Perlmans take on penalty

[MrReality]

Full disclosure, I copied this from a Husker message board. It was a post someone made summarize a radio interview Harvey Perlman was on this morning. Harvey was a law professor and then Dean of the Nebraska Law School before becoming Chancellor. So, he's not just blowing smoke, he's actually a pretty smart guy. It will be interesting to see how this all plays out.

This morning on KLIN. He said there technically aren't any "exit penalties", but there are provisions for paying liquidated damages to remaining schools who might suffer as a result of the exit. Since the Big 12 apparently now is much better off financially AFTER Nebraska left, there really are no liquidated damages for the remaining schools. Therefore his view is Nebraska should not have to pay for any liquidated damages since they don't exist.

Asked whether a final settlement would wind up in court, Perlman just said he hopes not but we'll have to see how it works out.

 

[bos]

Them leaving the conference has caused me emotional damage. I demand reparations.

 

[ISUboi12]

I thought I read somewhere that losing Colorado and Nebraska hurt the viability of a TV network somewhere in the range of 8% less than it would be if those schools had stuck around. I think that is damage. Not a lot, but still damage.

Edit: LOL at "he's actually a pretty smart guy" when describing the chancellor of your university... Nebraskans....

 

[joefrog]

You can always get a lawyer to take one side or the other of an issue. The conference contract mentions nothing about damages or the state of the conference after you leave it.

It does however mention specific penalties for leaving early. Nebraska can try and cry their way out of paying what they owe, but they are going to pay. Treason has a price.

I guarantee had ISU gone to the Big10 we would have had to pay. And we would have been glad to.

 

[cyclone13]

It'll end up in the court.

 

[MrReality]

It'll end up in the court.

Agree. My guess is they will reach some type of settlement. My best friend works for the law firm in Lincoln that represents the Univeristy, I will try to get some scoop from him down the road.

 

[Clonefan32]

Them leaving the conference has caused me emotional damage. I demand reparations.

It has also caused me physical damages as re-alignment has caused me to do nothing but sit in front of a computer eating Doritos... I too demand to be compensated for my loss.

 

[Bestaluckcy]

In some disputes possession is 9/10ths of the law. If the Big 12 is smart we do not give Nebraska it's due. Let them come and prove they should get it from us.

 

[Stormin]

Full disclosure, I copied this from a Husker message board. It was a post someone made summarize a radio interview Harvey Perlman was on this morning. Harvey was a law professor and then Dean of the Nebraska Law School before becoming Chancellor. So, he's not just blowing smoke, he's actually a pretty smart guy. It will be interesting to see how this all plays out.

This morning on KLIN. He said there technically aren't any "exit penalties", but there are provisions for paying liquidated damages to remaining schools who might suffer as a result of the exit. Since the Big 12 apparently now is much better off financially AFTER Nebraska left, there really are no liquidated damages for the remaining schools. Therefore his view is Nebraska should not have to pay for any liquidated damages since they don't exist.

Asked whether a final settlement would wind up in court, Perlman just said he hopes not but we'll have to see how it works out.

Here is how I think it would work.

Nebraska and Colorado are NO LONGER members of the Big XII Conference. Even though they play in the Big XII Conference in football and basketball in the coming year.

So for all conference revenue received this year, Nebraska and Colorado will NOT receive a share of money. No conference TV appearance money, no TV contract money, no NCAA money, no BCS money, etc. NOTHING that goes through the Big XII Conference. THAT is the penalty.

Obviously there is some sort of exit penalty. And Nebraska knows it. They are just blowing smoke and trying to negotiate downward the payment.

We won't have a championship game when they leave so that is upwards of $10 million to $20 million right there of actual damages. Plus the loss of revenues and future revenues of guaranteed sellouts for when Nebraska comes to town. The No liquidated damages claim is bogus. They damaged us. We appear to be a damaged conference and unstable. He should be happy with $10 million. That is cheap.

 

[CycloneChris]

Why would anyone trust what he has to say?

 

[Palmer]

just pay up doosh

 

[SNEDDS3]

Wouldnt the re-scheduling in the years to come be of some damage? I have no idea, just a thought.

 

[vmbplayer]

If we now have to play 9 conference games and have to buy out the 4th non-conference game we have scheduled for each year it does cause us financial harm. It also hurts our chances at making a bowl game which hurts our financial and raises our travel expenses. They bylaws talk about hurting the remaining member institutions, not the conference as a whole.

I can see why he would make that argument because it's the best one NE can make to avoid paying. However, there is no way he is going to do anything other than make some argument to support NE's interest.

At his press conference he stated 'given the circumstances' I don't believe we will owe the Big 12 anything. That was before we even knew that the TV deal would pay everyone else more.

This is all just posturing out of him. At least we get a look at what the NE/CU argument will be.

No one will know for sure what is owed until it's through the legal process, but the case he is making is no stronger than Beebe saying they do.

 

[jbhtexas]

Here's section 3.2 from the Big 12 Handbook:

http://www.cyclonefanatic.com/forum/showthread.php?p=1769784&posted=1#post1769784

Effect of Giving Notice. If a Member Institution gives proper Notice pursuant to Section 3.1 (a “Withdrawing Member”), then the Members agree that such withdrawal would cause financial hardship to the remaining Member Institutions of the Conference, and that the financial consequences cannot be measured or estimated with certainty at this time. Therefore, in recognition of the obligations and responsibilities of each Member Institution to all other Member Institutions of the Conference, each Member Institution agrees that the amount of revenue that would have been otherwise distributable to a Withdrawing Member 14 pursuant to Section 2 herein for the final two (2) years of the Current Term or the thencurrent Additional Term, as the case may be, shall be reduced by fifty percent (50%), with the remainder to be distributed to the other Member Institutions who are not Withdrawing Members or Breaching Members (as defined below) as additional Conference revenues in accordance with Section 2 herein. The Member Institutions agree that such reduction in the amount of revenues distributed to a Withdrawing Member is reasonable and shall be in the form of liquidated damages and not be construed as a penalty.

You see Harvey, it really doesn't matter if the conference suffers hardship or not when a team withdraws. You agreed that it did by signing your Big 12 contract the last time the term was renewed, and you weren't forced to sign that contract. You agreed that withdrawing causes hardship, and you agreed that this hardship can't be measured, and you agreed that the revenue of a school that withdraws will be reduced as specified as consideration for withdrawl because nobody knows what the hardship really is.

Sorry Harvey...you agreed that a team withdrawing does cause hardship.

 

[MrReality]

Here is how I think it would work.

Nebraska and Colorado are NO LONGER members of the Big XII Conference. Even though they play in the Big XII Conference in football and basketball in the coming year.

They are still a part of the Big 12 conference until July of 2011.

 

[moater]

Using 8% as the minimum potential loss in revenue that leaves 15.3 million in potential lost revenue per year for both school (For new TV Deal). Either way the Big 12 will probably make Nebraska take them to court for any distribution of funds since they are leaving after one year. Colorado would only recieve 50% of its Big 12 Revenue over the next two years.

 

[vmbplayer]

They are still a part of the Big 12 conference until July of 2011.

Doesn't matter, the By-laws indicate you don't distribute any conference funds to the breaching member anyway. It is pretty spelled out for how the withdrawing member owing the rest of the conference is handled.

The Big 12 will simply hold onto all the funds NE would usually make from the conference. then NE will have to challenge and prove in court that they are owed anything.

 

[vmbplayer]

Using 8% as the minimum potential loss in revenue that leaves 15.3 million in potential lost revenue per year for both school. Either way the Big 12 will probably make Nebraska take them to court for any distribution of funds since they are leaving after one year. Colorado would only recieve 50% of its Big 12 Revenue over the next two years.

The minimum potential loss doesn't matter. The By-laws flat out say since you can't estimate what the loss will be we will use these percentages.

CU will only make 20% for the next two years. They are a breaching member also.