Basketball season is over. Pretty soon, all the speculation about which players will leave early, and which uncommitted recruits have decided to go where, will be history. It will be a few months before the trash talk about football will start in earnest. Some of us might want to talk about baseball and/or LAX, but that can fill but so much time.

So my mind is on other things right now. Specifically, the long term future of the ACC. We all know that the ACC has the strongest barriers to departure of any of the P5 conferences. I know that exit fees are in excess of $50 million, that all the members have signed over their media rights to the league, and the conference has a long term contract with ESPN. What isn't clear to me are the details behind those "facts".

I'm having a lot of trouble finding those details, and I was hoping some fans may already know the answers to some of my questions. These are some of those questions.

1. Is there any advance notice of intent to withdraw from the conference that is long enough to reduce or eliminate the humongous exit fees? Or is that an agreement in perpetuity?

2. In the unlikely event that the conference should break up before the end of the GoR, what happens to the contract with ESPN? Does it just go away, with no consequences? Or would ESPN be able to sue for damages? Would ESPN retain the rights to all the individual members, regardless of what conference they might wind up in, if the conference were to formally dissolve?

3. What would happen to the NCAAT credits the league has amassed? Do they disappear, or would they go with the schools that earned them to their new conferences?

Some of these questions aren't really ACC specific, but they are presumably part and parcel of the barriers/issues any individual school or groups of schools would have to deal with if realignment rears its ugly head once again.

Without speculating about the likelihood of any of these things happening, does anybody know the answer to any of these questions?

(04-10-2015 03:38 PM)ken d Wrote:  Basketball season is over. Pretty soon, all the speculation about which players will leave early, and which uncommitted recruits have decided to go where, will be history. It will be a few months before the trash talk about football will start in earnest. Some of us might want to talk about baseball and/or LAX, but that can fill but so much time.

So my mind is on other things right now. Specifically, the long term future of the ACC. We all know that the ACC has the strongest barriers to departure of any of the P5 conferences. I know that exit fees are in excess of $50 million, that all the members have signed over their media rights to the league, and the conference has a long term contract with ESPN. What isn't clear to me are the details behind those "facts".

I'm having a lot of trouble finding those details, and I was hoping some fans may already know the answers to some of my questions. These are some of those questions.

1. Is there any advance notice of intent to withdraw from the conference that is long enough to reduce or eliminate the humongous exit fees? Or is that an agreement in perpetuity?

2. In the unlikely event that the conference should break up before the end of the GoR, what happens to the contract with ESPN? Does it just go away, with no consequences? Or would ESPN be able to sue for damages? Would ESPN retain the rights to all the individual members, regardless of what conference they might wind up in, if the conference were to formally dissolve?

3. What would happen to the NCAAT credits the league has amassed? Do they disappear, or would they go with the schools that earned them to their new conferences?

Some of these questions aren't really ACC specific, but they are presumably part and parcel of the barriers/issues any individual school or groups of schools would have to deal with if realignment rears its ugly head once again.

Without speculating about the likelihood of any of these things happening, does anybody know the answer to any of these questions?

Number 3 is already decided by the NCAA. Credits stay with the conference you were in when you earned them and pay out over 6 years. A complete dissolution of the ACC is highly unlikely since that would require 12 votes. Something would be left, even if it's a rump conference. The ACC is chartered as a not-for-profit, private, association in the State of NC so the Conference Office is de-facto owner of the credits, not the individual schools.

If you read the league charter and bylaws, you will see that it doesn't give any guidance regarding a GOR exit fee - absent that you have to go to the contracts, which are kept secret in Jamestown. Theoretically the public schools should have a copy and regular people could get a copy via FOI but almost anything of substance is in the League office an not on the campuses.

That means everything falls back to North Carolina contract law and negotiations.

As to number one:


"Section IV-5. Withdrawal of Members.
To withdraw from the conference a member must file an official notice of withdrawal with each of the conference
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 one and one-quarter (1¼) times the total operating budget of the Conference (including any contingency
included therein), approved in accordance with Section V-1 of the Conference 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. (Revised: September 2011)"

The only amendment to this raised the formula to 3X - it changed none of the other language. Just the exit fee is 3X annual total per school distributions, meaning that by the June 30 of 2016 the exit fee alone will be close to or more than $80 million per school. If you do not provide notice, you are in immediate breach of contract and the league begins holding money, nothing stops the Conference from wringing 3X out of you other than a 12/15 vote to let you off the hook. It takes a 3/4 vote to amend the Charter, so it takes a 3/4 vote to authorize any settlement that violates the Charter.

As for #1 and #2.

There is really no way to withdraw in a manner to save a massive buyout. What they did to Maryland is now is probably now codified. From the moment you announce, all monies from the conference are withheld. If you give two years notice, they withhold those two years of revenue. If you announce the day before you leave, they sue you for the full amount. Might be able to chip away in court, but vs. Maryland (who had as strong a case as anyone would ever have) the ACC proved they would go to the mattresses about it. It's going to be a $50M+ hit in any event at this point, and that would only be by lawsuit, so add the legal costs.

If the conference 100% broke up, ESPN wouldn't retain the rights to anything I don't believe, unless there is something I don't know about in the contracts. The schools granted their rights to the conference, not to ESPN. But the problem is dissolving the entire conference would be extremely unlikely, because of the 12 votes mentioned. The only possible way for that to happen would probably be for the SEC to change course and go after FSU, Miami, Clemson, GT. That's an offer that would be seriously considered by those schools, at which point you could theoretically see NC State and VT hoping on board, and B1G would have to pick up UNC, UVA, Duke, Syracuse, Pitt and BC. That's the only conceivable way I could see getting to 12, and it would require the SEC to do a 180 degree turn in their realignment strategy, and the B1G to make some exceptions as well.

You MIGHT be able to blow the conference up by taking 10 or 11 teams...at some point, despite the voting bylaws, you do so much damage that nobody, networks included, are interested in saving it, and even a stable home in the AAC starts to look better than backfilling with Sunbelt teams.

Short of that, if somehow say two schools left for the B1G, even if they were UNC and UVA let's say...the remaining schools would most likely stay together at 12 (assuming the SEC is not inviting FSU/Clemson) and ESPN would likely (but not necessarily - depends how bad ESPN would want to save the ACC) reduce their per school payment as per a composition clause. Then the ACC would also still hold UVA and UNC's rights, which they could either still sell to ESPN, or more likely, the ACC/ESPN would negotiate to have them bought out for serious cash by the B1G.

(04-10-2015 04:48 PM)Lou_C Wrote:  As for #1 and #2.

There is really no way to withdraw in a manner to save a massive buyout. What they did to Maryland is now is probably now codified. From the moment you announce, all monies from the conference are withheld. If you give two years notice, they withhold those two years of revenue. If you announce the day before you leave, they sue you for the full amount. Might be able to chip away in court, but vs. Maryland (who had as strong a case as anyone would ever have) the ACC proved they would go to the mattresses about it. It's going to be a $50M+ hit in any event at this point, and that would only be by lawsuit, so add the legal costs.

If the conference 100% broke up, ESPN wouldn't retain the rights to anything I don't believe, unless there is something I don't know about in the contracts. The schools granted their rights to the conference, not to ESPN. But the problem is dissolving the entire conference would be extremely unlikely, because of the 12 votes mentioned. The only possible way for that to happen would probably be for the SEC to change course and go after FSU, Miami, Clemson, GT. That's an offer that would be seriously considered by those schools, at which point you could theoretically see NC State and VT hoping on board, and B1G would have to pick up UNC, UVA, Duke, Syracuse, Pitt and BC. That's the only conceivable way I could see getting to 12, and it would require the SEC to do a 180 degree turn in their realignment strategy, and the B1G to make some exceptions as well.

You MIGHT be able to blow the conference up by taking 10 or 11 teams...at some point, despite the voting bylaws, you do so much damage that nobody, networks included, are interested in saving it, and even a stable home in the AAC starts to look better than backfilling with Sunbelt teams.

Short of that, if somehow say two schools left for the B1G, even if they were UNC and UVA let's say...the remaining schools would most likely stay together at 12 (assuming the SEC is not inviting FSU/Clemson) and ESPN would likely (but not necessarily - depends how bad ESPN would want to save the ACC) reduce their per school payment as per a composition clause. Then the ACC would also still hold UVA and UNC's rights, which they could either still sell to ESPN, or more likely, the ACC/ESPN would negotiate to have them bought out for serious cash by the B1G.

So, basically, there is no reason for any school to give advance notice of their intent to leave. Whether you give 20 years notice, or 20 minutes, the result is the same - except that the less notice you give the more leverage you retain.

I agree that the Maryland case made it unlikely anybody going forward has a legal challenge to the full $50 million + exit fee. Everybody still in the conference either agreed to the provision explicitly, or in FSU's case tacitly by not leaving in a timely manner like Maryland did.

What I don't see is any penalty for a school to announce that it does not intend to agree to a renewal of the GoR when it expires. That is not equivalent to announcing an intent to leave the conference, despite the logical inference that is your ultimate intent.

As for NCAAT credits, I suspect that a vote of 12 of the 15 members to dissolve the conference would mean there is no "rump conference" to inherit this money. That would be different than, say, if some number fewer than 12 were to leave such that there weren't enough remaining members to qualify as a conference unless they quickly back filled, a la the Big East.

One of the things I could imagine is that if, for example, the four southern ACC schools were all to announce they wouldn't renew the GoR, that would be destabilizing. As I said, I think they could do this without penalty. Some of the remaining members would likely seek a safe haven elsewhere, since their next ESPN renewal would be at a deep discount from the current per school payout.

Clearly, some of those members would have more options than others. And if the total number of schools assured of a soft landing has now reached a majority of the members, there could be wheeling and dealing to bring the total number of defectors to the magic (for dissolution) number of 12, thus saving all of them more than $600 million (12 X $50 Million) in exit fees. If dissolution also allowed the departing schools to retain their NCAAT credits, that's more incentive to bring a lot of parties to the negotiating table.

I guess the point of all this is that the Big 12 isn't the only P5 conference that isn't yet assured of long term survival. Which IMO gives football schools like Clemson and FSU considerable leverage in any future expansion decisions the ACC might consider.

Another question that occurs to me is that the kind of circumstances that would either encourage or facilitate dissolution would require the sort of cooperation among several conferences and networks that some might describe, not as "cooperation" but "collusion". This is just as true of parceling out current Big 12 members among the remaining P4 as it would be of breaking up the ACC. Almost surely there would be legal challenges, not just by any current P5 school that might be left behind, but by G5 schools and conferences as well. That would argue for involving the fewest "conspirators" as possible to get the job done.

All of this reinforces my belief that the forces working against further realignment are still more powerful than forces working for it.