(08-22-2023 01:25 PM)e-parade Wrote:  

(08-22-2023 01:12 PM)clunk Wrote:  

(08-22-2023 12:24 PM)bryanw1995 Wrote:  

(08-22-2023 12:13 PM)Attackcoog Wrote:  

(08-22-2023 12:08 PM)bryanw1995 Wrote:  That's the thing though. You don't THINK they can. I actually don't think they can get away with it, either. But if they DO IT, then it's up to the departing schools to sue the Conference that they just destroyed if they want to see a single red cent. How is that going to look to their fans, they tear down the Conference of Champions, then sue them on top of that when the Conference is trying to rebuild? Perhaps they end up getting some, most or all of that money, but perhaps they don't.

The Conference could justify not paying out to the departing 8 if they also didn't pay out to the 4 leftovers. Then, they could easily say "we needed all of that money to handle Comcast/Holiday Bowl/restock the Conference/etc etc", and nobody was treated unfairly. Then of course, the leftovers could continue to get paid $20m a year for a few years to "smooth their transition" while the new additions only got $10m a year. Nobody was treated unfairly in 2023, everyone suffered, but, long term, the leftovers just didn't suffer quite as much as they would have if the Conference hadn't taken drastic action. And that $20m a year for the leftovers is potential life-changing for the Conference, it could be the difference between Calford taking $10-20m for a decade from the ACC and their deciding to remain in the Pac to make $20m for 5 years then slowly fade down towards $10m.

They could try that---but they would lose. On the other hand, I do think they could spend money to help expansion targets pay early exit fees so the schools can arrive by 2024. That would be a shared expense (with everyone seeing an equal reduction in revenue due to the elevated expenses). To me--thats very defensible in court.

As Bruce mentioned above, even if they lose, it would be years down the road, after that money had already been spent (and used to help save the Conference). Even if they lose, they still win b/c they saved the Conference.

That is exactly the reason the money will be put in escrow if this goes to court. There is simply no way the PAC pays meaningful cash to prospective new members in the short term.

Are you so certain? The bylaws seem to give some leeway when you combine:

CHAPTER 12—MISCELLANEOUS
1. Financial Support. The CEO Group shall approve the annual budget of the Conference and has authority to assess members for such amounts as may be reasonably necessary to support the activities of the Conference. (6/10)

and

CHAPTER 1—FINANCIAL DISTRIBUTION
1. Media Rights. All media rights net revenue generated by the Conference shall be distributed equally among all members.


That allows them to set a larger budget for this coming year before equally distributing the rest of the revenues.

And they also have the reserve fund to pull from.

Yep. They can pay the departing schools $15m, or $5m, or just $5 for that matter, so long as they pay the Pac 4 that same amount. They could then turn around on the day after the 8 departures leave and loan $30m to each of the Pac 4 and let them pay that back out of future Conference revenues, which would be skewed to favor them for years after rebuilding the Conference.

(08-22-2023 01:52 PM)bullet Wrote:  

(08-22-2023 12:19 PM)bryanw1995 Wrote:  

(08-21-2023 08:04 PM)bullet Wrote:  

(08-21-2023 06:13 PM)Attackcoog Wrote:  

(08-21-2023 04:44 PM)bullet Wrote:  The last part is totally untrue and total nonsense. No school has any obligation to another school. The TV contract is over. They will have fulfilled the TV contract. The Big 12 4 didn't owe anything to UH/TCU/SMU/Rice. Neither do the Big 10 & Big 12 new members owe anything to the 4-Pac.

They don't need to support the other schools. They have no obligation to. USC has no duty to keep supporting the WSU athletic department. That's just a totally bizarre concept.

You can't have damages without a contract. Its not like USC is sending its sports teams to rip up the turf at WSU's stadium. They simply aren't associating with them after the contract is over.

You are conflating a GOR and TV deal with a conference membership. They are not one and the same. The concept of damages for simply leaving a conference is well established. The existence of an exit fee simply means the schools have made some attempt to quantify the liquidated damages prior to exit---the lack of an exit fee by no means prevents the other schools from seeking compensatory damages---especially if the conference were to collapse due to the mass exits. To be clear---Ive not suggested that the remaining schools make such a claim. What Ive suggested is that suing the remaining schools because they spent conference money to repair damages to the conference caused by the exiting schools could very well open the door to just such a liquidated damages counter claim. The fact the remaining schools were forced to subsidize exit fees in order to get replacement schools by 2024 is in and of itself pretty good evidence of concrete damages that resulted from nothing more than the exit of schools from the conference on quite short notice.

Not at all. The bolded is absolutely 100% false. How much did the Big 12 4 pay Houston, Rice, TCU and SMU? You keep saying that without any examples because there are none. As Quo points out, there are no damages without a contractual relationship. There is no requirement that USC subsidize WSU's AD indefinitely.

A 25 year old example is hardly relevant to the current discussion. Over the past 20 years, exit fees have increase precipitously, and the Pac could make a case out of that.

I'm just using an example the poster would be familiar with. There has NEVER been a case that was any different. And there are NO exit fees!!!!!!!

Yeah, that no exit fees was the most Pac thing ever. Why would they need exit fees? They're all united and none of them would ever leave. Right? RIGHT???

(08-27-2023 10:58 AM)Tiger1983 Wrote:  Back to regular programming…



According to 8/26/23 the Mercury News (John Wilner), the money available to the PAC 2 is unknown.

However, the author offers his view:

1. $43 million in net assets (including emergency reserve.
2. $65 million in tourney credits over ten years. Outbound schools “don’t take the cash with them.”
3. The PAC2 will not be liable for the Comcast overpayment.
4. Other assets include the Pac-12 Networks infrastructure, bowl contracts, sponsorship deals, etc. may exist as well as hidden liabilities.

Surprising that he didn't mention the huge 2023/24/25 CFP payments.

(08-27-2023 11:05 AM)Poster Wrote:  

(08-27-2023 10:58 AM)Tiger1983 Wrote:  Back to regular programming…



According to 8/26/23 the Mercury News (John Wilner), the money available to the PAC 2 is unknown.

However, the author offers his view:

1. $43 million in net assets (including emergency reserve.
2. $65 million in tourney credits over ten years. Outbound schools “don’t take the cash with them.”
3. The PAC2 will not be liable for the Comcast overpayment.
4. Other assets the Pac-12 Networks infrastructure, bowl contracts, sponsorship deals, etc. may exist as well as hidden liabilities.

To be honest, I don’t really understand the argument that the PAC 2 wouldn’t be liable for whatever portion of the Comcast debt isn’t paid off this year. The whole idea of a corporation is that the corporation (in this case, the PAC-12) is liable for debts, not the shareholders. (In this case, existing PAC schools) That would mean that whoever joins the PAC-2 would become responsible for paying off the debts that the departing PAC members accrued. Everything I know about corporate law indicates that schools basically can just walk away from the Comcast debt by leaving the PAC, and whoever replaces them in the PAC would become liable for their debt.

It might not be fair, but corporate law is one of the least fair parts of law.

One explanation is that the Comcast debt is going to be settled by Comcast not paying their Pac 12 Networks invoices this year. We don't know the exact financial details, but if the original debt is $50M, and Comcast is withholding, and the PAC-12 distibution is expected to be reduced by $4M per school, that's $48M. Given that these numbers are all filtered through journalists and sources who are rounding off and not using exact numbers, that's my guess. There may be some leftoveer debt, but it's in the low millions.

Second possible explanation is that the liability is (maybe, IDK) attached to Pac 12 Enterprises, the corporate shell that runs the Pac 12 Networks, not to the Pac 12 Conference. Much like Sinclair was able to walk away from Diamond Sports Group, leaving the bondholders in control, maybe the idea is that the schools walk away from Pac 12 Enterprises, with Comcast inheriting the wreckage and getting whateveer they can get out of it.

Not really an explanation, but a quirk of college conferences. I suspect that withdrawing members are still on the hook for the liabilities of the conference. This is usually handled through exit fees, plus conferences usually don't owe huge debts to anybody so it hasn't really come up. But if, hypothetically, the PAC owes Comcast $12M after this year, and the PAC still exists, the PAC is probably going after the departing schools for $1M each in court. (Which is more complicated, expensive, time-consuming and reliable than just withholding distirbutions).

(08-27-2023 11:44 AM)Aztecgolfer Wrote:  

(08-22-2023 02:00 PM)clunk Wrote:  <snip for page length>

(08-22-2023 01:53 PM)e-parade Wrote:  Well how much can they argue for (to be distributed to them) when all it says is that funds distributed need to be equal?

They aren't guaranteed a specific dollar amount.


You jumped straight to being in court. Are you so certain that it will go to court based on what is written in the bylaws? I suppose that would have been a better question to pose to you.

If the 4 try to withhold a huge amount of course it's going to court. You think the 8 are just going to wave goodbye to hundreds of millions? The words "reasonably necessary" make lawyers salivate at the thought of billable hours.

Does FOX, ESPN and conference presidents want to be dragged into court? I don't think they want the people to see how this realignment was made.

I don't think ESPN or Fox cares.

(08-27-2023 12:18 PM)bryanw1995 Wrote:  

(08-22-2023 01:52 PM)bullet Wrote:  

(08-22-2023 12:19 PM)bryanw1995 Wrote:  

(08-21-2023 08:04 PM)bullet Wrote:  

(08-21-2023 06:13 PM)Attackcoog Wrote:  You are conflating a GOR and TV deal with a conference membership. They are not one and the same. The concept of damages for simply leaving a conference is well established. The existence of an exit fee simply means the schools have made some attempt to quantify the liquidated damages prior to exit---the lack of an exit fee by no means prevents the other schools from seeking compensatory damages---especially if the conference were to collapse due to the mass exits. To be clear---Ive not suggested that the remaining schools make such a claim. What Ive suggested is that suing the remaining schools because they spent conference money to repair damages to the conference caused by the exiting schools could very well open the door to just such a liquidated damages counter claim. The fact the remaining schools were forced to subsidize exit fees in order to get replacement schools by 2024 is in and of itself pretty good evidence of concrete damages that resulted from nothing more than the exit of schools from the conference on quite short notice.

Not at all. The bolded is absolutely 100% false. How much did the Big 12 4 pay Houston, Rice, TCU and SMU? You keep saying that without any examples because there are none. As Quo points out, there are no damages without a contractual relationship. There is no requirement that USC subsidize WSU's AD indefinitely.

A 25 year old example is hardly relevant to the current discussion. Over the past 20 years, exit fees have increase precipitously, and the Pac could make a case out of that.

I'm just using an example the poster would be familiar with. There has NEVER been a case that was any different. And there are NO exit fees!!!!!!!

Yeah, that no exit fees was the most Pac thing ever. Why would they need exit fees? They're all united and none of them would ever leave. Right? RIGHT???

Yeah, I may have posted I may not, but I did react every time the PAC put out one of those statements about how unified all 10 schools were "Oh so did you pass an exit fee? That would show some commitment and unity"