MaxwellCuse
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Greg Swaim's track record as a prognosticator has been Nostradamus-like, hasn't it?
Greg Swaim
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kyleslamb
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Well, the next time a team pays a full exit fee will probably be the first. Very rarely does a university pay an exit fee more than 50-60% of what's stated in the bylaws. Nebraska paid the Big 12 only about $9 million of $18 million that was owed when they left for the Big Ten. I honestly think that's what would happen with Maryland. And for what it's worth: both Maryland and Florida St. were reportedly the reason(s) the ACC didn't increase the exit fees to over $30 million. They both voted no on that.
N.Y. Orangeman
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The University of Maryland's AD is running in the red, has no reserve funds and is $83m in debt. I can't fathom them voluntarily taking on another $10-15m in exit fees right now.
Also, you aren't correct on the flat number you cited for the ACC exit fees; it is a percentage of the yearly amount remitted to the institution (125%). This will go up in the coming years when the new TV deal is negotiated (at least you would have to assume so).
Toga
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I read several places it equated to $34
kyleslamb
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I've only seen it reported as a flat fee, like here, for instance. I'm not saying you are wrong, but it definitely has been reported as a flat fee in many places. Also, if what you say is true about 125%, then I can guarantee you it's not even remotely $20 million because the ACC payouts are not even remotely close to that number. Last year, Maryland was paid about $10 million from the ACC. In 2009-10, it was $9.8 mil. While the new TV deal increases that number, even with the extra 25% of the payout, it's still less than $20 mil.
Bottom line is that if Maryland is running in the red (and you're right that they are)... that's even more reason to make the move. Boosters will spring for donations to cover that, and like happened with Nebraska, the Big Ten can decrease their share for a few years to help spring for the exit fee. The Big Ten brings in nearly double the revenue ACC schools do, so they can help cover the cost of the exit fee by using a 5-year graduation of revenue for Maryland. You don't let a one-time exit fee stop you from improving your situation long-term. That would be like turning down a job paying $100,000 a year, when making $60,000 and struggling to pay your bills, just because it might involve coming up with the money to make a move to another town. Being in the red is all the more reason to consider the Big Ten.
This is simple: let's say Maryland will make $15 million from the ACC. Well guess what? Big Ten schools are receiving payouts of around $23 million right now. So the Big Ten can offer Maryland $15 million immediately with the other $8 million being paid back as part of the exit fee. Then in year two, Maryland's revenue is bumped to say $18 million with another $5 million held to pay back the exit fee, etc. By the fifth year, Maryland is made whole while still making more than they would have in the ACC.
I promise you... if Maryland doesn't join the Big Ten, the exit fee won't be the cause or deterrent.
N.Y. Orangeman
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http://www.theacc.com/podcasts/acc-network-podcasts.html Swofford Press Conference on 9/21 at the 19 minute mark. "125% of the budget in any given year"
I respectfully disagree. Nebraska's boosters sprung for this in order to get out of the B12 and away from Texas, which was an emotional issue in their base. These factors aren't present here.
The numbers you are grabbing at are hypotheticals as well. While the B10 and its network will have an advantage, you have no basis for the 2/1 ratio you cite. I'll defer to our experts around here (who actually have first hand knowledge), but it defies logic that a conference with the coverage the ACC now has will have a new deal (remember, the ACC redid their deal prior to others) that is less than all others save the Big East. I guess we will have to see on this one. If I am not mistaken, the SEC gets $17m, the Pac-10 gets $21m, the B10 gets $20-23m and the B12 gets $2, but Texas gets $100m. Are you suggesting the ACC, which has the entire Eastern seaboard would get half of the others? I'll be very surprised.
Also, I've yet to see one credible article that cited anyone around Maryland as having an interest in leaving the conference it founded. I don't see a hint of it anywhere, much less here (http://www.umterps.com/genrel/091811aaa.html)
Finally, I really think you are underestimating the problems in the Maryland AD department. They are as bad when you figure in the debt as Cal's problems were. Check out the WaPo articles on this.
I respectfully disagree. Nebraska's boosters sprung for this in order to get out of the B12 and away from Texas, which was an emotional issue in their base. These factors aren't present here.
The numbers you are grabbing at are hypotheticals as well. While the B10 and its network will have an advantage, you have no basis for the 2/1 ratio you cite. I'll defer to our experts around here (who actually have first hand knowledge), but it defies logic that a conference with the coverage the ACC now has will have a new deal (remember, the ACC redid their deal prior to others) that is less than all others save the Big East. I guess we will have to see on this one. If I am not mistaken, the SEC gets $17m, the Pac-10 gets $21m, the B10 gets $20-23m and the B12 gets $2, but Texas gets $100m. Are you suggesting the ACC, which has the entire Eastern seaboard would get half of the others? I'll be very surprised.
Also, I've yet to see one credible article that cited anyone around Maryland as having an interest in leaving the conference it founded. I don't see a hint of it anywhere, much less here (http://www.umterps.com/genrel/091811aaa.html)
Finally, I really think you are underestimating the problems in the Maryland AD department. They are as bad when you figure in the debt as Cal's problems were. Check out the WaPo articles on this.
kyleslamb
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If you don't believe me, check out the USA Today college finances database.
Total NCAA/conference payouts in 2009-10 academic year:
Maryland $9.8 million
Indiana $24.2 million
Look it up: USA Today College Finances Data
These aren't hypotheticals I'm talking about. This is reality. The Big Ten's revenue stream is far greater right now. That's the reality of the situation. For a school like Maryland, this is absolutely a no-brainer in terms of money. I'm not saying money will be the only factor or that they will absolutely leave... but if it comes down to money, exit fees are a puny reason to stay given the large discrepancy in revenue.
Take the above Indiana example, a bottom-tier football program in the Big Ten. They earned $24 million in conference payouts. Now look at some of the ACC teams:
North Carolina ($11.1 million)
Florida St. ($13.3 million)
Virginia ($11.4 million)
While these numbers will go up slightly as the ACC deal with ESPN just took effect, the Big Ten's numbers will also increase as their payouts from the BTN continue to get higher each year, and unlike the past 5 years where they were seeing no profits from the BTN deal (because all operating profits were going to News Corp. to pay back their initial investment), now that the investment is paid off, they will begin seeing 49% of the profits on top of their rights fees. And the Big Ten is due for a huge increase in 2015 when it becomes a free-agent from its tier-1/2 deal with ESPN.
Point is, the ACC revenue will certainly get better, but if it comes down to money, it's not really a discussion.
You can elect to not believe me, but Maryland has been having dialog with the Big Ten for a year. Whether that will result in their leaving is certainly not a given. But there's mutual interest at very least.
sufan
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10/5: AP article:
"The university official said the Big Ten remains Missouri's top choice but that conference "has no interest."
"That's what's left," the official said, referring to the SEC. "
omniorange
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Here are another set of numbers for reference sake, supposedly taken from the IRS 990 forms, I believe.
http://www.tulsaworld.com/articleimages/2011/b4graphictable100211.jpg
Cheers,
Neil
http://www.tulsaworld.com/articleimages/2011/b4graphictable100211.jpg
Cheers,
Neil
N.Y. Orangeman
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Thanks, Neil.
Kyle, you are distorting my point. I'm not arguing with you about where the numbers stand currently; I'm stating that these will change and narrow in the next round of negotiations, and, for that matter, probably in future ones. The other piece which is of relevance is the population shifts which are currently trending away from the B10. This will become increasingly relevant, especially in a fifty year decision which this undoubtedly is. I'm familiar with the B10 network and the contract (as well as how an exit could befinancially structured). However, I disagree with the static assumptions you base your revenue figures on in the intermediate and beyond.
If you have a source or a report for the Maryland to B1G statement, I'd love to see it.
Kyle, you are distorting my point. I'm not arguing with you about where the numbers stand currently; I'm stating that these will change and narrow in the next round of negotiations, and, for that matter, probably in future ones. The other piece which is of relevance is the population shifts which are currently trending away from the B10. This will become increasingly relevant, especially in a fifty year decision which this undoubtedly is. I'm familiar with the B10 network and the contract (as well as how an exit could befinancially structured). However, I disagree with the static assumptions you base your revenue figures on in the intermediate and beyond.
If you have a source or a report for the Maryland to B1G statement, I'd love to see it.
kyleslamb
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That's the thing, I really don't see it narrowing. The Big Ten is also up for a new contract and the BTN revenue projections are showing a huge increase over the next few years. I'm not distorting anything, on the contrary, I'm stating I don't think the gap is going to narrow much if any. Mike Tranghese kind of said the same thing (though not speaking about the Big Ten) a few weeks ago when he mentioned the ACC is in for a rude awakening if they think this expansion will drastically improve the TV money. As far as the population shift: it's likely not as big of a deal as being made out to be. The Big Ten states except for Michigan actually increased from the 2000 to 2010 census, though they didn't all grow as much as some Southern states. Still, the Big Ten covers 25% of the country right now and if Texas joins, that number will grow much larger. While I recognize the trends, I don't think they're going to drastically change the landscape.
But let me go back to the original point that is being missed: the revenue difference is enough that $20 million, give or take, would wind up being much less after it's negotiated down (and it almost always is). So do you really think Maryland would give up the chance to make several million more a season because of a one-time exit fee of $10-20 million? Very, very, very doubtful. Literally it's possible that what they'd have to pay in an exit fee would be made up with one full season in the Big Ten at a full share. That's not impossible.
As far as a source or report on Maryland to the B1G: as I said previously, I am NOT saying that's what is going to happen... I'm saying there absolutely has been discussions and Maryland is sure not saying "no" right now. There's definitely mutual interest. Whether it happens or not is another story. That I don't know. The source of this is coming from my contacts from covering the Big Ten for several years, FWIW. You'll just have to choose to trust me on that or not. But again, it was reported by ACC people that Maryland and Florida State were responsible for the fees not being higher. You can read between the lines, I think.
omniorange
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I think Maryland would have to at least consider a BiG invite. They would be foolish not to do so if it ever truly materializes. But supposedly VT has turned down an SEC invite. And that is (or soon might be) equivalent in terms of $$$, if not academic prestige as the BiG.
In part, I think the further expansion of the ACC into the northeast was an attempt to show Maryland that they are trying to address some of their needs. Whether that proves to be sufficient only the future can tell.
I'm more worried about keeping FSU and/or Clemson in the ACC for the moment since I don't think the BiG moves unless they can get either ND or Texas.
Cheers,
Neil
In part, I think the further expansion of the ACC into the northeast was an attempt to show Maryland that they are trying to address some of their needs. Whether that proves to be sufficient only the future can tell.
I'm more worried about keeping FSU and/or Clemson in the ACC for the moment since I don't think the BiG moves unless they can get either ND or Texas.
Cheers,
Neil
AgentOrange
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If accurate, that chart is disturbing because it claims that SU earned less money than 64 of the 65 other teams in AQ conferences in 2010. This would explain why its facilities are substandard when compared to other AQ schools.
kyleslamb
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I gazed through the 990 forms I have on my hard drive, and the numbers seem to match up with what's posted on that chart (at least for the few docs I checked) by way of connected payments made to other organizations. So that seems to be the source.
K
kingottoiii
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They are setting an example of how not to act during expansion. Last year they were made to look stupid when the B1G didn't offer. And now it almost seems like they are hyping up a move to the SEC (who we don't even know if they have true interest) so the B1G offers them. But the B1G is calling their bluff and Mizzou ends up stuck in the B12 AGAIN. Is Mizzou desperate or do they really think they are attractive when in reality they are not?
Chip
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From what I've been reading on twitter this morning (I only pay attention to those who I think have an ounce of credibility), it sounds like the B1G isn't at all interested. And the SEC has some presidents interested, but not enough. So maybe that was their ace in the hole that they knew there was definitely SOME interest. Sounds like now it's a lobbying effort between Mizzou and the interested SEC Presidents, to flip enough of the others to get the majority. Those sessions should be interesting.
EastBayCuse
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Looks like Swaim was wrong about the Big 10 offer:
http://blog.syracuse.com/sports/2011/10/conference_realignment_with_no.html
http://blog.syracuse.com/sports/2011/10/conference_realignment_with_no.html
