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Exit fees have to be paid before a move?
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Dasville Offline
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Post: #1
Exit fees have to be paid before a move?
Just reading through some of the posts about Rutgers and found a comment that stated that all exit fees have to be paid to the departing conference before joining a new conference. Is that true? Seems like arrangements would at least have to be made wouldn't they? Is Conference revenue subject to garnishment from a team in a different Conference? How about the same Conference? Any information regarding payment plans by WVU since, as far as I know, that has been the largest exit fee paid by a team to a Conference?
(This post was last modified: 02-13-2014 02:22 PM by Dasville.)
02-13-2014 02:13 PM
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CardFan1 Offline
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RE: Exit fees have to be paid before a move?
I think the Big12 helped front WVU money. Not sure if TCU, BSU have paid yet but They never played a down.
02-13-2014 03:05 PM
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RE: Exit fees have to be paid before a move?
No. Conferences can't keep a school in. They don't have to pay a dime before leaving. Now the conference can sue. Usually the conference withholds money.

As for WVU-here's the agreement:
https://docs.google.com/file/d/1UvezYjyS...edit?pli=1
02-13-2014 03:18 PM
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Dasville Offline
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RE: Exit fees have to be paid before a move?
(02-13-2014 03:18 PM)bullet Wrote:  No. Conferences can't keep a school in. They don't have to pay a dime before leaving. Now the conference can sue. Usually the conference withholds money.

As for WVU-here's the agreement:
https://docs.google.com/file/d/1UvezYjyS...edit?pli=1

I wasn't thinking about how to keep a school locked in a conference. I am questioning the mergers and acquisition side of this. What liability would the Big Ten have in bringing Maryland into membership before the settling of the ACC exit situation? If total payment is made before membership is beside the point. What if terms of a settlement are not made before July 1, 2014? Does the Big Ten also acquire the debt/ potential fee?

Based on your link, WVU and the Big 12 wired full payment to the Big East on Feb 17, 2012 before they became a member July 1 2012.


How does this work in the business world regarding acquisitions?
02-13-2014 04:01 PM
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ken d Offline
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RE: Exit fees have to be paid before a move?
(02-13-2014 04:01 PM)Dasville Wrote:  
(02-13-2014 03:18 PM)bullet Wrote:  No. Conferences can't keep a school in. They don't have to pay a dime before leaving. Now the conference can sue. Usually the conference withholds money.

As for WVU-here's the agreement:
https://docs.google.com/file/d/1UvezYjyS...edit?pli=1

I wasn't thinking about how to keep a school locked in a conference. I am questioning the mergers and acquisition side of this. What liability would the Big Ten have in bringing Maryland into membership before the settling of the ACC exit situation? If total payment is made before membership is beside the point. What if terms of a settlement are not made before July 1, 2014? Does the Big Ten also acquire the debt/ potential fee?

Based on your link, WVU and the Big 12 wired full payment to the Big East on Feb 17, 2012 before they became a member July 1 2012.


How does this work in the business world regarding acquisitions?

I don't know that there's anything comparable in the business world. Maryland isn't an asset, previously "owned" by the ACC and now "owned" by the B1G. The B1G didn't purchase anything. They are not a party to any agreements between UM and the ACC.

It's more akin to a divorce and subsequent remarriage by one of the partners. Given its history, the ACC can hardly complain about "alienation of affection" now, can it?
02-13-2014 04:24 PM
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megadrone Offline
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RE: Exit fees have to be paid before a move?
(02-13-2014 02:13 PM)Dasville Wrote:  Just reading through some of the posts about Rutgers and found a comment that stated that all exit fees have to be paid to the departing conference before joining a new conference. Is that true? Seems like arrangements would at least have to be made wouldn't they? Is Conference revenue subject to garnishment from a team in a different Conference? How about the same Conference? Any information regarding payment plans by WVU since, as far as I know, that has been the largest exit fee paid by a team to a Conference?

The American's by-laws call for 1/2 of the money to be paid when you inform the conference in writing that you're leaving, and the other half paid when you exit. This, like almost anything else, is negotiable.

In Rutgers case, $5mm has already been paid, and the other $6.5mm will be paid over the next 4 years. Terms of the agreement.
(This post was last modified: 02-13-2014 04:26 PM by megadrone.)
02-13-2014 04:25 PM
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RE: Exit fees have to be paid before a move?
(02-13-2014 04:25 PM)megadrone Wrote:  
(02-13-2014 02:13 PM)Dasville Wrote:  Just reading through some of the posts about Rutgers and found a comment that stated that all exit fees have to be paid to the departing conference before joining a new conference. Is that true? Seems like arrangements would at least have to be made wouldn't they? Is Conference revenue subject to garnishment from a team in a different Conference? How about the same Conference? Any information regarding payment plans by WVU since, as far as I know, that has been the largest exit fee paid by a team to a Conference?

The American's by-laws call for 1/2 of the money to be paid when you inform the conference in writing that you're leaving, and the other half paid when you exit. This, like almost anything else, is negotiable.

In Rutgers case, $5mm has already been paid, and the other $6.5mm will be paid over the next 4 years. Terms of the agreement.
Pitt and SU had somewhat similar arrangements for their $7.5 million. Its between the school and their old conference. At this point, I'm not sure Maryland and the ACC settle before July 1, although I can't imagine it dragging out much beyond that.
02-13-2014 04:36 PM
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Dasville Offline
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RE: Exit fees have to be paid before a move?
So what I'm reading is that a settlement of some sort was made prior to every team actually moving from one conference to another. Why is that? Is some sort of agreement/settlement needed before a team can leave one conference and join another? I mean, why did WVU settle before moving into the Big 12? They had the goods on the Big East didn't they? They had subpoenas ready did they not?

What makes Maryland's case different?
02-13-2014 07:27 PM
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Big Frog II Offline
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RE: Exit fees have to be paid before a move?
TCU paid its $5 million before we left.
02-13-2014 07:57 PM
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megadrone Offline
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RE: Exit fees have to be paid before a move?
(02-13-2014 07:27 PM)Dasville Wrote:  So what I'm reading is that a settlement of some sort was made prior to every team actually moving from one conference to another. Why is that? Is some sort of agreement/settlement needed before a team can leave one conference and join another? I mean, why did WVU settle before moving into the Big 12? They had the goods on the Big East didn't they? They had subpoenas ready did they not?

What makes Maryland's case different?

When WVU left the Big East, the "regular" terms for leaving were 27 months notice and $5mm. Since WVU was looking to leave in 9 months they either had to (a) negotiate different terms or (b) sue to say that the by-laws didn't apply to them. They (along with Rutgers and Pitt) chose the latter, Syracuse and Louisville the former.

Settlement of the lawsuit (and counter suit for the Big East) resulted in WVU leaving in 9 months instead of 27 and paying a $21 mm exit fee instead of $5mm.

Maryland is also choosing the latter, saying the ACC's current terms don't apply to them (simplified version). So it has to be resolved in court.
02-13-2014 08:20 PM
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johnbragg Offline
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Post: #11
RE: Exit fees have to be paid before a move?
(02-13-2014 07:27 PM)Dasville Wrote:  So what I'm reading is that a settlement of some sort was made prior to every team actually moving from one conference to another. Why is that? Is some sort of agreement/settlement needed before a team can leave one conference and join another? I mean, why did WVU settle before moving into the Big 12?

With West Virginia, the issue wasn't the money. You can only be a member of one conference at a time, and the old Big East bylaws had a 27-month waiting period to leave. That's why West Virginia had to jailbreak the bylaws in court.

Quote:They had the goods on the Big East didn't they? They had subpoenas ready did they not?

Not really. There were two related issues.

1. Could/would a court enforce the 27-month waiting period in the bylaws by issuing an injunction against WVU leaving the Big East? (Spoiler: Nope. At which point conference bylaws became nearly worthless as a barrier to teams moving.)

Without an injunction holding WVU to the Big East bylaws, the game was over. The Big East could have scheduled West Virginia in league games, but WVU wouldn't have shown up because they'd be busy playing Big 12 teams.

2. If the bylaws are set aside, what damages did WVU leaving on 6-8 months notice cause the Big East? (Negotiated answer: about $20M.)

Syracuse and Pitt, and later Louisville and Rutgers, arranged to leave with about 1.5-2 years notice, which is adequate time to find a replacement, so they paid less.

If Louisville or Rutgers had left without an agreement,
02-15-2014 06:18 AM
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carolinaknights Offline
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Post: #12
RE: Exit fees have to be paid before a move?
(02-13-2014 04:25 PM)megadrone Wrote:  
(02-13-2014 02:13 PM)Dasville Wrote:  Just reading through some of the posts about Rutgers and found a comment that stated that all exit fees have to be paid to the departing conference before joining a new conference. Is that true? Seems like arrangements would at least have to be made wouldn't they? Is Conference revenue subject to garnishment from a team in a different Conference? How about the same Conference? Any information regarding payment plans by WVU since, as far as I know, that has been the largest exit fee paid by a team to a Conference?

The American's by-laws call for 1/2 of the money to be paid when you inform the conference in writing that you're leaving, and the other half paid when you exit. This, like almost anything else, is negotiable.

In Rutgers case, $5mm has already been paid, and the other $6.5mm will be paid over the next 4 years. Terms of the agreement.

Take the $1.8 million off the $6.5 million that the AAC with held from Rutgers' bowl money this year. $4.7 million over 4 years. A $1 million plus payment a year for 4 years while pulling down $10-20 million a year in the B-10 until it gets the full $20 + million full share, is peanuts for Rutgers after joining the B-10.
02-16-2014 10:47 AM
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CommuterBob Offline
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RE: Exit fees have to be paid before a move?
The technical way WVU, Pitt, Syracuse, Louisville, and now Rutgers have all left the Big East (or American) is by way of expulsion combined with a legal settlement, with each settlement containing different terms. Each was voted out of the conference in a manner consistent with the conference's bylaws. That way, technically, the bylaws are still intact and enforceable, despite the terms of exit and the payment schedule changing. Each school leaving agreed to the terms of the settlement prior to being voted out.
02-16-2014 11:42 PM
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