07-31-2021 10:19 PM)bullet Wrote:  Last sentence in first paragraph says they have to make up any amount by which the buyout is more than the amount withheld.

That means the opposite - if the Buyout Amount is greater than the amount withheld, UT must pay that amount to the Big 12. There is no clause in the by-laws saying that the Big 12 must pay UT anything.

(07-31-2021 06:08 PM)Shannon Panther Wrote:  

(07-31-2021 10:05 AM)BruceMcF Wrote:  

(07-31-2021 09:43 AM)Jared7 Wrote:  The "normal" way for expansion and realignment to happen is that conferences/schools hire media companies to have those sorts of conversations with ESPN (and other networks) which gives ESPN (and others) plausible deniability. There apparently was no such buffer this time.

I would be unsurprised if rather than being a misunderstanding, it was a legally unproveable understanding on Aresco's part. ESPN has good media law lawyers, and Aresco is the one with the unfortunate responsibility to convince the AAC Presidents to go along.

It might be harder to find media consultants who are willing to be risk holding the bag for tortious interference when ESPN points to their paper trail and proves that ESPN stays on the legal side of the line. After all, the consultant's expertise in what they can and cannot legally say is part of what they are being hired for.

I was specifically speaking to the Texas, OU move. I stand by my original statement. ESPN has a fiduciary responsibility to their partner the SEC. If the SEC initiated the contact, they most likely had a non-disclosure agreement in place before they ever broached the subject. Those two combined would make ESPN liable to the SEC if they failed to negotiate in good faith, or disclosed the potential move.

But the claim is that ESPN engaged in tortious interference by initiating the action of the AAC and offering to pay the AAC more if it succeeded in recruiting Big12 schools, and the ESPN do the same with the SEC and OK/TX was stated to be a suspicion. If both statements are warranted, then substantial evidence (though not necessarily conclusive evidence) exists for the first, but not for the second.

Quote: The AAC may be a separate issue altogether. I am not sure if ESPN really told Aresco to go get them, or that was Aresco's interpretation. ESPN has the same fiduciary responsibility to the AAC that they have to the SEC, ACC, and anyone else that they have contracts with. Bolwsby is butthurt because he got blindsided by this. But if the SEC has any lawyers worth their salt, there was an NDA that preceded any discussions. If that is the case, Bowlsby's got nothing. And for all of you who will ask, "What about their responsibility to the Big XII?" They have yet to breach any term of their CURRENT contract. Their responsibility to the Big XII begins and ends there. They have already declined to hold early renewal talks for their broadcast rights. ESPN is not responsible for the Big XII after the expiration of their current deal. Even if this was all ESPN's doing, from start to finish, as long as they don't violate the terms of their current agreement, they are not guilty of tortious interference.

So far, Texas and Oklahoma have stated they will fulfill the terms of the current GOR. The SEC has not offered membership until that is fulfilled. Where is your tortious interference? You can't claim the loss injured you if they fulfill their obligations. Not anymore than Toyota could sue GM if they hired away some of their best engineers after their current agreements are complete.

The argument would surely be that it is improper for ESPN to be engaged in that activity, and whether there are precedents for a purchaser with a dominant market position to seek to destroy one of its own suppliers for its commercial benefit is something for a lawyer to answer, but it seems that ESPN would be under more jeopardy than for the AAC or the SEC to seek to destroy one of their market competitors.

The analogy, after all, is not Toyota and GM, it's a steelmaker that has a supply contract with Toyota alleging that Toyota is offering to pay a rival to hire away the steelmaker's quality control team, to prevent the steelmaker from meeting the quality standard specified in the contract so the supply contract can be terminated early. Which is the kind of thing that seems like it could be found to be tortious interference (at least, for Toyota USA ~ it's a common law economic tort, and Japan is not a common law country).

Quote: Let's not confuse right with legal here. The issue here is akin to a girl telling you she will go steady with you over the summer and then she tells you in July when school starts again, you aren't her steady. You would feel betrayed for sure, but did she promise you anything beyond the summer? Did Texas and OU promise anything beyond the current GOR? No and no.

However it is certainly the case that there doesn't have to be a standing agreement not to engage in an action in order for the action to be found to be improper.

Whether the court would agree with the argument of the Big12 that such behavior by one of their contractual buyers is improper is something that can be found out by bringing the suit, but it seems likely that the primary goal is to prevent the alleged interference from occurring rather than being paid damages if it does.

(07-31-2021 08:56 PM)quo vadis Wrote:  But if there are no schools left, who has been harmed? The administrative apparatus? Bowlsby and his colleagues at the B12 office who are out of a job?

I just don't know.

That's why I mentioned the 1 contract thing. It's "Big 12 Conference, LLC*" (*or whatever the legal business name is) that collects hundreds of millions in revenue selling the games of it's members to TV (And sponsorship deals, and NCAA Units, etc).

By breaking up the Big 12, that is definitely "harm" to Big 12 LLC, and the easiest thing in the world to prove.


But like I said, it's moot because it would never get that far, especially now that the Big 12 called ESPN out on it. It remains financially stupid to dissolve the Big 12.

(Plus, like, if you're the last team to get a conference offer, make a plan to file the lawsuit if someone proposes dissolving the league. If ESPN is about to pull it off, you double-cross them back and file the lawsuit; Pick $8 million a year in revenue from the AAC or go for the $630 or $420 left from ESPN instead? Easy call there).

(08-01-2021 12:52 AM)JSchmack Wrote:  

(07-31-2021 08:56 PM)quo vadis Wrote:  But if there are no schools left, who has been harmed? The administrative apparatus? Bowlsby and his colleagues at the B12 office who are out of a job?

I just don't know.

That's why I mentioned the 1 contract thing. It's "Big 12 Conference, LLC*" (*or whatever the legal business name is) that collects hundreds of millions in revenue selling the games of it's members to TV (And sponsorship deals, and NCAA Units, etc).

By breaking up the Big 12, that is definitely "harm" to Big 12 LLC, and the easiest thing in the world to prove.

Right, but who would be breaking it up? ESPN can't break up the Big 12, only member schools can do that, by choosing to leave. Like if I have a girlfriend and you ask her out, tempting her with a fat wallet and a nice car, and she says yes and I accuse you of breaking up my relationship. You didn't do that, my ex-girlfriend did when she decided to dump me for you.

And if the schools are gone, who exactly is "Big 12 LLC"? If it's just a scrap of paper, a corporate charter sitting in a lock box somewhere in Dallas, well I don't think the scrap of paper will file a suit. It would seem that it would have to be the administrative apparatus. But if the schools are gone ....

I just don't know. I think my head is spinning, LOL.

Hopefully, a deal can be reached, say OU and TX each pay $20m a year for the next five years, about a $100m total each, and they are gone now.

(07-31-2021 10:18 PM)Jared7 Wrote:  

(07-31-2021 09:40 PM)bullet Wrote:  That's why everybody needs to settle in the next 6 months. Otherwise you push OU and UT out and only get 1 year's distributions, risk ESPN/Fox cutting your contract and then have to sue a sovereign entity for any losses. From OU and UT's point of view, if you don't win on sovereign immunity you are at risk for a big liability for violating the GOR.

Reality is that nobody has paid the full exit fee in any of these cases. They always settle for less.

But we've never had a case where an existing contract got reduced after a school leaving. Usually they go up!

Indeed. A negotiated settlement is in everyone's interest. UT needs to make an offer. Otherwise, if they leave early without a settlement, they'll owe much more. And if ESPN/Fox cut the contract, that's a LOT more damages (which are explicitly mentioned in the Articles).

The reality is that schools have often paid the full exit fees. TCU paid the full exit fee to the Big East ($5 million); others have too. In cases where settlements have occurred for less, there were other mitigating factors and no blatant breaches of 99-year commitments and 12-hour-notice provisions

We've had many cases of telecast contracts going down (albeit after the period or because of clauses allowing for re-sets). The WAC was essentially destroyed; C-USA's monies went down.

There is a universally recognized exception for sovereign immunity defenses in cases where it involves commercial activities.

A&M, Missouri, Nebraska, Colorado and Maryland all left early during a contract. All paid 75% or less of the defined exit fees. I think it was about 50% except for Missouri and they offered a lower amount if they stayed another year before moving. WVU and TCU didn't give the required notice (because A&M & Missouri didn't).

(08-01-2021 12:47 PM)bullet Wrote:  

(07-31-2021 10:18 PM)Jared7 Wrote:  

(07-31-2021 09:40 PM)bullet Wrote:  That's why everybody needs to settle in the next 6 months. Otherwise you push OU and UT out and only get 1 year's distributions, risk ESPN/Fox cutting your contract and then have to sue a sovereign entity for any losses. From OU and UT's point of view, if you don't win on sovereign immunity you are at risk for a big liability for violating the GOR.

Reality is that nobody has paid the full exit fee in any of these cases. They always settle for less.

But we've never had a case where an existing contract got reduced after a school leaving. Usually they go up!

Indeed. A negotiated settlement is in everyone's interest. UT needs to make an offer. Otherwise, if they leave early without a settlement, they'll owe much more. And if ESPN/Fox cut the contract, that's a LOT more damages (which are explicitly mentioned in the Articles).

The reality is that schools have often paid the full exit fees. TCU paid the full exit fee to the Big East ($5 million); others have too. In cases where settlements have occurred for less, there were other mitigating factors and no blatant breaches of 99-year commitments and 12-hour-notice provisions

We've had many cases of telecast contracts going down (albeit after the period or because of clauses allowing for re-sets). The WAC was essentially destroyed; C-USA's monies went down.

There is a universally recognized exception for sovereign immunity defenses in cases where it involves commercial activities.

A&M, Missouri, Nebraska, Colorado and Maryland all left early during a contract. All paid 75% or less of the defined exit fees. I think it was about 50% except for Missouri and they offered a lower amount if they stayed another year before moving. WVU and TCU didn't give the required notice (because A&M & Missouri didn't).

The one key difference here is the grant of rights. Those other exits were just negotiated on exit fees. GOR changes things considerably.

(08-01-2021 01:52 PM)1845 Bear Wrote:  

(08-01-2021 12:47 PM)bullet Wrote:  

(07-31-2021 10:18 PM)Jared7 Wrote:  

(07-31-2021 09:40 PM)bullet Wrote:  That's why everybody needs to settle in the next 6 months. Otherwise you push OU and UT out and only get 1 year's distributions, risk ESPN/Fox cutting your contract and then have to sue a sovereign entity for any losses. From OU and UT's point of view, if you don't win on sovereign immunity you are at risk for a big liability for violating the GOR.

Reality is that nobody has paid the full exit fee in any of these cases. They always settle for less.

But we've never had a case where an existing contract got reduced after a school leaving. Usually they go up!

Indeed. A negotiated settlement is in everyone's interest. UT needs to make an offer. Otherwise, if they leave early without a settlement, they'll owe much more. And if ESPN/Fox cut the contract, that's a LOT more damages (which are explicitly mentioned in the Articles).

The reality is that schools have often paid the full exit fees. TCU paid the full exit fee to the Big East ($5 million); others have too. In cases where settlements have occurred for less, there were other mitigating factors and no blatant breaches of 99-year commitments and 12-hour-notice provisions

We've had many cases of telecast contracts going down (albeit after the period or because of clauses allowing for re-sets). The WAC was essentially destroyed; C-USA's monies went down.

There is a universally recognized exception for sovereign immunity defenses in cases where it involves commercial activities.

A&M, Missouri, Nebraska, Colorado and Maryland all left early during a contract. All paid 75% or less of the defined exit fees. I think it was about 50% except for Missouri and they offered a lower amount if they stayed another year before moving. WVU and TCU didn't give the required notice (because A&M & Missouri didn't).

The one key difference here is the grant of rights. Those other exits were just negotiated on exit fees. GOR changes things considerably.

Maybe, maybe not. It will take millions in attorneys fees and a few years to find out.

(08-01-2021 01:11 AM)quo vadis Wrote:  Right, but who would be breaking it up? ESPN can't break up the Big 12, only member schools can do that, by choosing to leave. Like if I have a girlfriend and you ask her out, tempting her with a fat wallet and a nice car, and she says yes and I accuse you of breaking up my relationship. You didn't do that, my ex-girlfriend did when she decided to dump me for you. ...

Which would be why they are claiming tortious interference ... for instance, improper action by Party A to induce Party B to cancel a contract can be tortious interference, if Party B has contracts with third parties that are damaged by the action, even if the contract is an at will contract. So "it was Party B that dissolved the contract, it's all their fault" doesn't necessarily work if they are found to have been induced to dissolve the contract by intentional improper actions.

And third parties establishing damages when the result of the improper action has been to dissolve the other party to their contract seems pretty plausible.

Since it's common law rather than legislation, what constitutes improper action is what the plaintiff's lawyers can find precedents for which persuade the judge. IANDL, so I don't know what the precedents are, but obviously we cannot infer the strength of the claim just by reading tea leaves on the cease and desist and response.

One might infer that they have some form of evidence that ESPN was engaged in what their lawyers might claim is improper action with respect to the efforts of the AAC to recruit some (more recently all) of the Remaining Eight, and no evidence regarding ESPN behaving improperly in the TX/OK move, given that the first is claimed and the second is presented as being nothing more than a suspicion.

(08-01-2021 01:11 AM)quo vadis Wrote:  Right, but who would be breaking it up? ESPN can't break up the Big 12, only member schools can do that, by choosing to leave. Like if I have a girlfriend and you ask her out, tempting her with a fat wallet and a nice car, and she says yes and I accuse you of breaking up my relationship. You didn't do that, my ex-girlfriend did when she decided to dump me for you.

And if the schools are gone, who exactly is "Big 12 LLC"? If it's just a scrap of paper, a corporate charter sitting in a lock box somewhere in Dallas, well I don't think the scrap of paper will file a suit. It would seem that it would have to be the administrative apparatus. But if the schools are gone ....

I just don't know. I think my head is spinning, LOL.

Hopefully, a deal can be reached, say OU and TX each pay $20m a year for the next five years, about a $100m total each, and they are gone now.

I get what you mean, but that's why the order would matter. And again, it's moot...

The Big 12 LLC (again, or whatever the legal entity is named) DOES exist until such time that the members vote to dissolve the partnership and close up shop.

They WON'T do that because the LLC is due to collect over between $1.2 and $1.7 billion in revenue over the next four years and there's no way all 8 schools get invites from conferences pulling in more loot than that.


But legally, the whole girlfriend analogy isn't applicable, because GF isn't a legal matter. Marriage is, though. So, the better analogy would be if you won $3 billion in the lottery and ditched your perfectly nice wife for a total smokeshow who never gave you the time of day before you won the lotto and fattened your wallet and bought a sweet whip. Your ex wife can sue you for divorce and get the $1.5 billion her legally binding contract with you entitles her too.

Big 12 LLC is the wife. The lottery winnings come via ESPN (and Fox/NCAA units/CFP payouts). You're not getting no-contest divorce settlements where they decide NO ONE GETS THE MONEY. That's just insane.

Also, along the lines of analogies "How can you prove harm if the Big 12 breaks up?" -- is like saying "How can someone be guilty of murder if the victim doesn't identify their killer?" Because they're dead!

quo's $100 million guess is a reasonable estimate of what the negotiated settlement might ultimately be as to the exit fee component of the Buyout Amount. The reason for this is because UT will be in the Big 12 this season for sure, so $40 million (it might be $38 million) is already "in the can" as far as the withholding amount will be. And the midpoint between $40 million and the $160 million that is planned to be withheld is $100 million. If that's the agreed figure allowing UT to leave 3 years early, then UT could argue that they are indeed getting a substantial "discount" from what should have been paid and what actually will be paid.

But that's just the exit fee component. The GOR piece then remains. As of now, the Big 12 owns UT's telecast rights until June 2025 and is therefore entitled to receive all telecast monies that UT earns until then. And it gets a little confusing here because the telecast monies are not the same as the conference revenue distribution figure. And we don't know precisely what the telecast monies are going to be. The projection had been that the SEC schools were going to get $65 million per year. But everyone knows that it's going to be more - JR estimated $90 million. And ESPN has sort of tipped their hand that that is so when they tortiously interfered with the Big 12 by blathering about it to Aresco. Is the $90 million the anticipated revenue distribution or is it the anticipated telecast money? I don't know. But the high end of the GOR component is $90 million per year. For a three-year early departure, that's $270 million. Each. But it might be $65 million per year, so for 3 years, that's $195 million. Each.

So, working off quo's estimate as to the settlement figure of the exit fee ($100 million), that works out to either $295 million ($100 million + $195 million) or $370 million ($100 million + $270 million). Each. If UT wants to leave early, it'll therefore cost them between $295 million and $370 million. If they don't, it'll be the $160 million that is going to be withheld and they'll stay the full 4 years. That's my estimate. (But of course, everything is negotiable).

(08-01-2021 01:58 PM)JRsec Wrote:  

(08-01-2021 01:52 PM)1845 Bear Wrote:  

(08-01-2021 12:47 PM)bullet Wrote:  

(07-31-2021 10:18 PM)Jared7 Wrote:  

(07-31-2021 09:40 PM)bullet Wrote:  That's why everybody needs to settle in the next 6 months. Otherwise you push OU and UT out and only get 1 year's distributions, risk ESPN/Fox cutting your contract and then have to sue a sovereign entity for any losses. From OU and UT's point of view, if you don't win on sovereign immunity you are at risk for a big liability for violating the GOR.

Reality is that nobody has paid the full exit fee in any of these cases. They always settle for less.

But we've never had a case where an existing contract got reduced after a school leaving. Usually they go up!

Indeed. A negotiated settlement is in everyone's interest. UT needs to make an offer. Otherwise, if they leave early without a settlement, they'll owe much more. And if ESPN/Fox cut the contract, that's a LOT more damages (which are explicitly mentioned in the Articles).

The reality is that schools have often paid the full exit fees. TCU paid the full exit fee to the Big East ($5 million); others have too. In cases where settlements have occurred for less, there were other mitigating factors and no blatant breaches of 99-year commitments and 12-hour-notice provisions

We've had many cases of telecast contracts going down (albeit after the period or because of clauses allowing for re-sets). The WAC was essentially destroyed; C-USA's monies went down.

There is a universally recognized exception for sovereign immunity defenses in cases where it involves commercial activities.

A&M, Missouri, Nebraska, Colorado and Maryland all left early during a contract. All paid 75% or less of the defined exit fees. I think it was about 50% except for Missouri and they offered a lower amount if they stayed another year before moving. WVU and TCU didn't give the required notice (because A&M & Missouri didn't).

The one key difference here is the grant of rights. Those other exits were just negotiated on exit fees. GOR changes things considerably.

Maybe, maybe not. It will take millions in attorneys fees and a few years to find out.

It will certainly take millions in attorneys' fees (something I know about very well LOL), but I honestly don't believe it will be a few years. The parties are going to be pretty motivated to get this figured out in order for UT and OU to play in the SEC in Fall 2022. Everyone has to make it look like they're willing to drag this out to the bitter end, but the reality is that no one benefits from a prolonged divorce proceeding.

(08-01-2021 12:47 PM)bullet Wrote:  A&M, Missouri, Nebraska, Colorado and Maryland all left early during a contract. All paid 75% or less of the defined exit fees. I think it was about 50% except for Missouri and they offered a lower amount if they stayed another year before moving. WVU and TCU didn't give the required notice (because A&M & Missouri didn't).

Not exactly. This being the 6th time that TCU has gone through this conference implosion thing in the past 27 years, we've had quite a bit of experience with it. Technically, the notice provision did not apply to TCU and the Big East because we were never actual members of the conference. Rather, we had signed an agreement to become a member but that was never consummated. We could have litigated that - the Big East actually sued us but we quickly decided the litigation expenses weren't worth it and paid what they asked for anyway. Our experience also has informed us that departing members often haven't read the contracts (as UT apparently hasn't this time) because BYU, in whining about not getting rebroadcast rights from Comcast "thought" that they had them due to a handshake agreement but, in fact, didn't because it wasn't actually in the contract that they signed. Which, according to them, was the MWC's fault.

The point of all that is that discounts don't "always" apply and are not always agreed and they're not going to this time. (Except of course, that's negotiable). Above, I estimated what might be agreed - something between $295 million and $370 million (each) - as to an ultimate agreed amount for a 3-year early departure. I'm fairly sure UT would not like those figures. But until they make an actual offer, it'll be $160 million and they'll stay for the full 4 years.

(08-02-2021 01:52 AM)JSchmack Wrote:  

(08-01-2021 01:11 AM)quo vadis Wrote:  Right, but who would be breaking it up? ESPN can't break up the Big 12, only member schools can do that, by choosing to leave. Like if I have a girlfriend and you ask her out, tempting her with a fat wallet and a nice car, and she says yes and I accuse you of breaking up my relationship. You didn't do that, my ex-girlfriend did when she decided to dump me for you.

And if the schools are gone, who exactly is "Big 12 LLC"? If it's just a scrap of paper, a corporate charter sitting in a lock box somewhere in Dallas, well I don't think the scrap of paper will file a suit. It would seem that it would have to be the administrative apparatus. But if the schools are gone ....

I just don't know. I think my head is spinning, LOL.

Hopefully, a deal can be reached, say OU and TX each pay $20m a year for the next five years, about a $100m total each, and they are gone now.

I get what you mean, but that's why the order would matter. And again, it's moot...

The Big 12 LLC (again, or whatever the legal entity is named) DOES exist until such time that the members vote to dissolve the partnership and close up shop.

They WON'T do that because the LLC is due to collect over between $1.2 and $1.7 billion in revenue over the next four years and there's no way all 8 schools get invites from conferences pulling in more loot than that.


But legally, the whole girlfriend analogy isn't applicable, because GF isn't a legal matter. Marriage is, though. So, the better analogy would be if you won $3 billion in the lottery and ditched your perfectly nice wife for a total smokeshow who never gave you the time of day before you won the lotto and fattened your wallet and bought a sweet whip. Your ex wife can sue you for divorce and get the $1.5 billion her legally binding contract with you entitles her too.

Big 12 LLC is the wife. The lottery winnings come via ESPN (and Fox/NCAA units/CFP payouts). You're not getting no-contest divorce settlements where they decide NO ONE GETS THE MONEY. That's just insane.

Also, along the lines of analogies "How can you prove harm if the Big 12 breaks up?" -- is like saying "How can someone be guilty of murder if the victim doesn't identify their killer?" Because they're dead!

I believe that this is generally correct.

There's an old Simpsons parody of Schoolhouse Rocks called "Amendment to Be" about how a Constitutional amendment is created and the thrust of the joke is that if you can't pass a law because it's unconstitutional, then just change the Constitution and "now we can make all types of crazy laws!" Obviously, a real life Constitutional amendment isn't that easy.

That's sort of like the discussions we have regarding conference realignment where a lot of brains instantly go to the most extreme end point of dissolution: "If the conference dissolves, then now we can make all types of contracts and exit fees instantly go away!"

Dissolution in and of itself is an *extraordinary* measure that is incredibly unlikely in normal circumstances. It's even more unlikely in the Big 12 scenario when they have $150 million-plus in exit fees plus over a billion dollars left in TV rights fees at stake. And even if there was a dissolution, that doesn't mean that all of the contractual obligations necessarily go away - they might get assigned to the legacy members (e.g. even if the Big 12 ceases to exist and Iowa State ends up in the AAC, Iowa State may still end up collecting as a beneficiary of the old Big 12 settlement).

(08-02-2021 08:19 AM)Frank the Tank Wrote:  It will certainly take millions in attorneys' fees (something I know about very well LOL), but I honestly don't believe it will be a few years. The parties are going to be pretty motivated to get this figured out in order for UT and OU to play in the SEC in Fall 2022. Everyone has to make it look like they're willing to drag this out to the bitter end, but the reality is that no one benefits from a prolonged divorce proceeding.

We'll see. So far, at least, UT only seems to want to revel in their greatness and rub everyone's faces in it (a quick perusal of surly or their mouthpiece's twitter feeds will verify this). Are they ever going to act like human beings again? Unless and until they do, it's $160 million and the full 4 years. And if they ever do, it'll be an agreed figure substantially north of where they now think it's going to be.

(08-02-2021 08:32 AM)Frank the Tank Wrote:  I believe that this is generally correct.

There's an old Simpsons parody of Schoolhouse Rocks called "Amendment to Be" about how a Constitutional amendment is created and the thrust of the joke is that if you can't pass a law because it's unconstitutional, then just change the Constitution and "now we can make all types of crazy laws!" Obviously, a real life Constitutional amendment isn't that easy.

That's sort of like the discussions we have regarding conference realignment where a lot of brains instantly go to the most extreme end point of dissolution: "If the conference dissolves, then now we can make all types of contracts and exit fees instantly go away!"

Dissolution in and of itself is an *extraordinary* measure that is incredibly unlikely in normal circumstances. It's even more unlikely in the Big 12 scenario when they have $150 million-plus in exit fees plus over a billion dollars left in TV rights fees at stake. And even if there was a dissolution, that doesn't mean that all of the contractual obligations necessarily go away - they might get assigned to the legacy members (e.g. even if the Big 12 ceases to exist and Iowa State ends up in the AAC, Iowa State may still end up collecting as a beneficiary of the old Big 12 settlement).

UT's sole experience with this was the 1994 dissolution of the SWC and they might well be thinking that they can accomplish that this time. TCU experienced that too though and I can tell you that that was the worst possible outcome (for us at least). We got nothing - no hoops credits, no exit fee, no buyout amount, no resulting TV deal... UT is not going to get away with that this time. Not in a million years. Even if takes TCU to be the sole remaining Big 12 member. (But of course, that's negotiable).

(08-01-2021 02:28 PM)BruceMcF Wrote:  

(08-01-2021 01:11 AM)quo vadis Wrote:  Right, but who would be breaking it up? ESPN can't break up the Big 12, only member schools can do that, by choosing to leave. Like if I have a girlfriend and you ask her out, tempting her with a fat wallet and a nice car, and she says yes and I accuse you of breaking up my relationship. You didn't do that, my ex-girlfriend did when she decided to dump me for you. ...

Which would be why they are claiming tortious interference ... for instance, improper action by Party A to induce Party B to cancel a contract can be tortious interference, if Party B has contracts with third parties that are damaged by the action, even if the contract is an at will contract. So "it was Party B that dissolved the contract, it's all their fault" doesn't necessarily work if they are found to have been induced to dissolve the contract by intentional improper actions.

And third parties establishing damages when the result of the improper action has been to dissolve the other party to their contract seems pretty plausible.

Since it's common law rather than legislation, what constitutes improper action is what the plaintiff's lawyers can find precedents for which persuade the judge. IANDL, so I don't know what the precedents are, but obviously we cannot infer the strength of the claim just by reading tea leaves on the cease and desist and response.

One might infer that they have some form of evidence that ESPN was engaged in what their lawyers might claim is improper action with respect to the efforts of the AAC to recruit some (more recently all) of the Remaining Eight, and no evidence regarding ESPN behaving improperly in the TX/OK move, given that the first is claimed and the second is presented as being nothing more than a suspicion.

Right, so it would be the "third parties damaged" that would presumably be the ones who file the Tortuous Interference lawsuit. That's why I keep getting back to "who are the 3rd parties"? If all the members leave, it can't (in my mind) be "the Big 12 conference" as that entity effectively no longer exists.

True third parties might be the Sugar Bowl (has a contract with the Big 12 that might be rendered worth a lot less) and .... FOX, since they have the same.

That's why I asked why FOX is silent. Bowlsby, speaking for the Big 12, has complained, but again, he might be standing on a block of sand if his members all take the inducements. The Sugar Bowl, even if it is hurt, ain't filing no lawsuit, because they never want to be on the bad side of the SEC, and the SEC will be in ESPN's corner even if the SEC isn't a party sued.

So IMO, that leaves ............ FOX.

Hence the topic of that other post, LOL. Unless I'm just not getting it.