…….a comment from the WSJ editorial this morning showing the difficulty of asking a judge to force Elon Musk to go through with his acquisition of Twitter. Judges always prefers a one time cash payment for settling a case. Judges don’t like to force actions “in equity” that require their constant supervision.
Let allow me to write a long winded paragraph that will lead to the punchline . Anything can happen in a court case, of course but there is no way the actually written penalty of breaking a GOR can be enforced without a court monitoring its progress over the term of the contract. And that is because the calculation of what a school actually earns in a conference contract, and what it actually contributes to that conference, are two different numbers. We know the simplicity of the language…a school gives its media rights to its conference and if that school leaves early, those future media rights belong to the conference….even if those future media rights are a different amount than what the school “created” in the old conference and even if they are now contractually to be paid to a different old conference. It has been noted numerous times that FSU’s value to the ACC is much greater than its annual payout from the ACC. Presumably, and it is assumed, that FSU could earn more in another conference. So is the GOR to be read as to actually give the old conference a windfall by earning higher revenue for an asset than what FSU (as an example) would be paid if it stayed in the old conference? I guess a judge “has to decide”. Does that also mean that the school can counter that windfall agree to join a new conference and further agree to actually get less than what it got from the old conference, thereby negating that “windfall” and actually financially “harm“ the old conference? I guess a judge “has to decide” if such shenanigans are allowed. And if the judge rules that the new conference must pay the fair market value to its new member, how does that jive with the “conclusion” that the old conference is allowed to pay less to a member than its real media fair market value? Sounds like great fun for an activist judge. And in reality what we have is the network with a contract in the old conference asking a judge to protect its interest in a contract it never signed.
Please don’t respond to the paragraph because I only write it to set the stage to correct a misconception that is being constantly repeated. It has been written many times that if a GOR can be broken, OU and Texas would have already challenged it. Wouldn’t everyone be better off, especially ESPN’s beloved SEC, if Texas and OU joined the SEC before 2025?
People and media….Wake Up. Texas and OU are not challenging the GOR because ESPN doesn’t want them to and the SEC can’t support such a move. It’s that simple. Does anybody really believe that ESPN didn’t help OU, Texas and the SEC make that move? Sure ESPN and the SEC probably thought that the proposed 12 team playoff early expansion would encourage the Big 12 to allow OU and Texas to leave early (for a fee), but once the early playoff expansion plans fell, ESPN is telling OU and Texas to “stand down”. Nobody at ESPN wants anyone to challenge any GOR. The plain language of the GOR is a huge impediment against any member leaving a conference, but the risk of a judge reading that “simple” language and forcing the parties to come up with a one time cash settlement is not de minimus.
This is why I have stated that the GOR is unbreakable not because of its “clarity” of its legal enforcement, but because the networks don’t want it broken. And most, if not all, members have acquiesced to this view in exchange for security of the TV revenue. The GOR may be a “sham”, but the sham has been accepted by every party that signed it, and every network that didn’t sign it. No one is going to challenge it in court. By winning a lawsuit and invalidating a GOR, the members will lose over the long run. The networks will win in the end.
So, if the networks really control all these strings, now you can see why ESPN may have overpaid for the CBS Game of the Week. (The CBS annual payment of $51M goes to $300M from ESPN in 2024). ESPN, and only ESPN, and, the SEC and the ACC, and only the SEC and the ACC, are in a unique position. In 2024, can ESPN craft a movement of members among these two conferences without creating a roadmap that could damage other GOR’s? Probably. But if that is the case, the idea that any ACC member going to the Big Ten just seems unlikely. ESPN has no intention of giving up any of its assets. I can’t see anything happening where the ACC GOR is voided giving freedom to members to go anywhere they want. Does anyone disagree that ESPN’s total revenue of all its ACC and SEC assets can actual make more money with a little “reorganization”? These are normal moves in any well executed post-closing plan for any corporate merger.
So, these are my “current” and ”subject to change” views on our opportunities to improve our financial future. With Alabama, UGA and LSU agreeing to be on our future schedule, I see a roadmap working towards FSU into the SEC….kind of like the late 80‘s and early 90’s when LSU and Auburn suddenly agreed to home and away games with FSU. But a first year AD mucked all that up.
The current first year AD is much better.
Let allow me to write a long winded paragraph that will lead to the punchline . Anything can happen in a court case, of course but there is no way the actually written penalty of breaking a GOR can be enforced without a court monitoring its progress over the term of the contract. And that is because the calculation of what a school actually earns in a conference contract, and what it actually contributes to that conference, are two different numbers. We know the simplicity of the language…a school gives its media rights to its conference and if that school leaves early, those future media rights belong to the conference….even if those future media rights are a different amount than what the school “created” in the old conference and even if they are now contractually to be paid to a different old conference. It has been noted numerous times that FSU’s value to the ACC is much greater than its annual payout from the ACC. Presumably, and it is assumed, that FSU could earn more in another conference. So is the GOR to be read as to actually give the old conference a windfall by earning higher revenue for an asset than what FSU (as an example) would be paid if it stayed in the old conference? I guess a judge “has to decide”. Does that also mean that the school can counter that windfall agree to join a new conference and further agree to actually get less than what it got from the old conference, thereby negating that “windfall” and actually financially “harm“ the old conference? I guess a judge “has to decide” if such shenanigans are allowed. And if the judge rules that the new conference must pay the fair market value to its new member, how does that jive with the “conclusion” that the old conference is allowed to pay less to a member than its real media fair market value? Sounds like great fun for an activist judge. And in reality what we have is the network with a contract in the old conference asking a judge to protect its interest in a contract it never signed.
Please don’t respond to the paragraph because I only write it to set the stage to correct a misconception that is being constantly repeated. It has been written many times that if a GOR can be broken, OU and Texas would have already challenged it. Wouldn’t everyone be better off, especially ESPN’s beloved SEC, if Texas and OU joined the SEC before 2025?
People and media….Wake Up. Texas and OU are not challenging the GOR because ESPN doesn’t want them to and the SEC can’t support such a move. It’s that simple. Does anybody really believe that ESPN didn’t help OU, Texas and the SEC make that move? Sure ESPN and the SEC probably thought that the proposed 12 team playoff early expansion would encourage the Big 12 to allow OU and Texas to leave early (for a fee), but once the early playoff expansion plans fell, ESPN is telling OU and Texas to “stand down”. Nobody at ESPN wants anyone to challenge any GOR. The plain language of the GOR is a huge impediment against any member leaving a conference, but the risk of a judge reading that “simple” language and forcing the parties to come up with a one time cash settlement is not de minimus.
This is why I have stated that the GOR is unbreakable not because of its “clarity” of its legal enforcement, but because the networks don’t want it broken. And most, if not all, members have acquiesced to this view in exchange for security of the TV revenue. The GOR may be a “sham”, but the sham has been accepted by every party that signed it, and every network that didn’t sign it. No one is going to challenge it in court. By winning a lawsuit and invalidating a GOR, the members will lose over the long run. The networks will win in the end.
So, if the networks really control all these strings, now you can see why ESPN may have overpaid for the CBS Game of the Week. (The CBS annual payment of $51M goes to $300M from ESPN in 2024). ESPN, and only ESPN, and, the SEC and the ACC, and only the SEC and the ACC, are in a unique position. In 2024, can ESPN craft a movement of members among these two conferences without creating a roadmap that could damage other GOR’s? Probably. But if that is the case, the idea that any ACC member going to the Big Ten just seems unlikely. ESPN has no intention of giving up any of its assets. I can’t see anything happening where the ACC GOR is voided giving freedom to members to go anywhere they want. Does anyone disagree that ESPN’s total revenue of all its ACC and SEC assets can actual make more money with a little “reorganization”? These are normal moves in any well executed post-closing plan for any corporate merger.
So, these are my “current” and ”subject to change” views on our opportunities to improve our financial future. With Alabama, UGA and LSU agreeing to be on our future schedule, I see a roadmap working towards FSU into the SEC….kind of like the late 80‘s and early 90’s when LSU and Auburn suddenly agreed to home and away games with FSU. But a first year AD mucked all that up.
The current first year AD is much better.
