The key to the NU/CU penalty money..

[agcy68]

So, after watching the meltdown here yesterday during the Beebe presser and then listening to part of the Pollard / Geoffery press conference, I was confused about where the penalty money was going. Beebe commented that the leftover 5 agreed to forego their portion of the penalty and Pollard commented that it would put in a slush fund and divided up by the lawyers. I think the key to all of this is what was posted in the Des Moines Register:

"Missouri, Kansas, Kansas State, Baylor and Iowa State agreed, they said, to compensate Texas, Texas A&M and Oklahoma for any loss of revenue below what was offered by the Pac-10 Conference."


So, UT, aTm, and OU are guarenteed whatever the Pac-10 offered. My understanding is that if that is reached through normal revenue sharing then we use the normal revenue sharing calcs. If that comes up short, then they would take from the slush fund. As Jamie has said, there are too many variables to know the exact financial impact to the ISU athletic program. They did say, however, that the same revenue sharing formula would be used, just fewer teams to devide up the money.

Still a lot of questions though:
So, what was offered by the Pac-10? Was it 17 million per year?
When would the Pac-10 money kick in? 2012?
When will the new TV deals kick in? 2012?

In the very short term (the next year), I don't think that anything has changed.

 

[GoShow97]

So, after watching the meltdown here yesterday during the Beebe presser and then listening to part of the Pollard / Geoffery press conference, I was confused about where the penalty money was going. Beebe commented that the leftover 5 agreed to forego their portion of the penalty and Pollard commented that it would put in a slush fund and divided up by the lawyers. I think the key to all of this is what was posted in the Des Moines Register:

"Missouri, Kansas, Kansas State, Baylor and Iowa State agreed, they said, to compensate Texas, Texas A&M and Oklahoma for any loss of revenue below what was offered by the Pac-10 Conference."


So, UT, aTm, and OU are guarenteed whatever the Pac-10 offered. My understanding is that if that is reached through normal revenue sharing then we use the normal revenue sharing calcs. If that comes up short, then they would take from the slush fund. As Jamie has said, there are too many variables to know the exact financial impact to the ISU athletic program. They did say, however, that the same revenue sharing formula would be used, just fewer teams to devide up the money.

Still a lot of questions though:
So, what was offered by the Pac-10? Was it 17 million per year?
When would the Pac-10 money kick in? 2012?
When will the new TV deals kick in? 2012?

In the very short term (the next year), I don't think that anything has changed.

Both stated that they would let the lawyers handle this issue and then as a conference decide what to do it. It was cerntainly never positioned as a "slush fund".

In other words the "exit money" amounts are based on a complex formula that involves future potential earnings that both NE and CU may have earned in the future as per the Big 12 bylaws, and time of notification impactin a percentage number of these future potential revenues. So the task of figuring out the specific amount NE, CU owes would be left in the hands of the lawyers. You are correct on the second revenue sharing part.

The money used to offset and make TX,OU and TXAM whole towards what the PAC10 offered - if needed - would come from the extra money that the five universities will gain from the revenue sharing pie now being divided by 10 rather than 12. This is incremental money that all remaining 10 teams will get. These are the monies that the five agreed to use - if needed - to sweeten the pot for TX, OU and TXAM to stay in the BIG12.

 

[BenEClone]

NU's Perlman doesn't think they should pay a penalty. Their argument is taking shape - the bylaw articulates liquidated damages. Since, it seems, the conference faithful are going to get more after NU leaves, "they're better off than they were when we were in it." Perlman is a former law school dean - and ought to know that "liquidated damages" precludes arguing actual damages. Even so, its a bargaining position. CU, so far, seems willing to "man-up" and accept the penalty as written. The conference distribution of the proceeds, if any, seems still undecided. The offer from the five was a tender, which apparently, did not become a deal.
http://webcache.googleusercontent.c.../06/15/football/doc4c184b7bf0966858547991.txt

 

[Royalclone]

Both stated that they would let the lawyers handle this issue and then as a conference decide what to do it. It was cerntainly never positioned as a "slush fund".

So in other words, the big winners in all this will be the lawyers.

 

[Cydwinder]

I would be more than a little irritated to see NU try to get out of paying. This could get ugly.

 

[cyingreen]

So in other words, the big winners in all this will be the lawyers.

The more things change, the more they stay the same. :wink:

I never did count on the penalty money coming to the conference. But I will be very upset if penalties are paid and only the programs that were being courted by the Pac-10 get to share it. Sounds a little like a scam to me.:sad:

 

[jbhtexas]

NU's Perlman doesn't think they should pay a penalty. Their argument is taking shape - the bylaw articulates liquidated damages. Since, it seems, the conference faithful are going to get more after NU leaves, "they're better off than they were when we were in it." Perlman is a former law school dean - and ought to know that "liquidated damages" precludes arguing actual damages.

Yeah...My wife is a lawyer and I told here about Perlman's statement. She LOL'd

(I've always wanted to use LOL)...

 

[GoShow97]

So in other words, the big winners in all this will be the lawyers.

It's a cost of doing business. It's not like it frivolous. At the very least it puts NE and CU to the task of having to pay up while also making sure that ISU is a represented party through the conference. Lawyers aren't always a bad thing.

 

[GoShow97]

Yeah...My wife is a lawyer and I told here about Perlman's statement. She LOL'd

(I've always wanted to use LOL)...

Sounds like your wife is a good attorney. :wink:

 

[Stormin]

NU's Perlman doesn't think they should pay a penalty. Their argument is taking shape - the bylaw articulates liquidated damages. Since, it seems, the conference faithful are going to get more after NU leaves, "they're better off than they were when we were in it." Perlman is a former law school dean - and ought to know that "liquidated damages" precludes arguing actual damages. Even so, its a bargaining position. CU, so far, seems willing to "man-up" and accept the penalty as written. The conference distribution of the proceeds, if any, seems still undecided. The offer from the five was a tender, which apparently, did not become a deal.
Big 12 survivors plan to share NU cash

The bylaw also states since it is difficult to determine what liquidated damages and actual damages are that a specific amount and percentage of revenues shall be the "exit fee".

It is pretty straight forward. Nebraska signed it. I really don't see how they get out of it. It pretty much is the money that you would get from the league the last year or two that you were in conference. And maybe more. But rest assured that the league won't give Nebraska any TV money this next year.

 

[Clonehomer]

NU's Perlman doesn't think they should pay a penalty. Their argument is taking shape - the bylaw articulates liquidated damages. Since, it seems, the conference faithful are going to get more after NU leaves, "they're better off than they were when we were in it." Perlman is a former law school dean - and ought to know that "liquidated damages" precludes arguing actual damages. Even so, its a bargaining position. CU, so far, seems willing to "man-up" and accept the penalty as written. The conference distribution of the proceeds, if any, seems still undecided. The offer from the five was a tender, which apparently, did not become a deal.
Big 12 survivors plan to share NU cash

Wouldn't the loss of the championship game because they left be considered a loss to the confernce? Just because the money increased per team doesn't mean the conference isn't weaker.

 

[Stormin]

Wouldn't the loss of the championship game because they left be considered a loss to the confernce? Just because the money increased per team doesn't mean the conference isn't weaker.

Technically the money is staying the same despite that loss of two teams and the lack of a championship game.

BUT the agreement signed stipulates a specific amount if a team leaves the conference. Because the amount of damages can not be specifically determined. Nebraska signed it. I don't see how they can get around it. Because the loss of Nebraska has certainly hurt the conference. They had a terrible Men's BB team. That costs every Big 12 team two wins a year. Nebraska football on the ISU schedule meant more ticket sales because we packaged it with other games. Other schools did this as well. That is damage as well.

Nebraska is just being their usual whiney self.

 

[Wesley]

So, after watching the meltdown here yesterday during the Beebe presser and then listening to part of the Pollard / Geoffery press conference, I was confused about where the penalty money was going. Beebe commented that the leftover 5 agreed to forego their portion of the penalty and Pollard commented that it would put in a slush fund and divided up by the lawyers. I think the key to all of this is what was posted in the Des Moines Register:

"Missouri, Kansas, Kansas State, Baylor and Iowa State agreed, they said, to compensate Texas, Texas A&M and Oklahoma for any loss of revenue below what was offered by the Pac-10 Conference."


So, UT, aTm, and OU are guarenteed whatever the Pac-10 offered. My understanding is that if that is reached through normal revenue sharing then we use the normal revenue sharing calcs. If that comes up short, then they would take from the slush fund. As Jamie has said, there are too many variables to know the exact financial impact to the ISU athletic program. They did say, however, that the same revenue sharing formula would be used, just fewer teams to devide up the money.

Still a lot of questions though:
So, what was offered by the Pac-10? Was it 17 million per year?
When would the Pac-10 money kick in? 2012?
When will the new TV deals kick in? 2012?

In the very short term (the next year), I don't think that anything has changed.

PAC 10 money was not going to be upped until Pac 10 had a new TV contract with Fox in 2012, so the slush fund may build initially and then more quickly pay out until 2016 when Big 12 can get the new ESPN contract.

Does not the Fox portion run out in 2012 since we have two staggered contracts?

Wonder if Fox will try to lowball their Big 12 renewal now that they are in competition with ABC/ESPN.

 

[Wesley]

NU's Perlman doesn't think they should pay a penalty. Their argument is taking shape - the bylaw articulates liquidated damages. Since, it seems, the conference faithful are going to get more after NU leaves, "they're better off than they were when we were in it." Perlman is a former law school dean - and ought to know that "liquidated damages" precludes arguing actual damages. Even so, its a bargaining position. CU, so far, seems willing to "man-up" and accept the penalty as written. The conference distribution of the proceeds, if any, seems still undecided. The offer from the five was a tender, which apparently, did not become a deal.
Big 12 survivors plan to share NU cash

If Nebby and CU refuse to pay (they insist on receving TV money the next year or two and go to court) I could see the slush money having to backfill earlier and they may come out of ISU pockets next year. This could be a debby downer financially until the courts settle.

 

[Wesley]

Technically the money is staying the same despite that loss of two teams and the lack of a championship game.

BUT the agreement signed stipulates a specific amount if a team leaves the conference. Because the amount of damages can not be specifically determined. Nebraska signed it. I don't see how they can get around it. Because the loss of Nebraska has certainly hurt the conference. They had a terrible Men's BB team. That costs every Big 12 team two wins a year. Nebraska football on the ISU schedule meant more ticket sales because we packaged it with other games. Other schools did this as well. That is damage as well.

Nebraska is just being their usual whiney self.

Sounds like a court decision.Bring in the Texas lawyers vs CU/Nebby people.

 

[Cyforce]

Any chance we package the UNL game with KSt?
Sales would look great and help us renew the KC game.

 

[Wesley]

You must know PT Barnum. That would be a winner.

 

[isufbcurt]

I thought Beebe said that NU/CU wouldn't have to pay because the Big 12 would just not pay them their respective cuts to cover the fees?

 

[CyPride]

So, after watching the meltdown here yesterday during the Beebe presser and then listening to part of the Pollard / Geoffery press conference, I was confused about where the penalty money was going. Beebe commented that the leftover 5 agreed to forego their portion of the penalty and Pollard commented that it would put in a slush fund and divided up by the lawyers. I think the key to all of this is what was posted in the Des Moines Register:

"Missouri, Kansas, Kansas State, Baylor and Iowa State agreed, they said, to compensate Texas, Texas A&M and Oklahoma for any loss of revenue below what was offered by the Pac-10 Conference."


So, UT, aTm, and OU are guarenteed whatever the Pac-10 offered. My understanding is that if that is reached through normal revenue sharing then we use the normal revenue sharing calcs. If that comes up short, then they would take from the slush fund. As Jamie has said, there are too many variables to know the exact financial impact to the ISU athletic program. They did say, however, that the same revenue sharing formula would be used, just fewer teams to devide up the money.

Still a lot of questions though:
So, what was offered by the Pac-10? Was it 17 million per year?
When would the Pac-10 money kick in? 2012?
When will the new TV deals kick in? 2012?

In the very short term (the next year), I don't think that anything has changed.

we're not sniffing any 'buyout' money. 'bank' on that.

 

[Stormin]

we're not sniffing any 'buyout' money. 'bank' on that.

Yeah. The buyout money will probably go the next year to sweeten the deal for Texas, Oklahoma, A&M. But we will get an extra approximate $2 million because we now have 10 members instead of 12. Then the Fox deal gets renegotiated. Supposedly could be worth about $100 million more and that kicks in. With the way the formula works we will be looking at a lot more but Texas and Oklahoma even more. All told, Texas Oklahoma will probably end up with around $17 million to $20 million each year. ISU gets around $14 million. We get less. But it is at least $10 million more per year than we would have gotten with even going to the Big East. And Mountain West would have been even less.

There is no stability in the Big East either. So we got the best deal we could have gotten. Welcome to America. It is all about TV sets.