Estimate for MWC media deal

[oneepstein]

But the point I am making is that the MW does have egregious exit fees, well above industry standard.

Sure the PAC is now making similar if not identical fees. But there IS a big difference. The MW has laws that try to punish teams going for greener pastures, when the PAC does not. Unless the AAC or something somehow gets some sort of crazy new media deal above what the PAC will get, which seems unlikely since they have lost more than they have gained since their last media deal. Otherwise if reports are true, there are no fees for moving up to P4. Something our previous bylaws did not allow.

Define "industry standard" with some examples. I find a wide ranging amount of examples that are all over the place, but all with the specific intent of protecting the conference as necessary. The Big10 and SEC for example don't seem all that punitive, because who the Hell is going to leave one of those conferences? The ACC on the other hand is 3x the conference operating budget, which is massive.

Penalties for leaving are structured commensurate to the specific protections the conference believes it needs at the time they are agreed to. At the time ours were agreed to they were what was deemed necessary to protect from what was happening. You differentiating some BIG difference between the Pacs agreement ant the MWs agreement is also not applicable as a differentiator since the MW also now has the P4 exemption for all schools, and as near as I can tell had it BEFORE the new Pac did. So again, Apples to Apples.

Exit fees get negotiated. They always do. I personally don't know why when things seems to be laid out legally, I just know they get negotiated every single time.

Absolutely, and I fully expect that this time as well. They get negotiated every single time because that's the way the legal system works, no matter the type of case being litigated. Criminal or civil, it doesn't matter, it's all a negotiation before anything ends up in court. You lay out your case to your opponent, they lay out their case to you, and then you both decide your tolerance for risk and lawyers fees if you actually take it to someone else to decide, judge or jury. Stuff happens in the middle to try and advance your side, but ultimately its about how much you're willing to risk.

The poaching fees are a separate agreement, but they are essentially trying to get paid twice for the same thing. It is unprecedented. It may have nothing to do with each other, but if poaching fees hold up (even if they get reduced at all) it will at the very least it will be a contested point when it comes to settling the exit fees later. If exit fee situations with other conferences have any bearing on this situation, which I believe will, then you can not ignore the total amount the MW is demanding to extract from this transaction as a factor.

Nobody TRIED to get paid this way, but based on the actions of the parties involved this is how it's working out. It's "unprecedented" only because the situation of the scheduling agreement is also unprecedented. Both agreements were years apart and have no bearing on each other. You can't say "it isn't fair that it should work out so well in their favor"... I mean you can try, but it's a crap argument. What was the MW supposed to do when approached about the scheduling agreement? Just say "Ok cool... we don't need to protect our conference... you guys are cool right?" No, absolutely not.

Doesn't mean its a bad argument to make, and they're obviously making it, but it holds so little water based on their actions its not even funny.

The PAC 2 got screwed more than any other group of teams when it comes to being decimated by realignment.

Not the MW problem.

I get that is what it was agreed amongst the conference members. But members always agree to certain terms, but they never hold up 100%.

*See: Negotiations.

"Poor me" may be a valid legal strategy.

No it isn't. Again, you can try to use it to gain some sympathy with a judge or jury, but ultimately your actions prove against you.

You think the MW DIDN'T take advantage of the PAC 2? We 100% did. We made them pay a premium for our games this past year, and demanded poaching fees. They did not have many other options, so it's not like they could have said no with such short notice.

Take advantage? Again, the MW is a private institution whose only responsibility is to their members. They. Do. Not. Have. To. Serve. You. It was a negotiation and the one with the power sets the price. Don't pay it if you don't want.

Gun to my head, I don't think the poaching fees get thrown out, though I would be a little surprised if they didn't get at least reduced. The Exit fees are going to get reduced, the only question is by how much.

Ultimately I don't think anything actually makes it to a court room for a jury or judge to decide. If it does then we'll see, but I don't expect a judge is going to wade too deeply into these waters. To my knowledge not one of these cases has ever made it to a point of a judge or jury deciding an outcome. The pressure from the larger conferences would definitely come into play in setting any sort of precedent.

 

[dcut03]

Define "industry standard" with some examples. I find a wide ranging amount of examples that are all over the place, but all with the specific intent of protecting the conference as necessary. The Big10 and SEC for example don't seem all that punitive, because who the Hell is going to leave one of those conferences? The ACC on the other hand is 3x the conference operating budget, which is massive.

Penalties for leaving are structured commensurate to the specific protections the conference believes it needs at the time they are agreed to. At the time ours were agreed to they were what was deemed necessary to protect from what was happening. You differentiating some BIG difference between the Pacs agreement ant the MWs agreement is also not applicable as a differentiator since the MW also now has the P4 exemption for all schools, and as near as I can tell had it BEFORE the new Pac did. So again, Apples to Apples.

Absolutely, and I fully expect that this time as well. They get negotiated every single time because that's the way the legal system works, no matter the type of case being litigated. Criminal or civil, it doesn't matter, it's all a negotiation before anything ends up in court. You lay out your case to your opponent, they lay out their case to you, and then you both decide your tolerance for risk and lawyers fees if you actually take it to someone else to decide, judge or jury. Stuff happens in the middle to try and advance your side, but ultimately its about how much you're willing to risk.

Nobody TRIED to get paid this way, but based on the actions of the parties involved this is how it's working out. It's "unprecedented" only because the situation of the scheduling agreement is also unprecedented. Both agreements were years apart and have no bearing on each other. You can't say "it isn't fair that it should work out so well in their favor"... I mean you can try, but it's a crap argument. What was the MW supposed to do when approached about the scheduling agreement? Just say "Ok cool... we don't need to protect our conference... you guys are cool right?" No, absolutely not.

Doesn't mean its a bad argument to make, and they're obviously making it, but it holds so little water based on their actions its not even funny.

Not the MW problem.

*See: Negotiations.

No it isn't. Again, you can try to use it to gain some sympathy with a judge or jury, but ultimately your actions prove against you.

Take advantage? Again, the MW is a private institution whose only responsibility is to their members. They. Do. Not. Have. To. Serve. You. It was a negotiation and the one with the power sets the price. Don't pay it if you don't want.


Ultimately I don't think anything actually makes it to a court room for a jury or judge to decide. If it does then we'll see, but I don't expect a judge is going to wade too deeply into these waters. To my knowledge not one of these cases has ever made it to a point of a judge or jury deciding an outcome. The pressure from the larger conferences would definitely come into play in setting any sort of precedent.

I haven't seen many of the bylaws, just where things have been settled. So you may be right, some of these other conferences may be just as punitive in their bylaws. But where things have been settled have been significantly less.

Many have been acting like every last penny of the exit fee will be collected. That just isn't how this works.

In terms of where things have been settled, the starting point is usually 2x the base media value. Whether it gets negotiated down to that, or down from that. The most I have seen is 2x base media value. The one exception is SMU, but they left with < 1 year notice, they left by themselves, and agreed to join the ACC for free. So probably not the best comp.

You related this to a civil case, which I think is relevant. Since the terms of the contract/bylaws aren't fully enforceable., I think the total amounts collected is relevant. Like a civil case, whether or not certain fees are "fair" or "justified" comes into play. Bottom line, pun intended, is the bottom line. The total that the MW is trying to extract from the PAC is relevant. The fact that the MW did take advantage of the the PAC-2's situation is their problem, if they are trying to extort more money from them. And yes it is more money.

Case in point we paid Syracuse 300k to play us at Allegiant. We charged the PAC 2 14 million for 14 games. Typically the home team pays the visiting team for OOC games. So they basically paid us an average of 2 mil for their home games, and we didn't pay them to travel to play us. We got 1.5 million for playing Michigan. We already took them to the shed for that agreement.

The MW totally took advantage of the PAC 2 which didn't have a lot of options. And we are trying to do it again. I think that in a courtroom/ negotiations all of these factors will be brought up. I don't see how they could not.

 

[Rebel1986]

The MWC will get $50 million per school! The reason is because I said so, so it must be true. The PAC will be getting $50 per school!

 

[oneepstein]

I haven't seen many of the bylaws, just where things have been settled. So you may be right, some of these other conferences may be just as punitive in their bylaws. But where things have been settled have been significantly less.

Many have been acting like every last penny of the exit fee will be collected. That just isn't how this works.

In terms of where things have been settled, the starting point is usually 2x the base media value. Whether it gets negotiated down to that, or down from that. The most I have seen is 2x base media value. The one exception is SMU, but they left with < 1 year notice, they left by themselves, and agreed to join the ACC for free. So probably not the best comp.

You related this to a civil case, which I think is relevant. Since the terms of the contract/bylaws aren't fully enforceable., I think the total amounts collected is relevant. Like a civil case, whether or not certain fees are "fair" or "justified" comes into play. Bottom line, pun intended, is the bottom line. The total that the MW is trying to extract from the PAC is relevant. The fact that the MW did take advantage of the the PAC-2's situation is their problem, if they are trying to extort more money from them. And yes it is more money.

Case in point we paid Syracuse 300k to play us at Allegiant. We charged the PAC 2 14 million for 14 games. Typically the home team pays the visiting team for OOC games. So they basically paid us an average of 2 mil for their home games, and we didn't pay them to travel to play us. We got 1.5 million for playing Michigan. We already took them to the shed for that agreement.

The MW totally took advantage of the PAC 2 which didn't have a lot of options. And we are trying to do it again. I think that in a courtroom/ negotiations all of these factors will be brought up. I don't see how they could not.

Every conference is going to be looking out for their best interests first and foremost... the size and scope of their "penalties" seem to be commensurate with the actual harm a departure would cause. The Big Ten and SEC seem to have less concern with one of their teams leaving, since there are not greener pastures, while the ACC is obviously worried about losing their teams to them and have penalties that reflect that.

No different with the MW or what the PAC is doing with their agreements. The penalties are also geared towards the most powerful members and not the ones who would never leave. They have to be uniform as well.

I didn't relate it to a civil case, it 100% is civil of course, but all cases, criminal or civil, go through the same bits of negotiation. Obviously some criminal trials are absolute slam dunks and no negotiations occur and no deals are offered, but even those usually get "settled" just to avoid the courtroom.

The "enforceability" aspect is somewhat irrelevant... no contract or by laws are "enforceable" until such time as a judge or jury decides that they are and a judgement is issued.

And again, terms like "took advantage" or "fair" or "egregious" or whatever platitude you want to insert are wholly subjective. Could a judge or jury think those terms apply? Absolutely. Are they likely to? I don't think they are when you look at all the factors that have been laid out a million times... The MW didn't need the PAC... The MW wasn't obligated to do business with the PAC... Exit fees are a normal way for a conference to protect its members... The PAC has structured their agreements and penalties in the exact same way... The PAC did EXACTLY the thing the MW was trying to protect themselves against, which was 100% their right... etc.

So based on those facts my OPINION is only that the PAC's arguments aren't very good, and my OPINION would be to tell them to pound sand and we'll see you in court... my OPINION is that I have a strong case to make IF it goes to court and I would bet on that by risking what a judge or jury would have to say...

But again that would just be my OPINION and I'd be risking losing my argument.

The other side obviously disagrees and believes they have a good chance of winning.

It's all a game of chicken until its not.

I've also never thought the MW would collect all of the money from either agreement.

 

[RebelinWA]

Genuinely enjoying the conversation. Thank you guys. I don't work in the legal field, so this is all potatoes to me.

 

[dcut03]

Every conference is going to be looking out for their best interests first and foremost... the size and scope of their "penalties" seem to be commensurate with the actual harm a departure would cause. The Big Ten and SEC seem to have less concern with one of their teams leaving, since there are not greener pastures, while the ACC is obviously worried about losing their teams to them and have penalties that reflect that.

No different with the MW or what the PAC is doing with their agreements. The penalties are also geared towards the most powerful members and not the ones who would never leave. They have to be uniform as well.

I didn't relate it to a civil case, it 100% is civil of course, but all cases, criminal or civil, go through the same bits of negotiation. Obviously some criminal trials are absolute slam dunks and no negotiations occur and no deals are offered, but even those usually get "settled" just to avoid the courtroom.

The "enforceability" aspect is somewhat irrelevant... no contract or by laws are "enforceable" until such time as a judge or jury decides that they are and a judgement is issued.

And again, terms like "took advantage" or "fair" or "egregious" or whatever platitude you want to insert are wholly subjective. Could a judge or jury think those terms apply? Absolutely. Are they likely to? I don't think they are when you look at all the factors that have been laid out a million times... The MW didn't need the PAC... The MW wasn't obligated to do business with the PAC... Exit fees are a normal way for a conference to protect its members... The PAC has structured their agreements and penalties in the exact same way... The PAC did EXACTLY the thing the MW was trying to protect themselves against, which was 100% their right... etc.

So based on those facts my OPINION is only that the PAC's arguments aren't very good, and my OPINION would be to tell them to pound sand and we'll see you in court... my OPINION is that I have a strong case to make IF it goes to court and I would bet on that by risking what a judge or jury would have to say...

But again that would just be my OPINION and I'd be risking losing my argument.

The other side obviously disagrees and believes they have a good chance of winning.

It's all a game of chicken until its not.

I've also never thought the MW would collect all of the money from either agreement.

Personally I like the black and white.

I look at the agreed terms that they signed and would love to take it at face value. You agreed to these terms, so live with them. So at my core, I think all the fees should hold up. You should have to live with the decisions that you make.

Unfortunately the truth is that isn't how this works. Exit fees get negotiated down, and there seems to be a lot of chatter that the poaching fees will not necessarily hold up as well.

Given that it at least seems like a possibility that not just the exit fees will be reduced, I look at all the reasons why those arguments could benefit the PAC.

You cannot deny that the MW had the PAC by the short and curlies. The PAC was screwed. The 10 that left did so somewhat late, and the PAC 2 had to see if any other conference would take them before decided to stay as the PAC for now. There was no way that could find an independent schedule that late in the game.

The MW charged them an exorbitant rate for last season's scheduling agreement. None of that part of the agreement is contested, but it is part of the big picture here. Considering "fairness" of these contracts is contestable with these negotiations, this is for sure a part of the discussion.

With that heavily MW-friendly agreement, they shoehorned the poaching fees on top of that. The PAC had zero leverage and agreed to it. I still think they thought a reverse merger was likely at that point, and/or knew that this contract was a bit egregious and at the very least they could contest it later which of course is what is happening now.

So I look at what are reasonable fees in these cases. The PAC was taken advantage of, just with the base scheduling agreement alone. So what will a judge think is fair? How much is considered borderline extortion?

Sure the MW is trying to protect themselves I get it. But how much is too much? What if your company demanded 3 times your annual salary as a non compete to go to competitor? And then demand another 2x's your salary on top of that to go to a specific competitor? Would a judge allow that? Even if you signed a contract, do you think that would hold up?

I honestly don't know what will happen with the poaching fees. We have never seen this happen before. But if they hold up, I still think they will be a bargaining chip with the exit fees.

 

[Meister_Rebel]

I was lurking over at the UTEP forum and saw this posted there: The part about the 48 to 55 million increase range is the part to look at. I was thinking 7 million but that might have been wishful thinking. This is just someone's post so take it for what it is worth. The guy could be full of shit.

 

[Meister_Rebel]

I was lurking over at the UTEP forum and saw this posted there: The part about the 48 to 55 million increase range is the part to look at. I was thinking 7 million but that might have been wishful thinking. This is just someone's post so take it for what it is worth. The guy could be full of shit.

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So from $270 million to let's say $320 million but with less football mouths to feed we are looking closer to $5 million each. Lower number than the math because I have no idea what we are paying the non-football schools.

edit: If we get the money Gloria was talking about then we will be closer to $8 million if you average out including the one time big payment.

 

[Masked_rebel]

So from $270 million to let's say $320 million but with less football mouths to feed we are looking closer to $5 million each. Lower number than the math because I have no idea what we are paying the non-football schools.

edit: If we get the money Gloria was talking about then we will be closer to $8 million if you average out including the one time big payment.

That's why we are staying... we're getting close to 8 million a yr. If the Pac gets 10 then it's a wash at worse. We lose nothing by staying and dominating a WAC conference which is basically what Boise did before joining the MWC after trying to go to the P6. The Pac will still be there in 5 years and if we fail at our P4 aspirations then we join the Pac coming in with a football program that's hopefully on a 5 yr run of epic levels...

 

[Meister_Rebel]

That's why we are staying... we're getting close to 8 million a yr. If the Pac gets 10 then it's a wash at worse. We lose nothing by staying and dominating a WAC conference which is basically what Boise did before joining the MWC after trying to go to the P6. The Pac will still be there in 5 years and if we fail at our P4 aspirations then we join the Pac coming in with a football program that's hopefully on a 5 yr run of epic levels...

I agree. Those guys may get $10 million but after the exit fees (once reduced to say $12 million) they will get about $8 million. The bonus is that we get to keep the NCAA Tourney money that they are leaving us. So, we may be coming out ahead in those 5-6 years.