Octagon/ Navigate are consultants. One is expansion strategy, and the other is for the media valuation negotiation aspect. Both are highly respected in industry.
Estimate for MWC media deal
- Thread starter bcvegaspt2
- Start date
Thank you for sharing.
So reading this, I would imagine that no school has provided the written notice and exit deposit yet. It makes no sense to do that, you just lose money.
I would imagine they will do it this summer to be compliant and not open the door for doubled fees.
So in the summer next year we "might" have up to 55 mil in poaching fees + 25k from deposits. I have no idea what the payment schedule is for media rights. Are they larger payments done annually, quarterly, monthly? No idea but that plays a role.
If payment are annual then a large chunk of money may be collected, and the 61 mil threshold could be met, and MW may pay that lump sum.
However, that probably isn't the best practice. Since those exit fees will be contested and negotiated down somewhat. Now i think it is pretty safe that it will be at least 1 year media value per school, but again that is not guaranteed.
Also if the exit fees being contested in a lawsuit, I can see an injunction being made in the traitor's behalf. Just because again, they are still a part of this conference and the document that allows the the MW to withhold money is being contested. So if anything is going to be "frozen" I would guess it would be the the idea of withholding the payouts. I would guess the 5k gets collected regardless.
If it stays in the courts March is irrelevant… to get to any sort of adjudication would take months, and then there are the appeals.
They could be hoping for a settlement sooner, but they’re not getting the poaching fees nullified in any short time frame.
And we (the Pac) are doing so well in both areas. They probably come out of Pac meetings feeling like Oliver Douglas from Green Acres after meeting with the Ziffels, Mr. Haney, and Mr. Kimball. Arnold being the most intelligent of the lot.
Well, having met some of those navigate guys myself, I can tell you they are sharp.
But the question is, what directions were they given? Are they saying whats best for the Pac, or whats in line with the scope of the request from pac leadership?
We tried to get Texas State but it seemed their fans and administration only wanted to go to the Pac. That is fine. I think we came out better with UTEP and NIU. I wouldn't mind in the future to pick up another Texas school though.
I need an actual lawyer to chime in here… where’s @reagan21 when you need him?
Page 3 outlines distributions… annually, no later than June 30th. Last year’s payment would have been made prior to the traitors making any announcements, so per the bylaws the next two would be withheld and used to cover exit fees.
Part of the argument being made by at least two of the traitors is that they never notified the MW and therefore aren’t “officially” out of the MW and should have voting rights, etc.
Silly game the courts would likely discourage due to how you’ve acted in public, including publicly announcing that you are in fact joining the PAC. At best this would be viewed as dumb semantics and at worst would likely bias the court against you for violating the spirit of the agreement you signed and trying to “game the system”.
You don’t get to have your cake and eat it too.
As far as any injunction would be concerned, I don’t think the courts could necessarily force the MW to violate their own bylaws and pay the traitors their regularly scheduled payments. They could potentially freeze those payments and prevent the MW from redistributing them while litigation continued, but I can’t see them forcing them to pay while the payments are in dispute.
Again, lots in play that needs to play out, but these fees owed aren’t getting thrown out by a judge any time soon. Depending on how much stomach either side has to continue to pay lawyers it could go on for quite awhile.
Texas State is about as much as they could hope for. But then going on about UTSA and UNT as options to get to 9 or 10 members goes against everything the PAC was trying to accomplish by breaking up the MW.
Maybe.
If it’s to come in as partial members with reduced share and voting rights you’d think the MW would just offer them as full members. 🤷🏽♂️
If they get an offer anywhere below around 80-90%, they likely would be just as well off if the MWC offered them a full membership! That number started at 70%, but it keeps dropping the longer it take the PAC to get a deal. Also, the PAC needs to worry about losing to the MWC, in which case they could very well get hit with all the legal fees, while it is highly unlikely that the MWC would get hit with legal fees since they are the defendant, and the defendant rarely gets stuck with the legal fees of those that filed suit!
I didnt like when the the MW was targeting Texas State. Living here and knowing a good amount of almuni, I have never met a single person that gave 2 shits about anything sports related with that school. They all nearly to the person were UT fans hard core.
That being said, Texas State was the MW's second choice after UTEP FWIW. And they turned us down. Basically holding out for the PAC if that means anything. Probably that the contracts, even at a lesser share was that much better. Likely the reduced share would be temporary, so that could be why they still don't want the to join the MW.
The reason that UNT and UTSA are more likely is that they are not getting the same money as the legacy members like Memphis and Tulane. Which could mean the exit fees could be negotiated down lower since the media value tends to be a major concern with those final settled numbers.
If media distributions are annual then it really doesn't matter whether the traitors have officially notified the conference yet. We'll maybe not. As long as they can't legally witheld any funds then they could be due for this seasons football revenue. Unless all media comes together, not sure how that works.
Wither way the MW would only get to withhold 26 mil in base media revenue if the courts let them.
To your point though, I do think that a judge can prohibit the withholding of the media revenue since because that is the thing that is being disputed. But you may be right that it will be withheld but cannot be used.
Remember according the bylaws they aren't technically out since they haven't officially resigned until they announce to the conference in writing with 5 grand. It seems that legally they can easily have their cake and eat it too. They can sign an agreement with another conference and announce their intent to depart in the media but until they pay that 5 k they are in the MW officially
How can Tulane and Memphis afford to even consider leaving the AAC? I read if they wait and give 27 months notice it is reduced to $10 mill. UConn paid $17 mill when they left for the Big East. Cincy, Houston and UCF paid $18 each to exit
Because they all think contracts don't apply and they can do whatever they want with 0 penalty... sometimes adults need to learn hard expensive lessons or you end up with a stupid society where agreements mean nothing
Not only that, but what if the ACC or Big 12 considers them in the future? Let's say that their AAC buyout is negotiated down to 18 million. Then, the Pac whatever chips in
10 mil each. They each would be on the hook for 8 million plus the Pac buyout, should they try to go to P4.
OP now believes this only applies for schools going from DII to DI. Not FCS to FBS. They're still looking into it.
So again, if any lawyers want to chime in… but it doesn’t really work this way.
I’ll admit that deciphering some of the language in the bylaws can be tedious, but the penalty for exiting the conference is pretty clear, as are the mechanisms for collection.
You say you’re leaving… we keep your money… you still owe the rest.
They’re trying to argue (and you think they have a case) that they didn’t tell you they were leaving, in the way you asked them to so that means they aren’t leaving… even though they told EVERYONE they were leaving.
Childish at least and fraudulent at worst. In the courts eyes ACTIONS speak, and the actions you have taken define your intent. This is bad faith acting and it opens you up for damages beyond any exit fees.
It also opens up a whole can of worms for you where the MW can subpoena all sorts of communications between yourself and any of the other schools in this matter… I wonder what they’d find.
To the matter of whether or not a judge could force the MW to pay…
At the heart of the case it is the MW Bylaws that are being sued. A judge is not going to rewrite what that document spells out before any final adjudication… a judge is not going to say “pay them now” without knowing who is going to win, there by disabling the collection method of the bylaws and forcing the MW to sue them again to collect later should the MW be successful at defending against this case.
BUT they could issue an injunction against the MW distributing any of those funds UNTIL the case is adjudicated or settled. In which case there would be no lump sum payment to UNLV that included those funds until they were cleared.
You also keep doing this thing with numbers where you round down to make things look better for your argument. You mention being able to withhold $26 million of base media revenue… for one, nothing in the bylaws says anything about “base media” as the source of distributions. It says “all payments”, which I take to mean everything. Second, everything printed puts the exit fee as 3 x $6 million for $18 million, so not sure how you’re coming up with $5.2 million per school to total $26 million.
*Fun side note: the exit fee is defined as 3 years of AVERAGE conference distributions. Well Boise was getting more than everyone else, which bumps up the average to be more than any of the other schools were getting. Which means they’ll all be paying a small part of Boises exit fee 😂.
All in all they’re acting like a man who left his wife and moved in with his girlfriend, but disputes his prenup when his wife files for divorce by telling the court that he never told his wife he was leaving.
I believe the Pac now has zero exit fee for going to P4.
No, for the traitors as well. Correct me if I'm wrong. But I rarely am.
I believe this is correct. At least, the contract given to USU had that clause.
I found this in a news article. It doesn't say exit fees but instead refers to damages. They say they got this information from a public records request...
"Schools may leave before 2031 with a least one year’s notice only if they receive an A4 invitation. Schools must pay damages equal or greater of two times that school’s PAC-12 distribution for the preceding year or the aggregate amount the media rights fees are reduced under the media rights agreement as a result of such school’s departure for equivalent two contract years. If there is only one year left than it’s media rights fees for one year. Should multiple schools leave in the same year the media rights fee is calculated and split across the departing schools."
New PAC-12 term sheet reveals what Sacramento State is getting themselves into
A five-year deal and million dollar penalties are just some of the points.
www.abc10.com
I just strted a new position and I barely have time to keep up with all the transfers, let alone language in conference bylaws.
Please get your priorities in order.
WE need you!
So… 3X the prior years “average annual revenue distribution” for leaving to a non A4 conference with at least one years notice, hmmm… where have I heard that before?I found this in a news article. It doesn't say exit fees but instead refers to damages. They say they got this information from a public records request...
"Schools may leave before 2031 with a least one year’s notice only if they receive an A4 invitation. Schools must pay damages equal or greater of two times that school’s PAC-12 distribution for the preceding year or the aggregate amount the media rights fees are reduced under the media rights agreement as a result of such school’s departure for equivalent two contract years. If there is only one year left than it’s media rights fees for one year. Should multiple schools leave in the same year the media rights fee is calculated and split across the departing schools."
New PAC-12 term sheet reveals what Sacramento State is getting themselves into
A five-year deal and million dollar penalties are just some of the points.
$40 million in liquidated damages if you don’t end up joining for any reason… wow, sure seems like they’re trying to protect their little old conference from the big bad Mountain West from trying to steal back any of their teams.
I also notice this document, signed on September 11, 2024, 3 months before their lawsuit, is signed by CSU and Boise. I imagine there’s another out there signed by USU.
Guessing that public document is Exhibit A for the MW.
Traitors: “We’re being taken advantage of!”
Judge: “But you agreed to the same terms with the conference you’re moving to?”
Traitors: ……
Traitors: “Anti TRUST!”
Traitors: But, we haven't given notice to the MW.
Judge looking at the signed agreement to join Pac12: Judge gives a stink eye look at Plaintiffs.
If there is no enforceability clause in the contract then they (the MWC) have an uphill climb. That is in all of our commercial loan contracts and asking to remove it is a deal breaker because if it goes to court we know we will almost certainly lose.
It is 100% hypocritical.
But it is 3x for a 2 year notice with MW to be fair. And they do have the P4 free pass so it seems. Not exactly apples to apples. Also what non P4 conference would the PAC teams really want to go to? Chances are they will be making more than any other G5 so it really doesn't matter.
Some perspective. If the PAC followed the same rules as the MW with it's witholding of funds when the 8 left last year, the PAC would have had to have pay back the exiting schools 418 million after they settled exit fees at 65 million total. The PAC made 604 mil in 2023.
We laugh at these lawsuits, but the MW does have more than egregious policies with the exit fees and the associated bylaws. Which makes me think they may have some meat on the bone with some of these. The poaching fee agreement was made when the PAC was desperate, and we are trying to double dip exit fees.
It also makes me think we need to get out of this chickenshit conference. The longer we stay the deeper we dig ourselves in this hole. These policies are terrible.
Truth is that the MW is abusing it's members with it's fees. Sure our teams agree to it, because we don't have a choice. The vast majority of the teams have nowhere else to go, so they will allow crazy high exit fees because it doesn't affect them. But a team like UNLV? It certainly does.
Say the P4 invite never comes, and the PAC is making much more than us per year. Our extra money for staying runs out. It is actually in UNLV's interest that some of these exit fees gets settled down a good amount, even if it hurts our bonus money now. Because if they hold up more than the national average then a precedent is set and it will cost us even more if we try to get out later.
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First, a bit of housekeeping....
I haven't been able to figure out what "One years notice or two years notice" actually means in terms of "time". All the schools leaving have given notice (or publicly announced) their intention to leave with less than two years notice, by several months, and yet it's considered "two years notice". I've brought this up before and was told by someone on here, who I think would know, that anything more than one year is considered two years. I know the deadline is either June 1st or July 1st per MW Bylaws, which I believe aligns with when annual revenues are distributed... so maybe it actually make sense, and it's probably the same deal with the PAC.
So if UNLV notifies the MW on May 1st it's going to the PAC, then it would be 2 years notice.
As for the rest, I think you're missing some points...
The whole purpose of exit fees is to protect the small schools in order to have a sustainable conference. It's the agreement the "haves" make with the "have nots" so that they can have the benefit of having a conference within which to play. It's not the "haves" who are ever at risk, because as you rightly point out, they'd be leaving for (likely) much more money. But in doing so there is harm that is caused to the other teams with their conference and that is what the exit fees are for.
The "haves" DO NOT HAVE TO AGREE TO IT, but THEY DO because it benefits them. They willingly accepted the benefits of having a conference in which to play, the exit fees are merely the insurance premiums they agreed upon. If they were as big and bad and as important as they thought they were why didn't they go independent a long time ago?
When the agreement was reached there was still a P5 and Boise and SDSU had already shown their ass. Any egregiousness of the fees was not to prevent UNM from going to the Sunbelt... it was to defend itself against Boise and SDSU pulling their BS again. The rest of the teams didn't have to let them back in, but they were allowed to do so based on certain conditions.
The exit fees with the PAC agreement are nearly identical (if not completely identical), when you consider how 1 year or 2 years is defined... which I'd imagine is the same... so I'm considering that apples to apples.
The "hypocrisy" isn't my point in terms of me wagging my finger at someone... it's THE legal argument. They're trying to make the legal argument that "what's good for the goose IS NOT good for the gander". They argue AGAINST in court and then AGREE to the same exact terms outside the court. There is no leg to stand on with this legal argument.
Desperation on the part of the PAC 2 is not of ANY concern to the MW. The MW is a private entity that reserves the right to refuse service to anyone it wants to. "Poor me" is not a valid legal strategy... especially when you turn around and do the exact thing the agreement was in place to defend against. The MW is not a federally regulated industry that must provide you with services just because your money is green... piss off and go play the Sunbelt teams.
As far as "double dipping" goes and that argument... these were independent agreements made at different times and under different conditions. They were never intended for this type of scenario. I can see why some people want to point to them as an argument against, but I really don't see how they hold water. They were never intended to be used during Armageddon because nobody thought that would ever happen. It's a bit rich to argue about the cost when you're the ones who dropped the nukes.
I don't see the one year two year as black and white reading material. My understanding of the MW agreement is that there are specific exit fee amounts for "Less than ONE year notice" and specific exit fees for "More than ONE year notice. Less than one year notice is double the exit fee of what would be paid for more than one year notice. So, if they give notice 366 days before leaving then they owe us roughly $17 million (dollar amount will vary depending on the amount of revenue distributed by the conference. Note, I'm not saying specifically media revenue although that is a part of it in addition to other revenues earned by the conference for that year).
Less than one year notice will be 2 x ~$17 million ($34 million).
More than one year notice will be ~$17 million.
So it looks like it's "timely" versus "late notice", so...
Timely = "on or before June 1st of the preceding year" to leave on July 1st of the following year would be 3X average annual payouts. So 13 months. Anything less than that would be "late notice" and subject to double that.
I can't cut and paste just the section I want but you can find it here:
Just quibbling. I recently read the exit fees at $ 19 mil and $ 38 Mil.
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It's not quibbling as it is a valid perspective. Boizee will even be paying more as they were earning more than the others. Their share could be at a minimum $21 million. I think it will be actually a little more.
What is ironic is last year those schools going to the pac made a lot of NCAA Tourney units for us which we get to keep AND it bumps up their exit fees.
Thank you for that link. I've wanted a copy of those bylaws forever. I downloaded them and from the download it's a simple cut and paste if you need to do that in the future.
