Stanford, Cal, and SMU - Welcome to the ACC

[JasonEvans]

I mean, they've already stated they want out, so that doesn't make a reasonable wager. And - barring something cataclysmic - they will be playing football in the ACC next season.

So, I'd say the wager would be they have an exit plan including a destination and timeline.

Is there a crazy world where FSU announces it is leaving for the SEC in 2030 or something like that? Hmmmm... well, I guess I will have to risk that. I am good with this wager if you are. Grand Traverse Pie Company, ok? Winner picks the pie of his choice (probably Lakeshore Berry Crumb for me).

Hey Mtn.Devil, just making sure we are good to go on this wager...

 

[Matches]

Ok, so here is the GOR for anyone who hasn’t seen it. This is the version signed in 2013, which ran through 2027. It was later extended through 2036, which matches the length of the 20-yr contract the ACC signed with ESPN in 2016.

https://storageaccountstart88df.blob.core.windows.net/ndnationshare/ACC-Grant-of-Rights-1.pdf

A few things:

The GOR makes explicit reference to “the ESPN Agreement” - specifically, the GOR is required to the extent necessary for the ACC to complete its contractual obligations as laid out in the ESPN contract. There is no reference to any other contract. The GOR would become meaningless if the ESPN contract went away or was replaced by a new Agreement. I have no clue what liquidated damages or other provisions may be in the ESPN Agreement, but the takeaway is that if the ESPN Agreement isn’t iron clad, then neither is this.

The GOR provides that its terms may be amended by the members. It does not expressly state what that means. There’s a reference to “each” member needing to sign an amendment - does that require unanimity? That would be insane if true. We know the ACC requires 3/4 vote to add a member, but nothing in the GOR references that, AND it contains language indicating that the GOR is the entire agreement between the parties, IOW the four corners of this document tell you everything there is to tell. If a majority vote can amend the agreement, FSU would need 7* like-minded schools to join it, and the GOR could be amended or eliminated entirely. Supposedly 7 members were wanting out last summer - nothing preventing those 7 members from recruiting an 8th, even if “recruiting” = “making it worth #8’s $$while to go along.”

* It would be 9 if the new ACC additions are included - I see no basis to include them as they are currently still playing in other conferences, but that seemed at least worth mentioning.

The GOR is also silent as to what happens to a departing member’s cut of the TV $. If FSU were to leave the conference, and the ACC retained FSU’s media rights, does FSU still get a cut? The ACC probably would argue too bad so sad - you’re not a member anymore so we keep your rights AND your cut. But that’s not necessarily what the agreement says, and it seems VERY unlikely to me that any member would have agreed to that. That ambiguity is fodder for negotiation and compromise.

The GOR IMO is well-drafted but not inescapable. Most conferences have a GOR in place - the distinction here is the length. This isn’t going to keep everyone locked in until 2036, and almost certainly not 2030. It’s definitely an impediment to leaving, and likely the main reason the ACC hasn’t already imploded. But we’re on a clock.

 

[HereBeforeCoachK]

Ok, so here is the GOR for anyone who hasn’t seen it. This is the version signed in 2013, which ran through 2027. It was later extended through 2036, which matches the length of the 20-yr contract the ACC signed with ESPN in 2016.

https://storageaccountstart88df.blob.core.windows.net/ndnationshare/ACC-Grant-of-Rights-1.pdf

A few things:

The GOR makes explicit reference to “the ESPN Agreement” - specifically, the GOR is required to the extent necessary for the ACC to complete its contractual obligations as laid out in the ESPN contract. There is no reference to any other contract. The GOR would become meaningless if the ESPN contract went away or was replaced by a new Agreement. I have no clue what liquidated damages or other provisions may be in the ESPN Agreement, but the takeaway is that if the ESPN Agreement isn’t iron clad, then neither is this.

The GOR provides that its terms may be amended by the members. It does not expressly state what that means. There’s a reference to “each” member needing to sign an amendment - does that require unanimity? That would be insane if true. We know the ACC requires 3/4 vote to add a member, but nothing in the GOR references that, AND it contains language indicating that the GOR is the entire agreement between the parties, IOW the four corners of this document tell you everything there is to tell. If a majority vote can amend the agreement, FSU would need 7* like-minded schools to join it, and the GOR could be amended or eliminated entirely. Supposedly 7 members were wanting out last summer - nothing preventing those 7 members from recruiting an 8th, even if “recruiting” = “making it worth #8’s $$while to go along.”

* It would be 9 if the new ACC additions are included - I see no basis to include them as they are currently still playing in other conferences, but that seemed at least worth mentioning.

The GOR is also silent as to what happens to a departing member’s cut of the TV $. If FSU were to leave the conference, and the ACC retained FSU’s media rights, does FSU still get a cut? The ACC probably would argue too bad so sad - you’re not a member anymore so we keep your rights AND your cut. But that’s not necessarily what the agreement says, and it seems VERY unlikely to me that any member would have agreed to that. That ambiguity is fodder for negotiation and compromise.

The GOR IMO is well-drafted but not inescapable. Most conferences have a GOR in place - the distinction here is the length. This isn’t going to keep everyone locked in until 2036, and almost certainly not 2030. It’s definitely an impediment to leaving, and likely the main reason the ACC hasn’t already imploded. But we’re on a clock.

Well done sir, and I think the best breakdown we've seen so far, and there have been some excellent points made all around by a lot of folks. FWIW.....which may be nothing....I've highlighted the points you made that had struck me as potentially problematic as well.

There's also the notion of the universe of an industry changing totally during a long contract......and that invites, and perhaps properly so, rust on any iron clad agreement.

 

[Mike Petrik]

Ok, so here is the GOR for anyone who hasn’t seen it. This is the version signed in 2013, which ran through 2027. It was later extended through 2036, which matches the length of the 20-yr contract the ACC signed with ESPN in 2016.

https://storageaccountstart88df.blob.core.windows.net/ndnationshare/ACC-Grant-of-Rights-1.pdf

A few things:

The GOR makes explicit reference to “the ESPN Agreement” - specifically, the GOR is required to the extent necessary for the ACC to complete its contractual obligations as laid out in the ESPN contract. There is no reference to any other contract. The GOR would become meaningless if the ESPN contract went away or was replaced by a new Agreement. I have no clue what liquidated damages or other provisions may be in the ESPN Agreement, but the takeaway is that if the ESPN Agreement isn’t iron clad, then neither is this.

The GOR provides that its terms may be amended by the members. It does not expressly state what that means. There’s a reference to “each” member needing to sign an amendment - does that require unanimity? That would be insane if true. We know the ACC requires 3/4 vote to add a member, but nothing in the GOR references that, AND it contains language indicating that the GOR is the entire agreement between the parties, IOW the four corners of this document tell you everything there is to tell. If a majority vote can amend the agreement, FSU would need 7* like-minded schools to join it, and the GOR could be amended or eliminated entirely. Supposedly 7 members were wanting out last summer - nothing preventing those 7 members from recruiting an 8th, even if “recruiting” = “making it worth #8’s $$while to go along.”

* It would be 9 if the new ACC additions are included - I see no basis to include them as they are currently still playing in other conferences, but that seemed at least worth mentioning.

The GOR is also silent as to what happens to a departing member’s cut of the TV $. If FSU were to leave the conference, and the ACC retained FSU’s media rights, does FSU still get a cut? The ACC probably would argue too bad so sad - you’re not a member anymore so we keep your rights AND your cut. But that’s not necessarily what the agreement says, and it seems VERY unlikely to me that any member would have agreed to that. That ambiguity is fodder for negotiation and compromise.

The GOR IMO is well-drafted but not inescapable. Most conferences have a GOR in place - the distinction here is the length. This isn’t going to keep everyone locked in until 2036, and almost certainly not 2030. It’s definitely an impediment to leaving, and likely the main reason the ACC hasn’t already imploded. But we’re on a clock.

Unless a contract says otherwise it can be amended only if each and every party agrees. Black letter contract law, and not insane at all.

 

[budwom]

Ok, so here is the GOR for anyone who hasn’t seen it. This is the version signed in 2013, which ran through 2027. It was later extended through 2036, which matches the length of the 20-yr contract the ACC signed with ESPN in 2016.

https://storageaccountstart88df.blob.core.windows.net/ndnationshare/ACC-Grant-of-Rights-1.pdf

A few things:

The GOR makes explicit reference to “the ESPN Agreement” - specifically, the GOR is required to the extent necessary for the ACC to complete its contractual obligations as laid out in the ESPN contract. There is no reference to any other contract. The GOR would become meaningless if the ESPN contract went away or was replaced by a new Agreement. I have no clue what liquidated damages or other provisions may be in the ESPN Agreement, but the takeaway is that if the ESPN Agreement isn’t iron clad, then neither is this.

The GOR provides that its terms may be amended by the members. It does not expressly state what that means. There’s a reference to “each” member needing to sign an amendment - does that require unanimity? That would be insane if true. We know the ACC requires 3/4 vote to add a member, but nothing in the GOR references that, AND it contains language indicating that the GOR is the entire agreement between the parties, IOW the four corners of this document tell you everything there is to tell. If a majority vote can amend the agreement, FSU would need 7* like-minded schools to join it, and the GOR could be amended or eliminated entirely. Supposedly 7 members were wanting out last summer - nothing preventing those 7 members from recruiting an 8th, even if “recruiting” = “making it worth #8’s $$while to go along.”

* It would be 9 if the new ACC additions are included - I see no basis to include them as they are currently still playing in other conferences, but that seemed at least worth mentioning.

The GOR is also silent as to what happens to a departing member’s cut of the TV $. If FSU were to leave the conference, and the ACC retained FSU’s media rights, does FSU still get a cut? The ACC probably would argue too bad so sad - you’re not a member anymore so we keep your rights AND your cut. But that’s not necessarily what the agreement says, and it seems VERY unlikely to me that any member would have agreed to that. That ambiguity is fodder for negotiation and compromise.

The GOR IMO is well-drafted but not inescapable. Most conferences have a GOR in place - the distinction here is the length. This isn’t going to keep everyone locked in until 2036, and almost certainly not 2030. It’s definitely an impediment to leaving, and likely the main reason the ACC hasn’t already imploded. But we’re on a clock.

I dunno, if it's on a clock it's on a very very very slow clock. Every single ACC school has been into examine the original agreement, and despite numerous episodes of huffing and puffing, FSU is still around. I agree it's not rock solid until 2036, but it's easily escapable either.

 

[HereBeforeCoachK]

Unless a contract says otherwise it can be amended only if each and every party agrees. Black letter contract law, and not insane at all.

I "think" what Matches meant was insane was the requirement that ALL parties had to agree......not that it could be amended if all parties agree. But I could be wrong.....

 

[dlmzzz]

Ok, so here is the GOR for anyone who hasn’t seen it. This is the version signed in 2013, which ran through 2027. It was later extended through 2036, which matches the length of the 20-yr contract the ACC signed with ESPN in 2016.

https://storageaccountstart88df.blob.core.windows.net/ndnationshare/ACC-Grant-of-Rights-1.pdf

A few things:

The GOR makes explicit reference to “the ESPN Agreement” - specifically, the GOR is required to the extent necessary for the ACC to complete its contractual obligations as laid out in the ESPN contract. There is no reference to any other contract. The GOR would become meaningless if the ESPN contract went away or was replaced by a new Agreement. I have no clue what liquidated damages or other provisions may be in the ESPN Agreement, but the takeaway is that if the ESPN Agreement isn’t iron clad, then neither is this.

The GOR provides that its terms may be amended by the members. It does not expressly state what that means. There’s a reference to “each” member needing to sign an amendment - does that require unanimity? That would be insane if true. We know the ACC requires 3/4 vote to add a member, but nothing in the GOR references that, AND it contains language indicating that the GOR is the entire agreement between the parties, IOW the four corners of this document tell you everything there is to tell. If a majority vote can amend the agreement, FSU would need 7* like-minded schools to join it, and the GOR could be amended or eliminated entirely. Supposedly 7 members were wanting out last summer - nothing preventing those 7 members from recruiting an 8th, even if “recruiting” = “making it worth #8’s $$while to go along.”

* It would be 9 if the new ACC additions are included - I see no basis to include them as they are currently still playing in other conferences, but that seemed at least worth mentioning.

The GOR is also silent as to what happens to a departing member’s cut of the TV $. If FSU were to leave the conference, and the ACC retained FSU’s media rights, does FSU still get a cut? The ACC probably would argue too bad so sad - you’re not a member anymore so we keep your rights AND your cut. But that’s not necessarily what the agreement says, and it seems VERY unlikely to me that any member would have agreed to that. That ambiguity is fodder for negotiation and compromise.

The GOR IMO is well-drafted but not inescapable. Most conferences have a GOR in place - the distinction here is the length. This isn’t going to keep everyone locked in until 2036, and almost certainly not 2030. It’s definitely an impediment to leaving, and likely the main reason the ACC hasn’t already imploded. But we’re on a clock.

I think the GOR is quite clear about what happens to a departing member's cut of the TV $. The members do not own the broadcast (and other) rights under the GOR, the conference does. Members who depart the conference do not get paid, period. So if FSU leaves the conference and starts playing games against Alabama or Michigan, the conference owns the rights to broadcast those games, and FSU receives nothing.

 

[Matches]

I think the GOR is quite clear about what happens to a departing member's cut of the TV $. The members do not own the broadcast (and other) rights under the GOR, the conference does. Members who depart the conference do not get paid, period. So if FSU leaves the conference and starts playing games against Alabama or Michigan, the conference owns the rights to broadcast those games, and FSU receives nothing.

I assume that would be the ACC’s position. The GOR doesn’t address division of revenue. There’s likely a different agreement among the members that does.

 

[HereBeforeCoachK]

I assume that would be the ACC’s position. The GOR doesn’t address division of revenue. There’s likely a different agreement among the members that does.

To clarify, is the GOR related to the ESPN rights only? And if so, the GOR would only be as strong as the ESPN / ACC contract is, right?

 

[Matches]

To clarify, is the GOR related to the ESPN rights only? And if so, the GOR would only be as strong as the ESPN / ACC contract is, right?

Yes, on both counts.

 

[Nugget]

I assume that would be the ACC’s position. The GOR doesn’t address division of revenue. There’s likely a different agreement among the members that does.

Yes, it seems there is - the ACC Constitution and Bylaws. Someone posted on a Ga. Tech or Va. Tech board a copy of the 2020-21 version: https://gtswarm.com/threads/acc-ad-meetings-new-revenue-distribution-model.26989/page-5

I don't know if there have been amendments since then, but I'll assume not to the provisions that would matter for these purposes. For reference/interpretation by others, I'll paste in below what appear to be the potentially relevant provisions related to television rights, distributions, rights of Members and withdrawing Members and what the necessary votes would be to amend relevant documents.

It seems clear to me that, under Section 1.4.5 of the Constitution and Sections 2.5.2 and 2.10.9 of the Bylaws, withdrawing members get nothing (other than I suppose the distribution they would be due for the year in which they withdraw) from the Media Rights or any other Conference distributions of revenues.

On the point noted above about how the amend the Grant of Rights, whether or not outside observers consider it "insane," the language in Para. 8 seems to me to clearly provide that it can only be amended by unanimity: "This Agreement may not be modified or amended other than by an agreement in writing signed by duly authorized representatives of the Conference each of the Member Institutions that are then members of the Conference." I don't think there's too much risk of courts not ruling that "each" means each and every/all.

Potential ways around this with votes more like 2/3 or 3/4 than unanimity, I suppose might be to try to amend the Constitution or the Bylaws to change the revenue distribution rules or to expel members or to amend the ESPN Agreement. But, even if any of those steps could get around the GOR, it would still require at least 10 of the current members or 12 after the new schools join in a few months. So, the 7 who were trying to do it last year wasn't enough.

The main ambiguity I see between the Constitution/Bylaws and GOR is whether a mere majority could vote to dissolve the league (which, arguably would be true per Section 1.6.2 of the Constitution since dissolution isn't one of the "absolute 2/3" or "absolute 3/4" matters). I do think dissolution of the league would get around the GOR, as the GOR only grants to the Conference the "rights necessary for [the ACC] to perform the contractual obligations of the Conference expressly set forth in the ESPN Agreement," and I recall seeing someone posted that the ESPN Agreement requires the ACC have at least 15 members (and, presumably, that it exists). So, dissolving the league would enable ESPN to void the Agreement and render the GOR irrelevant.

My guess is that this is what the group of 7 was looking to do last year -- to find an 8th vote to dissolve the ACC. That will of course be tougher to do once the league expands to 18, as they would need to find 10 votes to dissolve the ACC. I don't see that happening in the near-ish future unless there is some combination of pulling together a simultaneous decision--which would require collaboration between Fox and ESPN--to say, add Florida St., Ga. Tech, Stanford and Cal to the BIG, UNC, Virginia, Virginia Tech and Clemson to the SEC, and Miami and NC St. to the Big 12 (which might finally force Notre Dame's hand to also join the BIG). In particular, it seems extremely far-fetched that ESPN would have any interest in facilitating something like this happening any time soon, as it wouldn't really move the needle for the SEC (whose rights ESPN already has), ESPN has no interest in strengthening the BIG, and ESPN would be losing the large chunk of programming it currently gets from the ACC at very favorable (to ESPN) pricing, and it would flush any value for ESPN's ownership interest in the ACC Network (not much, but also not nothing).

I do expect something along these lines to eventually happen, as we get to within 3-5 years of the expiration of the GOR and the threat of this sort of mass exit becomes more plausible, because that will lower the parties' expectations for what should be paid as a settlement/buyout to make it happen -- e.g., Texas and Oklahoma (with the help of ESPN) buying out the last year of their Big 12 GOR for about $100 million. But, for right now, it's hard to see how it makes financial sense.




Constitution

1.4.5 Withdrawal of Members. To withdraw from the Conference, a Member must file an official notice of withdrawal with each of the Members and the Commissioner on or before August 15 for the withdrawal to be effective June 30 of the following year. Upon official notice of withdrawal, the Member will be subject to a withdrawal payment, as liquidated damages, in an amount equal to three times the total operating budget of the Conference [approved under Section 2.5.1 of the Bylaws], which is in effect as of the date of the official notice of withdrawal. The Conference may offset the amount of such payment against any distributions otherwise due such Member for any Conference year. Any remaining amount due shall be paid by the withdrawing Member within 30 days after the effective date of withdrawal. The withdrawing Member shall have no claim on the assets, accounts, or income of the Conference.


1.6.2 Required Vote. …. Except as otherwise provided herein or in the Bylaws, if a quorum is present when a vote of the Directors is taken, the affirmative vote of a majority of all Directors present for such vote shall be an act of the Board. …

The Absolute Two-Thirds Matters are as follows: (i) any amendment to Article 2.5 of the Bylaws (Finances), …, (iii) entering into or amending any Material Media Rights Agreement [defined as one providing over 5% of Conference revenue]…, … , and (v) the initiation of any material litigation involving the Conference (but not, for clarity, the settlement of any litigation involving the Conference, which requires the affirmative vote of a majority of all Directors present for such vote).

The Absolute Three-Fourths Matters are as follows: (i) the admission of new Members to the Conference pursuant to Section 1.4.3, (ii) the expulsion, suspension or probation of a Member pursuant to Section 1.4.4, (iii) any amendment of this Constitution, (iv) any amendment of the Bylaws (except amendments to Article 2.5), and (v) waiver of notice or other required process for a Board meeting …..

Bylaws

2.5.2 Distribution of General Revenue. The Conference shall distribute its net revenue, including but not limited to revenue from television receipts, Conference championships, participation in preseason or postseason competition, and interest from Conference funds on deposit, according to the provisions set forth in this Article 2.5. Before distributing any net revenue to the Members, the Conference shall deduct such reserves as may be determined by the Board from time to time in accordance with Section 2.5.3. Unless otherwise specified in these Bylaws (including in Section 2.12) [which deals with visiting team football ticket allotments] or any agreement to which the Conference is a party, after deducting such reserves, the remainder of the Conference net revenue shall be divided equally among the Members and distributed in one or more installments and in equal shares to each Member by June 1, or the first business day following June 1 or such other date as determined by the Board, in accordance with the distribution plan approved annually by the Board. …

2.10 Media Rights Policy

2.10.1 Grant of Rights. The Members have granted to the Conference the right to exploit certain media and related rights of the Members (such rights, the “Media Rights”; and the agreement pursuant to which the Members granted such rights, the “Grant of Rights”).

2.10.2 Revenues from Media Rights. Unless otherwise determined by the Board, all revenues from the sale, licensing, distribution and other exploitation of the Media Rights shall be deposited with the Conference. [Note: So, changing this would be subject to the 3/4 requirement to amend per Section 1.6.2 of the Constitution]

2.10.3 Conference Media Rights Agreements. The Commissioner shall negotiate all [Media Rights agreements] on behalf of the Conference …; provided that any Material Media Rights Agreement shall require the approval of two-thirds (2/3) of the Directors and all other Media Rights agreements shall be subject to approval by the Executive Committee.

2.10.5 Member Rights. Notwithstanding Section 2.10.3, but only to the extent permitted by the Conference’s Media Rights agreements, each Member shall retain such rights that are expressly retained by the Members under the Grant of Rights and any other rights that the Board may from time to time determine may be exploited by the Members.

2.10.6 Revenues from Non-Package Games. Unless otherwise determined by the Board, all revenues derived from the exploitation by any Member of its football games and basketball games that are not included in or selected for distribution as part of any Conference Media Rights agreement (“Non-Package Games”) shall be deposited with the Conference.

2.10.8 Rights Fee for Non-Package Games. The Board may establish a rights fee for the exploitation of any Non-Package Game.

2.10.9 Distribution of Revenues. The revenues derived under Section 2.10.2 (Revenues From Media Rights) and Section 2.10.6 (Revenues From Non-Package Games) resulting from the ACC-ESPN Multimedia Agreement and the ACC-ESPN Network Agreement shall be divided equally among the Members in accordance with Section 2.5.2, unless otherwise provided in these Bylaws (see Section 2.12 [re: Notre Dame]).

2.11.3.4 Dissolution Clause. Upon the dissolution of the Conference, the Board shall dispose of all the assets of the organization exclusively for the purpose of the organization in such manner, or to such organization or organizations organized and operated exclusively for charitable, educational, religious or scientific purposes as shall at the time qualify as an exempt organization or organizations under Section 501(c)(3) of the Internal Revenue Code of 1986 … , as the Board shall determine. Any of such assets not so disposed of shall be disposed of by the state court of jurisdiction in which the principal office of the organization is then located, exclusively for such purposes or to such organization or organizations as said court shall determine which are organized and operated exclusively for such purposes.

 

[CameronBornAndBred]

Yes, it seems there is - the ACC Constitution and Bylaws. Someone posted on a Ga. Tech or Va. Tech board a copy of the 2020-21 version: https://gtswarm.com/threads/acc-ad-meetings-new-revenue-distribution-model.26989/page-5

I don't know if there have been amendments since then, but I'll assume not to the provisions that would matter for these purposes. For reference/interpretation by others, I'll paste in below what appear to be the potentially relevant provisions related to television rights, distributions, rights of Members and withdrawing Members and what the necessary votes would be to amend relevant documents.

It seems clear to me that, under Section 1.4.5 of the Constitution and Sections 2.5.2 and 2.10.9 of the Bylaws, withdrawing members get nothing (other than I suppose the distribution they would be due for the year in which they withdraw) from the Media Rights or any other Conference distributions of revenues.

On the point noted above about how the amend the Grant of Rights, whether or not outside observers consider it "insane," the language in Para. 8 seems to me to clearly provide that it can only be amended by unanimity: "This Agreement may not be modified or amended other than by an agreement in writing signed by duly authorized representatives of the Conference each of the Member Institutions that are then members of the Conference." I don't think there's too much risk of courts not ruling that "each" means each and every/all.

Potential ways around this with votes more like 2/3 or 3/4 than unanimity, I suppose might be to try to amend the Constitution or the Bylaws to change the revenue distribution rules or to expel members or to amend the ESPN Agreement. But, even if any of those steps could get around the GOR, it would still require at least 10 of the current members or 12 after the new schools join in a few months. So, the 7 who were trying to do it last year wasn't enough.

The main ambiguity I see between the Constitution/Bylaws and GOR is whether a mere majority could vote to dissolve the league (which, arguably would be true per Section 1.6.2 of the Constitution since dissolution isn't one of the "absolute 2/3" or "absolute 3/4" matters). I do think dissolution of the league would get around the GOR, as the GOR only grants to the Conference the "rights necessary for [the ACC] to perform the contractual obligations of the Conference expressly set forth in the ESPN Agreement," and I recall seeing someone posted that the ESPN Agreement requires the ACC have at least 15 members (and, presumably, that it exists). So, dissolving the league would enable ESPN to void the Agreement and render the GOR irrelevant.

My guess is that this is what the group of 7 was looking to do last year -- to find an 8th vote to dissolve the ACC. That will of course be tougher to do once the league expands to 18, as they would need to find 10 votes to dissolve the ACC. I don't see that happening in the near-ish future unless there is some combination of pulling together a simultaneous decision--which would require collaboration between Fox and ESPN--to say, add Florida St., Ga. Tech, Stanford and Cal to the BIG, UNC, Virginia, Virginia Tech and Clemson to the SEC, and Miami and NC St. to the Big 12 (which might finally force Notre Dame's hand to also join the BIG). In particular, it seems extremely far-fetched that ESPN would have any interest in facilitating something like this happening any time soon, as it wouldn't really move the needle for the SEC (whose rights ESPN already has), ESPN has no interest in strengthening the BIG, and ESPN would be losing the large chunk of programming it currently gets from the ACC at very favorable (to ESPN) pricing, and it would flush any value for ESPN's ownership interest in the ACC Network (not much, but also not nothing).

I do expect something along these lines to eventually happen, as we get to within 3-5 years of the expiration of the GOR and the threat of this sort of mass exit becomes more plausible, because that will lower the parties' expectations for what should be paid as a settlement/buyout to make it happen -- e.g., Texas and Oklahoma (with the help of ESPN) buying out the last year of their Big 12 GOR for about $100 million. But, for right now, it's hard to see how it makes financial sense.




Constitution

1.4.5 Withdrawal of Members. To withdraw from the Conference, a Member must file an official notice of withdrawal with each of the Members and the Commissioner on or before August 15 for the withdrawal to be effective June 30 of the following year. Upon official notice of withdrawal, the Member will be subject to a withdrawal payment, as liquidated damages, in an amount equal to three times the total operating budget of the Conference [approved under Section 2.5.1 of the Bylaws], which is in effect as of the date of the official notice of withdrawal. The Conference may offset the amount of such payment against any distributions otherwise due such Member for any Conference year. Any remaining amount due shall be paid by the withdrawing Member within 30 days after the effective date of withdrawal. The withdrawing Member shall have no claim on the assets, accounts, or income of the Conference.


1.6.2 Required Vote. …. Except as otherwise provided herein or in the Bylaws, if a quorum is present when a vote of the Directors is taken, the affirmative vote of a majority of all Directors present for such vote shall be an act of the Board. …

The Absolute Two-Thirds Matters are as follows: (i) any amendment to Article 2.5 of the Bylaws (Finances), …, (iii) entering into or amending any Material Media Rights Agreement [defined as one providing over 5% of Conference revenue]…, … , and (v) the initiation of any material litigation involving the Conference (but not, for clarity, the settlement of any litigation involving the Conference, which requires the affirmative vote of a majority of all Directors present for such vote).

The Absolute Three-Fourths Matters are as follows: (i) the admission of new Members to the Conference pursuant to Section 1.4.3, (ii) the expulsion, suspension or probation of a Member pursuant to Section 1.4.4, (iii) any amendment of this Constitution, (iv) any amendment of the Bylaws (except amendments to Article 2.5), and (v) waiver of notice or other required process for a Board meeting …..

Bylaws

2.5.2 Distribution of General Revenue. The Conference shall distribute its net revenue, including but not limited to revenue from television receipts, Conference championships, participation in preseason or postseason competition, and interest from Conference funds on deposit, according to the provisions set forth in this Article 2.5. Before distributing any net revenue to the Members, the Conference shall deduct such reserves as may be determined by the Board from time to time in accordance with Section 2.5.3. Unless otherwise specified in these Bylaws (including in Section 2.12) [which deals with visiting team football ticket allotments] or any agreement to which the Conference is a party, after deducting such reserves, the remainder of the Conference net revenue shall be divided equally among the Members and distributed in one or more installments and in equal shares to each Member by June 1, or the first business day following June 1 or such other date as determined by the Board, in accordance with the distribution plan approved annually by the Board. …

2.10 Media Rights Policy

2.10.1 Grant of Rights. The Members have granted to the Conference the right to exploit certain media and related rights of the Members (such rights, the “Media Rights”; and the agreement pursuant to which the Members granted such rights, the “Grant of Rights”).

2.10.2 Revenues from Media Rights. Unless otherwise determined by the Board, all revenues from the sale, licensing, distribution and other exploitation of the Media Rights shall be deposited with the Conference. [Note: So, changing this would be subject to the 3/4 requirement to amend per Section 1.6.2 of the Constitution]

2.10.3 Conference Media Rights Agreements. The Commissioner shall negotiate all [Media Rights agreements] on behalf of the Conference …; provided that any Material Media Rights Agreement shall require the approval of two-thirds (2/3) of the Directors and all other Media Rights agreements shall be subject to approval by the Executive Committee.

2.10.5 Member Rights. Notwithstanding Section 2.10.3, but only to the extent permitted by the Conference’s Media Rights agreements, each Member shall retain such rights that are expressly retained by the Members under the Grant of Rights and any other rights that the Board may from time to time determine may be exploited by the Members.

2.10.6 Revenues from Non-Package Games. Unless otherwise determined by the Board, all revenues derived from the exploitation by any Member of its football games and basketball games that are not included in or selected for distribution as part of any Conference Media Rights agreement (“Non-Package Games”) shall be deposited with the Conference.

2.10.8 Rights Fee for Non-Package Games. The Board may establish a rights fee for the exploitation of any Non-Package Game.

2.10.9 Distribution of Revenues. The revenues derived under Section 2.10.2 (Revenues From Media Rights) and Section 2.10.6 (Revenues From Non-Package Games) resulting from the ACC-ESPN Multimedia Agreement and the ACC-ESPN Network Agreement shall be divided equally among the Members in accordance with Section 2.5.2, unless otherwise provided in these Bylaws (see Section 2.12 [re: Notre Dame]).

2.11.3.4 Dissolution Clause. Upon the dissolution of the Conference, the Board shall dispose of all the assets of the organization exclusively for the purpose of the organization in such manner, or to such organization or organizations organized and operated exclusively for charitable, educational, religious or scientific purposes as shall at the time qualify as an exempt organization or organizations under Section 501(c)(3) of the Internal Revenue Code of 1986 … , as the Board shall determine. Any of such assets not so disposed of shall be disposed of by the state court of jurisdiction in which the principal office of the organization is then located, exclusively for such purposes or to such organization or organizations as said court shall determine which are organized and operated exclusively for such purposes.

I don't know if there is a record of longest posts in DBR history, but this has to be like top 5. (And it's worthy)

 

[Nugget]

I don't know if there is a record of longest posts in DBR history, but this has to be like top 5. (And it's worthy)

Yep - brevity not my strength.

 

[camion]

Yep - brevity not my strength.

Brevity's posts sometimes approach that length.

Wait, I've never seen you and Brevity in the room at the same time.


Hmm.

 

[cato]

I assume that would be the ACC’s position. The GOR doesn’t address division of revenue. There’s likely a different agreement among the members that does.

The GOR is explicitly not the sole governing document. It is what it say it is — a grant of rights by the grantors to a grantee. It would be typical that other issues that are not expressly related to the the grant be addressed in separate documents. To analogize to a financing transaction, the security instruments, pursuant to which the borrower grants a security interest in collateral to the creditor, typically do not include various material terms that are agreed to between the creditor and debtor, including various remedies that the creditor may have that are unrelated to the collateral.

What’s my point? The fact that the GOR does not address a topic does not mean that the agreements between the parties as a whole are ambiguous. To determine whether there are ambiguities or inconsistencies, the GOR has to be analyzed along with the other relevant governing documents, which would include the ESPN agreement and the relevant conference governing documents apart from the GOR.

 

[johnb]

excellent legal process—DBR owes some serious billable hours.

Kinda like FSU owes the conference for end-of season offensive underperformance that screwed up our bowl money.

I wonder if there is some secret plan for what to do with these jumbo conferences, and how they think it’s profitable to dilute rivalries. Because it does seem odd financing that would lead any of our ACC schools to willingly enter conferences where they seem unlikely to succeed.

I guess we would join a Big 10, if the acc imploded and we were offered, but we don’t actually expect to win the conference. Just in the Sec, there I’ll soon be 4 or 6 teams that will be truly disappointed and surprised if they don’t win the conference at least half the time.

But I guess if the focus become the tournament, then I guess it matters less—as long as the teams squeeze into the top 4. Which certainly won’t be including Carolina or Miami and would generally not include FSU or Clemson.

If Duke did have similar NiL money, however, I’d be very optimistic that we could be consistently excellent/elite and gradually win over Durham, which would be fun for football and potentially transformative for our relationship with the region.

 

[JasonEvans]

But I guess if the focus become the tournament, then I guess it matters less—as long as the teams squeeze into the top 4.

It becomes top 12 next season, making it considerably easier to reach the playoff for ACC teams. I suspect that after some hysterics in Seminole country over them missing this year, the whole conference realignment stuff begins to calm down a little bit this summer as the path to the playoffs suddenly became easier for ACC and Big 12 teams versus running the gauntlet that is the SEC or Big Ten.

 

[CameronBornAndBred]

It becomes top 12 next season, making it considerably easier to reach the playoff for ACC teams. I suspect that after some hysterics in Seminole country over them missing this year, the whole conference realignment stuff begins to calm down a little bit this summer as the path to the playoffs suddenly became easier for ACC and Big 12 teams versus running the gauntlet that is the SEC or Big Ten.

Just like the NCAA tourney, there is going to be screaming. Going from 32 to 64 to 68 didn't stop the whining. Just counting down til the first SEC and B1G two loss teams get in over an ACC/Big 12 single game loser.

 

[cato]

It becomes top 12 next season, making it considerably easier to reach the playoff for ACC teams. I suspect that after some hysterics in Seminole country over them missing this year, the whole conference realignment stuff begins to calm down a little bit this summer as the path to the playoffs suddenly became easier for ACC and Big 12 teams versus running the gauntlet that is the SEC or Big Ten.

I also think this is most likely. It’s not like the various media companies have unlimited funds to throw at content. Do ESPN or Fox or anyone else really want to see what happens if the SEC and BIG suddenly add a new slate of teams, before the most recent round of expansion has even happened? Do the SEC and BIG?

The PAC was eviscerated and the ACC is in jeopardy because of bad media rights deals. Today the SEC and BIG have good media rights deals, but what will they be worth in 3, 5, 10 years?

There is so much in flux that I think the folks holding the cards are going to sit tight and see how the most recent moves play out before making any more big moves.

It’s not like FSU, Clemson, Carolina, UVA, etc are going to stop wanting a seat at the big boys’ table.

 

[HereBeforeCoachK]

Just like the NCAA tourney, there is going to be screaming. Going from 32 to 64 to 68 didn't stop the whining. Just counting down til the first SEC and B1G two loss teams get in over an ACC/Big 12 single game loser.

yeah, but, no one left out at 69 or 70 from the field of 68 has legit natty title aspirations.......this is a totally different thing........and FB is a much smaller universe of potential champions.