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Big XII Withdrawal Procedure
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CommuterBob Offline
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Post: #1
Big XII Withdrawal Procedure
http://www.big12sports.com/fls/10410/pdf...Bylaws.pdf

The Big XII bylaws are linked above. They have a new withdrawal procedure that is distinctly different from their old bylaws, mostly due to the incorporation of the GoR. Basically, it's like this:

Notice required: 18-months minimum
Exit fee (now called a "buyout"): 2x annual revenue distribution (not just TV money, all revenue), but really they forfeit their last year of revenue, and then pay an additional year's worth of revenue upon departure.

But there's a couple of extra wrinkles:

A member can be considered as having given notice of withdrawal by either:

A - actually giving notice; or
B - if a supermajority of the remaining membership (by vote) feels that a school has either:
-made statements that they intend to leave
-made attempts to breach the GoR or the bylaws
-been made an offer to join another conference and does not summarily reject that offer within 12 hours
-makes actions that are not in the conference's best interest

Then the GoR:

Quote:• if (A) by legal action or otherwise, a Withdrawing Member, or any other person or entity, attempts to challenge or oppose or interfere with, or challenges or opposes or interferes with,
(i) the payment of the Buyout Amount by the Withdrawing Member or the withholding of the Distribution Withholding by the Conference,
(ii) the enforcement by the Conference of its rights under the Grant of Rights Agreement or the performance by the Withdrawing Member of its obligations under the Grant of Rights Agreement,
or (iii) the right of the Conference’s telecast partners to televise games of the Withdrawing Member under the terms of the Grant of Rights Agreement during its then-remaining term;

or (B) for any other reason the Conference’s telecast partners are unable to produce and telecast games of the Withdrawing Member during the then-remaining term of the Grant of Rights Agreement or the Conference is unable to realize the revenues relating to those games from its telecast partners,
• then the Members agree that such actions, in breach of the Withdrawing Member’s agreements in these Bylaws, cause additional damage to the Conference and therefore that the Buyout Amount shall be increased by, and shall also include, and the Withdrawing Member shall be obligated to pay to the Conference immediately upon the occurrence of any of the foregoing events, the amount of all actual loss, damage, costs, or expenses whatsoever (including but not limited to lost revenues, damage to reputation and public image, and damage to relationships with related parties) incurred by the Conference or any of its remaining Members directly or indirectly related to that challenge or opposition, whether economic or otherwise.

Each of the Members agrees that Withdrawal of a Member contrary to its commitment to the Conference and the other Members pursuant to Section 3.1 above would cause damage and financial hardship to the Conference and the other Members without regard to the continued enforcement of the Grant of Rights Agreement, that the financial consequences to the Conference and its remaining Members cannot be measured or estimated with certainty at this time, and that the payment of the Buyout Amount is a reasonable method of compensating the Conference and the other Members for such damage and financial hardship and shall not be construed as a penalty.

In other words, a departing school that attempts to breach the GoR, breaches the GoR, or fails to pay the buyout, then the conference will sue the bejesus out of them.

Also, per the bylaws, a withdrawing member is not entitled to payments after withdrawal.

Quote:The Grant of Rights Agreement which will remain in full force and effect as to such Withdrawing Member and the Withdrawing Member shall continue to be fully bound under the Grant of Rights Agreement after Withdrawal for the remainder of the term of any Grant of Rights Agreement as if it remained a Member of the Conference, but the Withdrawing Member shall not be entitled to payment of any amounts or any other benefits arising under the Grant of Rights Agreement after Withdrawal.

Not that any of it wouldn't be challenged in court (and an interesting provision of the buyout is that it increases if it gets challenged), though, but it seems pretty solid to me.
09-18-2013 10:30 AM
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bluesox Offline
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Post: #2
RE: Big XII Withdrawal Procedure
Lots of lawyers. Who knows what the legal system would make of it. You could have nothing for the departing school or the school could use so much they might have to change their name to Big 12 university.
09-18-2013 10:35 AM
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bitcruncher Offline
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Post: #3
RE: Big XII Withdrawal Procedure
Basically, nobody is leaving for the length of the GoR. So you guys can quit speculating about the breakup of the Big XII for the next decade or so...
09-18-2013 11:34 AM
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CommuterBob Offline
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RE: Big XII Withdrawal Procedure
(09-18-2013 11:34 AM)bitcruncher Wrote:  Basically, nobody is leaving for the length of the GoR. So you guys can quit speculating about the breakup of the Big XII for the next decade or so...

My thoughts exactly.
09-18-2013 11:37 AM
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john01992 Offline
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Post: #5
RE: Big XII Withdrawal Procedure
i think it has more to do with the b12 being such an inferior conference that schools will be more willing to go through all that to get out
09-18-2013 11:50 AM
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CommuterBob Offline
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Post: #6
RE: Big XII Withdrawal Procedure
Other interesting provisions of the bylaws:

-the members agree to be members of the conference for 99 years
-they have adopted a system of "interested" and "disinterested" directors, which simply put if you or your institution has a personal stake in a particular issue, your vote doesn't count on that issue. Only "disinterested directors" have a vote.
-dissolution is by a supermajority (75%) of "disinterested directors" present or not
09-18-2013 11:53 AM
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bitcruncher Offline
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Post: #7
RE: Big XII Withdrawal Procedure
Which makes john's statement about the B12 irrelevant, as usual...
09-18-2013 12:06 PM
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1845 Bear Offline
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Post: #8
RE: Big XII Withdrawal Procedure
(09-18-2013 11:50 AM)john01992 Wrote:  i think it has more to do with the b12 being such an inferior conference that schools will be more willing to go through all that to get out

Says the fan of a league with their GOR modeled after ours who's league currently has a member willing to fight through an obscene buy out to get out.
(This post was last modified: 09-18-2013 12:11 PM by 1845 Bear.)
09-18-2013 12:07 PM
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john01992 Offline
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Post: #9
RE: Big XII Withdrawal Procedure
(09-18-2013 12:07 PM)S11 Wrote:  
(09-18-2013 11:50 AM)john01992 Wrote:  i think it has more to do with the b12 being such an inferior conference that schools will be more willing to go through all that to get out

Says the fan of a league with their GOR modeled after ours.

my league is the b10 bro
09-18-2013 12:10 PM
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1845 Bear Offline
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Post: #10
RE: Big XII Withdrawal Procedure
(09-18-2013 12:10 PM)john01992 Wrote:  
(09-18-2013 12:07 PM)S11 Wrote:  
(09-18-2013 11:50 AM)john01992 Wrote:  i think it has more to do with the b12 being such an inferior conference that schools will be more willing to go through all that to get out

Says the fan of a league with their GOR modeled after ours.

my league is the b10 bro

Keep trying to convince us of that Cuse fan.

Also the B1G has a tough GOR as well.
(This post was last modified: 09-18-2013 12:14 PM by 1845 Bear.)
09-18-2013 12:13 PM
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john01992 Offline
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Post: #11
RE: Big XII Withdrawal Procedure
(09-18-2013 12:13 PM)S11 Wrote:  
(09-18-2013 12:10 PM)john01992 Wrote:  
(09-18-2013 12:07 PM)S11 Wrote:  
(09-18-2013 11:50 AM)john01992 Wrote:  i think it has more to do with the b12 being such an inferior conference that schools will be more willing to go through all that to get out

Says the fan of a league with their GOR modeled after ours.

my league is the b10 bro

Keep trying to convince us of that Cuse fan.

Also the B1G has a tough GOR as well.

im a cuse fan.....which means ive had a hatred for the acc since the early 2000s.

the b10 has GOR cuz of a conf network. not cuz they all had to agree to it under the threat of a gun
09-18-2013 12:18 PM
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adcorbett Offline
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Post: #12
RE: Big XII Withdrawal Procedure
(09-18-2013 10:30 AM)CommuterBob Wrote:  Also, per the bylaws, a withdrawing member is not entitled to payments after withdrawal.

The other bylaws not withstanding, this one may be a bylaw, but doesn't mean it will hold up. It's like the an auto repair show that has a "not responsible for damages" and then is sued by a customer because they damaged the shoppe car. The sign will mean squat.

Now the buyouts attached to leaving, those can have teeth. But the day you try to retain someone's rights and not pay them, as has happened in 100% of the court cases, without fail, where someone has breached the equivalent of a grant of rights and were not paid for their retention, the retaining party will lose. Every single time, without discussion. Note there is a difference between not paying, and disagreements on the value or amount, if any, owed due to calculations of how much revenue said rights earned.
09-18-2013 12:38 PM
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CommuterBob Offline
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Post: #13
RE: Big XII Withdrawal Procedure
(09-18-2013 12:38 PM)adcorbett Wrote:  
(09-18-2013 10:30 AM)CommuterBob Wrote:  Also, per the bylaws, a withdrawing member is not entitled to payments after withdrawal.

The other bylaws not withstanding, this one may be a bylaw, but doesn't mean it will hold up. It's like the an auto repair show that has a "not responsible for damages" and then is sued by a customer because they damaged the shoppe car. The sign will mean squat.

Now the buyouts attached to leaving, those can have teeth. But the day you try to retain someone's rights and not pay them, as has happened in 100% of the court cases, without fail, where someone has breached the equivalent of a grant of rights and were not paid for their retention, the retaining party will lose. Every single time, without discussion. Note there is a difference between not paying, and disagreements on the value or amount, if any, owed due to calculations of how much revenue said rights earned.

I knew you were going to post that. Not saying you're wrong at all, but that's what they put to paper and each party agreed. I believe you had even asked the question in the thread about the GoR if withholding payment was in the bylaws - and yes, there it is.

But I think you're right in that it won't withstand the legal challenge, even though all the parties agreed to put it in writing - which is a little bit different than simply having the sign in the repair shop. It simply means that if a school leaves, they'll have to sue to get their rights back.
09-18-2013 12:51 PM
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The Cutter of Bish Offline
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Post: #14
RE: Big XII Withdrawal Procedure
The B1G's GoR is layered quite cleverly. It's not synced to a media deal, and BTN has its own share/buy-in thing.

GoR for them is more a symbolic gesture, but I'm sure trying to escape will cost you your shirt and first-born.
09-18-2013 12:53 PM
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gosports1 Offline
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Post: #15
RE: Big XII Withdrawal Procedure
Is this like the rhythm method.......
09-18-2013 12:54 PM
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adcorbett Offline
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Post: #16
RE: Big XII Withdrawal Procedure
(09-18-2013 12:51 PM)CommuterBob Wrote:  I believe you had even asked the question in the thread about the GoR if withholding payment was in the bylaws - and yes, there it is.

That wasn't me: I knew it was there. And as someone else pointed it, putting it in the bylaws is actually proof that a GOR does mandate future payments to retain rights. As I said before, people I know who are under such deals have flat out told me that if they left their record label, the BEST thing that could happen would be for them to retain their money, because it's like a Get out of Jail free card.
09-18-2013 01:19 PM
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lumberpack4 Offline
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Post: #17
RE: Big XII Withdrawal Procedure
(09-18-2013 11:34 AM)bitcruncher Wrote:  Basically, nobody is leaving for the length of the GoR. So you guys can quit speculating about the breakup of the Big XII for the next decade or so...

As I read it, anyone exiting early has to pay the equivalent of the TV revenue [b]the exiting school would have generated in the league in addition to the usual exit fees.

Only Texas could afford to do that and even then the cost is huge.

If the average payout is $20 million for TV, then the value of Texas in a $200 million a year deal is probably $70 million a year to the other schools. So leaving early probably costs a year's worth of revenue maybe $25 mil and then $70 mil for every year left early - for Texas. It's probably only $45 million for OU.

Texas can deal with the withholding of annual conference revenues and not really blink. However a $70 mill fine/fee per year left early might even cause Texas to say ouch.

Rough guess on the value to other schools:

Texas - $70 mill
OU - $45 mill
Kansas - $20 mill
OSU - $20 mill
West Va - $15 mill
TT - $10 mill
Kansas State - $10
Baylor $10 mill
TCU - $5 mill
Iowa State - $5 mill

To leave three years early would cost UT about $265 million, while for Iowa State or TCU to leave three year early would be about $40 million. That's how I interpret the new rules.

(This post was last modified: 09-18-2013 02:00 PM by lumberpack4.)
09-18-2013 01:58 PM
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adcorbett Offline
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Post: #18
RE: Big XII Withdrawal Procedure
lumberpack4 Wrote:As I read it, anyone exiting early has to pay the equivalent of the TV revenue the exiting school would have generated [size=large]in the league in addition to the usual exit fees.

Well it says "damages," which would seem to be any reduction in TV revenue. But in all likelihood, with the conference retaining all rights under the TV contract, there would be no reduction in TV revenue.
(This post was last modified: 09-18-2013 02:34 PM by adcorbett.)
09-18-2013 02:00 PM
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JRsec Offline
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Post: #19
RE: Big XII Withdrawal Procedure
I don't think the strength of the GOR, or the lack of it, or the legality of the new bylaws, are the germane issue. The issue has always been dissolution and it still takes 8 votes to obtain it. Now whether there are 8 teams in the Big 12 that the other four conferences find compelling enough to invite is the debatable question. It would take quite a concerted effort to pull off, but we are talking about 10 teams that are already inside the accepted P5 order. So anything remains possible whether it is probable or not.

I might add dissolution for the ACC can take place with 12 teams. While I'm not saying anything is happening to the ACC I'm merely pointing out that GOR's are moot if there are enough votes to dissolve. As long as relative payouts are remotely close I don't think any such moves are on the horizon. But if in 4 years the BTN is paying out 42 million per team and the SECN is paying out 35 - 37 and the ACC is earning 21 million and the Big 12 22 million then the disparity could come into play. And since the 25 combined members of those two conferences are virtually all acceptable P5 schools nothing can be ruled to be impossible. In fact, I would think given the hypothetical disparity it would be easier to place 12 ACC schools than 8 Big 12 schools. It's still going to be an interesting next 5 years no matter what.

I might add that even in the light of dissolution the GOR serves its purpose. Its purpose is to protect the investment and revenue streams of the member teams. It does that by holding them together, and in the event of dissolution it provides the motivation for all parties if possible to find reasonable new destinations. It may take 8 to dissolve the Big 12, but if it ever comes to that I look for all 10 to find homes. The same is true of the ACC. And in a worst case scenario if a couple of teams don't make it it still protected the vast majority.
(This post was last modified: 09-18-2013 02:53 PM by JRsec.)
09-18-2013 02:25 PM
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Wilkie01 Offline
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Post: #20
RE: Big XII Withdrawal Procedure
(09-18-2013 11:34 AM)bitcruncher Wrote:  Basically, nobody is leaving for the length of the GoR. So you guys can quit speculating about the breakup of the Big XII for the next decade or so...

Texas fans on Orange blood are talking about Texas leaving now. I know Texas leaving is the last thing a West Virginia fans wants to hear. However, Bit it is really being discussed by Texas movers and shakers. 04-cheers
09-18-2013 02:31 PM
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