ACC, PAC-12, and BIG alliance / conference realignment

[AcAndAc]

Yup, the ACC owns the rights to distribute and monetize all member school's media rights as they see fit through 2036.

If Florida State left the ACC today and became independent they would not be able to license the rights to their football games. Because those rights are owned by the ACC. Theoretically the ACC could launch Seminoles+, produce all of their games and sell a subscription for the service to fans, and not share a dime with FSU.

This same concept applies to entertainment...

A few years ago the Paramount corporation decided to license the right to stream the show Yellowstone to NBCU's Peacock service. A year later Paramount then decided to launch their own streaming service but couldn't make available to subscribers it's most popular show. Because they granted those rights to NBCU for a lengthy term.

Once this deal is signed, the rules change. At that point, FSU can pay the exit fee and walk out the door with its media rights. $200M before 2030 and less than $100M thereafter. The writing is on the wall.

Meanwhile, FSU will complain that the ACC/ESPN are artificially lowering ratings, denying them money. I think it best that they just go. If we can still be part of a conference--be it 10 teams or 32--that has a playoff autobid or two... who cares. Let FSU go try to be top 4 in the B1G or SEC. Good luck.

 

[Scooch]

Once this deal is signed, the rules change. At that point, FSU can pay the exit fee and walk out the door with its media rights. $200M before 2030 and less than $100M thereafter. The writing is on the wall.

Meanwhile, FSU will complain that the ACC/ESPN are artificially lowering ratings, denying them money. I think it best that they just go. If we can still be part of a conference--be it 10 teams or 32--that has a playoff autobid or two... who cares. Let FSU go try to be top 4 in the B1G or SEC. Good luck.

We don't know the bolded for sure, the details of the settlement have not come out. I do suspect this is what's happening, though.

What will be funny is that FSU and Clemson will not be the first movers. UNC is going to depart for the B1G, and I strongly suspect UVA, Duke and another school will go with them.

 

[AcAndAc]

We don't know the bolded for sure, the details of the settlement have not come out. I do suspect this is what's happening, though.

What will be funny is that FSU and Clemson will not be the first movers. UNC is going to depart for the B1G, and I strongly suspect UVA, Duke and another school will go with them.

Both schools would consider it a win as well after they decided to file lawsuits in their home states in hopes of extricating themselves from a grant of rights agreement that, according to Florida State's attorneys, could have meant paying as much as $700 million to leave the conference. The ACC countersued both schools to preserve the grant of rights agreement through 2036.

Although the settlement will not make substantive changes to the grant of rights, it is expected that there will be declining financial penalties for schools that exit before 2036, with the steepest decreases coming after 2030 -- something that would apply to any ACC school, not just Clemson and Florida State.

The specific financial figures for schools to get released from the grant of rights were not readily available. But the total cost to exit the league after the 2029-30 season is expected to drop below $100 million, sources said.

The current language would require any school exiting before June 2036 to pay three times the operating budget -- a figure that would be about $120 million -- plus control of that team's media rights through the conclusion of the grant of rights.


This was seen as a critical piece to the settlement, allowing flexibility for ACC schools amid a shifting college football landscape, particularly beyond the 2030 season, when TV deals for the Big Ten (2029-30), Big 12 (2030) and the next iteration of the College Football Playoff (2031) come up for renewal -- a figure Florida State's attorneys valued at more than $500 million over 10 years.

Sources told ESPN that there'd just be one number to exit the league, not the combination estimated by FSU of a traditional exit fee and the loss of media from the grant of rights.

 

[Hoo's That]

Yup, the ACC owns the rights to distribute and monetize all member school's media rights as they see fit through 2036.

If Florida State left the ACC today and became independent they would not be able to license the rights to their football the games in all sports sponsored by the ACC. Because those rights are owned by the ACC. Theoretically the ACC could launch Seminoles+, produce all of their games and sell a subscription for the service to fans, and not share a dime with FSU.
{snip}

FIFY

 

[kcsu]

I read that it doesn't matter if they leave. The ACC would still hold their media rights until 2036 and the GOR cannot be broken. I could be wrong though.

Your correct.

 

[Toga]

If FSU walks out the door today, they don't get the conference paycheck for TV rights (and other revenue) as determined by the GOR, as they do now. And wouldn't until the current contract is up (2036). In other words, they have ceded all monetary rights to the conference. If they stayed, they would receive an annual payout as all teams now do. At least, that's how I understand it.

Is that what you are asking?

Kind of. Could the league they join actually show their (home?) games or is that contractually prohibited? Would the media rights fee not given to the leaving school be divided among the remaining members or would ESPN commensurately reduce the money given to the conference?

 

[kcsu]

Agreed. Why even negotiate?

You don't understand the contract.

 

[kcsu]

Kind of. Could the league they join actually show their (home?) games or is that contractually prohibited? Would the media rights fee not given to the leaving school be divided among the remaining members or would ESPN commensurately reduce the money given to the conference?

Bottom line. FSU would get ZERO
ACC would get 100%

 

[kcsu]

Once this deal is signed, the rules change. At that point, FSU can pay the exit fee and walk out the door with its media rights. $200M before 2030 and less than $100M thereafter. The writing is on the wall.

Meanwhile, FSU will complain that the ACC/ESPN are artificially lowering ratings, denying them money. I think it best that they just go. If we can still be part of a conference--be it 10 teams or 32--that has a playoff autobid or two... who cares. Let FSU go try to be top 4 in the B1G or SEC. Good luck.

No

 

[AcAndAc]

No

Well, that is what the article said. If it is wrong, it is wrong. But why assume it is wrong? Says it was a key negotiating point.

 

[kcsu]

Ok

 

[0.2 YNdeeR]

We don't know the bolded for sure, the details of the settlement have not come out. I do suspect this is what's happening, though.

What will be funny is that FSU and Clemson will not be the first movers. UNC is going to depart for the B1G, and I strongly suspect UVA, Duke and another school will go with them.

Might not be so funny. The exodus you predict is exactly the cancer the GOR was designed to prevent, which is why it was inserted into the league contract (with ESPN) and agreed to by every conference member. Changing the rules midstream, especially lowering the GOR threshold, could destroy the conference.

 

[HtownOrange]

No, there is only one exit fee total. So, FSU went from looking at $300K to buyout, plus another $400k to buy the rights to their media to give to a new conference... to... getting an extra $10-$15-$30M per year PLUS a one-time fee that goes down to under $100M in 2031 or so.

Big win for FSU/Clemson. As for the rest of the conference, FSU/Clemson made it clear that they were leaving for greener pastures. They were gone in 2036. Poof. Now, there is at least a chance that it might be viewed too difficult to justify leaving in 2031. Plus, it forces the B1G and SEC to pay them a full share if they want to leave then too. Not as bad as you think.

Anyone thinking Syracuse will be in the top half of distributions is nuts. If this was 2012 with Boeheim at his best, maybe basketball would help. But a 10 win season is not enough to move the viewership dial at all. And when we inevitably win 4 or more less games next year... so much for that. Wildhack seems to be swinging and missing on everything other than Fran Brown (and we will see how well that turns out in 2-3 years).

This issue has been discussed ad nauseum in this an other threads, look it up. The documents presently agreed to, which FSU and Clemson wish to alter/amend, make the exit fee, 3X the annual TV revenue per school. The 2022-2023 payout was $44.8MM per school, the buyout at that time was $134.4MM. It went up last year and will go up annually until the endo the deal.

The GOR is a separate agreement between ESPN and the ACC, the ACC received the rights of each school via each school granting their rights to the ACC for the sake of the deal with ESPN to obtain the ACCN. As noted above, the rights return money back to the ACC and then the schools. That money increases each year. FSU estimated it would cost them about $600MM to buy their way out and sued to decrease that amount. The $600MM was a low ball figure based on other schools having bought their rights back to switch conferences; see UT, USC, OU, UCLA, Pitt, SU. For FSU to buy their rights back alone is worth more than $250MM for 2031-2036, assuming they leave after the 2030 academic year. Further, ESPN must agree to whatever buyback of rights because ESPN is not likely to allow the sale and then pay more than $100MM more to move FSU to the SEC When ESPN can force FSU to wait until 2036 or pay a premium.

NOTE: The article only speaks of agreements pertaining to the four lawsuits between FSU, Clemson and the ACC. ESPN is not a party to any of the lawsuits and any concept of FSU doing whatever they want and sticking it to everyone else - including ESPN - is a farce. To the writer's credit, they were likely forced to get the story out before clarifying every detail. As it stands, the details are not worked out nor are they agreed to. However, FSU is not likely to win the ultimate legal issues, though the Florida courts are giving them homefield advantage in the meantime.

 

[HtownOrange]

Once this deal is signed, the rules change. At that point, FSU can pay the exit fee and walk out the door with its media rights. $200M before 2030 and less than $100M thereafter. The writing is on the wall.

Meanwhile, FSU will complain that the ACC/ESPN are artificially lowering ratings, denying them money. I think it best that they just go. If we can still be part of a conference--be it 10 teams or 32--that has a playoff autobid or two... who cares. Let FSU go try to be top 4 in the B1G or SEC. Good luck.

Where are you getting your numbers? Please source them.

 

[AcAndAc]

Where are you getting your numbers? Please source them.

Sources: FSU, Clemson, ACC expected to settle

FSU and Clemson will vote Tuesday on an agreement that would ultimately result in the settlement of lawsuits between the schools and the ACC, sources told ESPN.

www.espn.com

 

[HtownOrange]

Sources: FSU, Clemson, ACC expected to settle

FSU and Clemson will vote Tuesday on an agreement that would ultimately result in the settlement of lawsuits between the schools and the ACC, sources told ESPN.

www.espn.com

Please re-read the article and the search the matter in this and other threads. The article is incorrect in a few items.

 

[Scooch]

FIFY

For sure. I was just providing an example.

 

[Toga]

Might not be so funny. The exodus you predict is exactly the cancer the GOR was designed to prevent, which is why it was inserted into the league contract (with ESPN) and agreed to by every conference member. Changing the rules midstream, especially lowering the GOR threshold, could destroy the conference.

Wouldn't lowering the GOR be ESPN's decision?

 

[AcAndAc]

Please re-read the article and the search the matter in this and other threads. The article is incorrect in a few items.

I don't care about the other threads... what is the source? Commenters claiming ESPN is wrong does not make it so.

I understand how the contracts worked... but this is a settlement... in order to get FSU/Clemson to drop their lawsuits, they had to come up with a compromise. And this is it. FSU/Clemson get a sum certain exit fee... which goes down dramatically after 2029-2030. They also get a different fee structure before hand.

As for ESPN, what do they care. They paid for the ACC TV rights. If the ACC cannot deliver FSU's media... ESPN can renegotiate. Or, they can allow the ACC to just decrease pro rata. In fact, ESPN can use leverage with the SEC to drive the bus... if FSU/Clemson goes to SEC, ESPN will either pay the buyout to ACC or allow the media rights deal to remain the same in exchange for the ACC agreeing to not charge the buyout. If FSU/Clemson goes to B1G, they have to pay the buyout.

Meanwhile, the revised fee structure means that the SEC or B1G need to pay full shares to get FSU/Clemson. If FSU/Clemson are taking it $65k and those conferences are paying out $75k... FSU/Clemson are not going to take 50% of a B1G share. No desperation. And they can also turn down the B1G/SEC and justify it to their fans.

 

[Scooch]

Might not be so funny. The exodus you predict is exactly the cancer the GOR was designed to prevent, which is why it was inserted into the league contract (with ESPN) and agreed to by every conference member. Changing the rules midstream, especially lowering the GOR threshold, could destroy the conference.

The conference as we know it is walking dead as we speak. It's inevitable. I suspect at least 6 schools are ready to walk as soon as 2031 given this settlement.

The only questions at this point is who will leave for the B1G and who will leave for the SEC.

 

[AcAndAc]

Wouldn't lowering the GOR be ESPN's decision?

No... the GOR is between the schools and the conference. However, ESPN values the media deal based on what schools are part of the conference package. So, if FSU leaves, ESPN is not paying for what it was supposed to receive.

 

[AcAndAc]

The conference as we know it is walking dead as we speak. It's inevitable. I suspect at least 6 schools are ready to walk as soon as 2031 given this settlement.

The only questions at this point is who will leave for the B1G and who will leave for the SEC.

It always was once FSU/Clemson filed their lawsuits. At least now there is a chance that B1G/SEC cannot buy those two schools (or any schools) on the cheap. I suppose UNC could be getting $50M from the ACC and the B1G can offer them $60M... but UNC will be going from having control over a conference to being an also-ran in the B1G. And the NC State issue. So maybe this is a better deal for the ACC than we think...

 

[orange79]

Kind of. Could the league they join actually show their (home?) games or is that contractually prohibited?

They can show all FSU games and keep the money without giving FSU a dime.

Would the media rights fee not given to the leaving school be divided among the remaining members or would ESPN commensurately reduce the money given to the conference?

It would be divided among the remaining members.

 

[rocklloyd]

We gon be rich!

 

[HtownOrange]

I don't care about the other threads... what is the source? Commenters claiming ESPN is wrong does not make it so.

I understand how the contracts worked... but this is a settlement... in order to get FSU/Clemson to drop their lawsuits, they had to come up with a compromise. And this is it. FSU/Clemson get a sum certain exit fee... which goes down dramatically after 2029-2030. They also get a different fee structure before hand.

As for ESPN, what do they care. They paid for the ACC TV rights. If the ACC cannot deliver FSU's media... ESPN can renegotiate. Or, they can allow the ACC to just decrease pro rata. In fact, ESPN can use leverage with the SEC to drive the bus... if FSU/Clemson goes to SEC, ESPN will either pay the buyout to ACC or allow the media rights deal to remain the same in exchange for the ACC agreeing to not charge the buyout. If FSU/Clemson goes to B1G, they have to pay the buyout.

Meanwhile, the revised fee structure means that the SEC or B1G need to pay full shares to get FSU/Clemson. If FSU/Clemson are taking it $65k and those conferences are paying out $75k... FSU/Clemson are not going to take 50% of a B1G share. No desperation. And they can also turn down the B1G/SEC and justify it to their fans.

What is the source? The actual agreement in place as of now. Research them, I am not doing the work for you. The work has been done in this and other threads.

Agreed, the issue now is a settlement, Please explain how spending a few million dollars more is not worth several hundred million or more than a billion dollars, should enough teams leave.

As for the exit fee, there is no need to negotiate, FSU was one of the major proponents for the current exit fee, which is well documented. Courts are not likely to allow decrease the amount to their benefit harming the remaining schools. ESPN owns the rights to FSU and must pay the ACC for FSU's rights. ESPN cannot simply move them to the SEC, that would be a criminal act and make the remaining ACC teams very rich. FSU cannot simply play for the SEC as the ACC will receive the revenue.

Anyway, have fun when you get into a contract dispute.

Sure, anything may be agreed to but you have failed to show why any ACC team would vote to reduce the costs to FSU without gaining anything in return from FSU.