Realignment Megathread (All The Moves)

2speedy1

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I guess that depends on what "home lined up," means. Does that mean written offer and acceptance to join a conference? Or would that mean behind the scenes talks have happened?

From what we have seen, a school has to request in writing to join a conference, and then the conference formally accepts in writing.
"Intention to leave" just like OuT they had to announce their "intention to leave" Its not necessary they have a landing spot, just that they intend to leave. Having a deal to go somewhere or a plan to leave, are both reason to require informing the conference, both would remove their vote.
 

exCyDing

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I guess that depends on what "home lined up," means. Does that mean written offer and acceptance to join a conference? Or would that mean behind the scenes talks have happened?

From what we have seen, a school has to request in writing to join a conference, and then the conference formally accepts in writing.
First, a school's administration isn't going to green light a vote to dissolve without having something firm lined up. Too many people have to give it the go ahead, and institutions don't leap blindly with that big of a decision. A few schools are pretty much guaranteed a spot in the B10 or SEC, but getting to 8 is borderline.

Second, having a backroom agreement is a conflict of interest. Failing to disclose that conflict of interest invalidates the vote, and sets up the left-behind schools for a massive lawsuit that's a slam dunk. A deal like this would include at least 8 schools, 2 networks and 3 conferences (and their 44 member schools). That means a lot of people would be involved in even an informal deal. What are the chances they can keep it all under wraps and have nothing in writing?
 

isucy86

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Oh you absolutely take Nebraska if you're in a position to get to be picky.

The Pac12, however, isn't going to be in a position to be picky and whatever is left of the Pac12 plus what they take from the MWC is still a better deal for an SMU or Tulane than staying in the AAC is going to be.

It depends on how many schools leave the Pac10. If OU/WA and CU/UA leave the Pac12 then valuation could be tricky. And more importantly an eager media partner would have to be found. If the money difference is something like $5M does it make sense to leave the MWC and AAC respectively. We keep hearing about travel costs.

Also, at some point the Big10, SEC and ACC are going to put an end to Big12 and Pac12 adding G5 schools. Up to this point each P5 conference received an equal aggregate payment, last year it was around $80M. Obviously, that was a better deal for the ten Big12 teams than the fourteen Big10 or SEC teams. With the 2 year CFP expansion & extension with ESPN, the CFP money will be divided equally per school in each P5 conference.

Over the past decade there have been 64 P5 schools plus ND. With recent realignment there are 68 P5 schools plus ND plus any more G5 programs the Pac12 (or Big12) adds. So by promoting 6 teams from G5 to P5 that is a 9.23% reduction in each P5 schools CFP payout rate. Although, dollars will go up significantly.

The other wildcard, is the payout rate and structure haven't been agreed upon for the 2026 season when the CFP goes out to open bids. Do the Big10 and SEC make a power play and have part of the playoff monies distributed to conferences based on # of teams a conference gets in the 12 team playoff. This would be similar to the units concept used in men's basketball.
 

isucy86

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First, a school's administration isn't going to green light a vote to dissolve without having something firm lined up. Too many people have to give it the go ahead, and institutions don't leap blindly with that big of a decision. A few schools are pretty much guaranteed a spot in the B10 or SEC, but getting to 8 is borderline.

Second, having a backroom agreement is a conflict of interest. Failing to disclose that conflict of interest invalidates the vote, and sets up the left-behind schools for a massive lawsuit that's a slam dunk. A deal like this would include at least 8 schools, 2 networks and 3 conferences (and their 44 member schools). That means a lot of people would be involved in even an informal deal. What are the chances they can keep it all under wraps and have nothing in writing?

But we all know how entities can get around things like this. Speak in hypothetical scenarios, use go betweens, hire consultants "to do a study", etc. So no invite or backroom agreement, but schools know where they stand.

Plus if Big12 money is equal to or better than ACC money, then there is not a downside for schools that don't get Big10/SEC invites and are destined for Big12.
 

isucy86

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No. Someone posted in another forum 3/4 is needed, thus 11 teams. They won't get 11 teams willing to disband.

Greg Flugaar mentioned a path that could interest some schools that don't get Big10/SEC invites.

The ACC exit fee is $120M plus GOR monies. So if 7 teams want to leave for greener pastures, they owe a minimum of $120M each, so each of the 7 left-behinds gets $120M plus any negotiation of the GOR. So the key becomes schools the Big12 would have interest. If they can earn more in media rights from Big12 vs. ACC through 2036- the money would make sense to disband the ACC.

But even if ACC schools can orchestrate the ACC's demise, ESPN has to feel they haven't been financially damaged and be willing to increase their SEC and Big12 media deals.
 

Cloneon

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Greg Flugaar mentioned a path that could interest some schools that don't get Big10/SEC invites.

The ACC exit fee is $120M plus GOR monies. So if 7 teams want to leave for greener pastures, they owe a minimum of $120M each, so each of the 7 left-behinds gets $120M plus any negotiation of the GOR. So the key becomes schools the Big12 would have interest. If they can earn more in media rights from Big12 vs. ACC through 2036- the money would make sense to disband the ACC.

But even if ACC schools can orchestrate the ACC's demise, ESPN has to feel they haven't been financially damaged and be willing to increase their SEC and Big12 media deals.
Curious. I can't see ESPN financing this bailout, so where does the $120M/team come from? Or what scenario are you seeing that I'm not where ESPN benefits?
 
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clone52

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I know there is really no way out of the GOR. But this is not a tenable situation for 12 more years. You can’t have 7 schools (half the conference) basically go on strike. I think they’re going to have to agree to unequal revenue sharing just to get cooperation.



I wonder if it could be renegotiated. Basically, could the schools that want to leave offer to pay the remain schools the value that their remaining ACC contract would have? Like if each school currently expects to get $20M a year, if a team leaves, could they pay the ACC $20M a year for the remaining term of the grant of rights? If that team got $60M a year from the SEC or Big 10, $20M would go to ACC.

The schools wouldn't break the GOR might agree to a deal like this. If I'm Pitt (for example), might I realize that the ACC will break up in 2036. I might agree to break the GOR if I could be assured of being at least as well off financially as if they stayed.
 

exCyDing

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But we all know how entities can get around things like this. Speak in hypothetical scenarios, use go betweens, hire consultants "to do a study", etc. So no invite or backroom agreement, but schools know where they stand.

Plus if Big12 money is equal to or better than ACC money, then there is not a downside for schools that don't get Big10/SEC invites and are destined for Big12.
The PAC likely had just those kinds of discussions that lead them to believe they were still worth more than the B12 for their contract negotiations. How's that going for them?

This isn't a rinky dink deal that gets done between the president of a school and the head of the network on a handshake that no one's going to look too closely into. No one person is able to speak for any one side.

You've got all sorts of people working on this. Analysts, consultants, marketing, legal, etc etc etc. You've got those people for the networks. And each of the conferences. And all the ACC schools that want to leave. And the B10 Schools. And the SEC schools. And the B12 schools. That's hundreds of not thousands of people working on this deal. There's no way that it doesn't come out through leaks or FOIA requests (lots of state schools involved, after all). These people aren't going to purger themselves in a civil trial. While they can refuse to answer a question, unlike pleading the 5th in a criminal matter, juries in a civil matter can read into a non-answer in finding their verdict.

Without some kind of an assurance, schools aren't going to greenlight jumping out of a, at worst, P4 conference for the unknown. The firmer the assurance, the more likely it is to be a conflict of interest. A hunch and a notion isn't going to cut it for an institutional decision.

As much as some of the ACC schools have to lose by being stuck in the ACC, the ACC schools that get left behind have just as much to lose by the ACC dissolving. There's no way they don't file suit immediately. Losing that suit would be catastrophic beyond being stuck in the ACC for another 30 years.
 
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isucy86

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Curious. I can't see ESPN financing this bailout, so where does the $120M/team come from? Or what scenario are you seeing that I'm not where ESPN benefits?

The $120M is the ACC exit fee. Similar to the exit fee that OU & UT agreed to pay Big12. A big difference is the Big12 exit fee paid by 2 teams is split among the 8 remaining teams. With the ACC, potentially, 7 teams will pay $120M apiece that is split among the 7 remaining teams.

ESPN benefits if they can make substantially more in SEC ad rates vs. what they charge for ACC ad rates. But one would think that is the case since ESPN is paying around $65M per SEC school and $17M per ACC school. ESPN currently has exclusivity with both the SEC & ACC.

In the case of ACC vs. Big12 ad rates, I would guess they are fairly close- so ESPN would be indifferent.
 

FriendlySpartan

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The $120M is the ACC exit fee. Similar to the exit fee that OU & UT agreed to pay Big12. A big difference is the Big12 exit fee paid by 2 teams is split among the 8 remaining teams. With the ACC, potentially, 7 teams will pay $120M apiece that is split among the 7 remaining teams.

ESPN benefits if they can make substantially more in SEC ad rates vs. what they charge for ACC ad rates. But one would think that is the case since ESPN is paying around $65M per SEC school and $17M per ACC school. ESPN currently has exclusivity with both the SEC & ACC.

In the case of ACC vs. Big12 ad rates, I would guess they are fairly close- so ESPN would be indifferent.
You’re still not answering where the billion dollars (at a min) is coming from just for the exit fee. The schools are already talking about not making enough and you expect them to pony that up? Also those 7 schools 100% do not all have landing spots in the P2 and if they do no guarantee those schools will get a full share.

The logic that espn would pony up money in the middle of massive cost cuts to have the media rights to fewer schools continues to be one of the more absurd things that gets posted on here.
 

Cloneon

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The $120M is the ACC exit fee. Similar to the exit fee that OU & UT agreed to pay Big12. A big difference is the Big12 exit fee paid by 2 teams is split among the 8 remaining teams. With the ACC, potentially, 7 teams will pay $120M apiece that is split among the 7 remaining teams.

ESPN benefits if they can make substantially more in SEC ad rates vs. what they charge for ACC ad rates. But one would think that is the case since ESPN is paying around $65M per SEC school and $17M per ACC school. ESPN currently has exclusivity with both the SEC & ACC.

In the case of ACC vs. Big12 ad rates, I would guess they are fairly close- so ESPN would be indifferent.
Thanks. It'll be interesting to see ad rate value in a recession. Not to mention there are signs of belt tightening by Disney and Fox. So, I'm guessing the negotiable parameters are decreasing and, thus reducing the probability of allowing any ACC outs. But, that's just my opinion. What's really telling is how the Pac12's situation turns out.
 

1UNI2ISU

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You’re still not answering where the billion dollars (at a min) is coming from just for the exit fee. The schools are already talking about not making enough and you expect them to pony that up? Also those 7 schools 100% do not all have landing spots in the P2 and if they do no guarantee those schools will get a full share.

The logic that espn would pony up money in the middle of massive cost cuts to have the media rights to fewer schools continues to be one of the more absurd things that gets posted on here.
And yet ESPN just shelled out $10M per for Pat McAfee plus whatever they're going to pay his crew and picked up 100% of his production costs including, apparently, reimbursing him for the purchase and renovations of his new building/studio while giving him the go ahead to use everything but the f-word for 3 hours everyday on the main channel. I like McAfee a lot but that still seems like a stretch,

Feels like ESPN is 'selectively' cost cutting and targeting long tenured (expensive) employees.
 
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FriendlySpartan

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And yet ESPN just shelled out $10M per for Pat McAfee plus whatever they're going to pay his crew and picked up 100% of his production costs including, apparently, reimbursing him for the purchase and renovations of his new building/studio while giving him the go ahead to use everything but the f-word for 3 hours everyday on the main channel. I like McAfee a lot but that still seems like a stretch,

Feels like ESPN is 'selectively' cost cutting and targeting long tenured (expensive) employees.
That’s a very fair point because I agree that’s an idiotic deal.
 

AuH2O

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And yet ESPN just shelled out $10M per for Pat McAfee plus whatever they're going to pay his crew and picked up 100% of his production costs including, apparently, reimbursing him for the purchase and renovations of his new building/studio while giving him the go ahead to use everything but the f-word for 3 hours everyday on the main channel. I like McAfee a lot but that still seems like a stretch,

Feels like ESPN is 'selectively' cost cutting and targeting long tenured (expensive) employees.
And yet they wouldn't pick up a much smaller tab to get much more valuable brands in OU and UT from a conference in which they split rights, to a conference in which they'd have sole rights to them.

Yet people think they are going to pay way more money to get lesser valued brands to move from a conference to which they own sole rights to conferences where they are sharing rights.

It makes absolutely zero sense for ESPN to want this. In fact, if anything NBC and Fox might want it and ESPN would resist. And even though NBC and Fox might want it to happen, it's really hard to imagine them writing out massive checks to get these ACC brands at Big 10 costs.

People have tried to rationalize some reason for ESPN to want to help bust of the ACC by threading some "they want consolidation" needle, but in the end the networks want the best and most inventory for the lowest cost. The current ACC deal gives ESPN that better than any remotely reasonable scenario.

It's an oversimplistic view to say "these ACC schools can go to the Big 10, these can go to the SEC, these to the Big 12..." as a case to dissolve the league. You have to get enough teams willing to dissolve. The only way that happens is if a bunch align all their different landing spots at once, which can't happen without major under the table collusion that will be easy as hell for the leftovers to hammer in court.
 

Gonzo

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And yet ESPN just shelled out $10M per for Pat McAfee plus whatever they're going to pay his crew and picked up 100% of his production costs including, apparently, reimbursing him for the purchase and renovations of his new building/studio while giving him the go ahead to use everything but the f-word for 3 hours everyday on the main channel. I like McAfee a lot but that still seems like a stretch,

Feels like ESPN is 'selectively' cost cutting and targeting long tenured (expensive) employees.
McAfee has a massive following. Over the last year his show has had over 319 million views. ESPN seems to be investing in talent that's most likely to bring a strong ROI, nothing all that strange about it.
 

isucy86

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You’re still not answering where the billion dollars (at a min) is coming from just for the exit fee. The schools are already talking about not making enough and you expect them to pony that up? Also those 7 schools 100% do not all have landing spots in the P2 and if they do no guarantee those schools will get a full share.

The logic that espn would pony up money in the middle of massive cost cuts to have the media rights to fewer schools continues to be one of the more absurd things that gets posted on here.
I don't see the ACC falling apart for 4-6 years. So the massive cost cuts should be in the rear view mirror.

The ACC deal with ESPN is $17M/school annually. The SEC and Big10 deals are around $65M/school annually. Let's say the Magnificent 7 schools join Big10 or SEC in 2028, 8 years before the ACC GOR expires. And there are 7 schools left behind. A 1:1 ratio, so easy math.

- Per School Big10/SEC Incremental Revenue 8 Years = $384M / $48M/yr ($65M-$17M)
- ACC Exit Fee = $125M
- Net Revenue Over 8 Years = $259M

I would expect the left behind 7 would negotiate beyond the $125M exit fee. And there is some wiggle room in that $259M figure that I would bet the Magnificent 7 would part with.

A key is a majority of schools not getting a Big10/SEC invite, getting a Big12 invite. ACC schools should be financially ahead making $32M annually in the Big12 vs. $17M annually in the ACC. And by 2028 the Big12 will be a couple years out from its next media rights deal.

Greed can make the impossible happen.
 

JRE1975

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McAfee has a massive following. Over the last year his show has had over 319 million views. ESPN seems to be investing in talent that's most likely to bring a strong ROI, nothing all that strange about it.
And the demographic of his audience is probably spot on for ESPN advertisers.
 

FriendlySpartan

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I don't see the ACC falling apart for 4-6 years. So the massive cost cuts should be in the rear view mirror.

The ACC deal with ESPN is $17M/school annually. The SEC and Big10 deals are around $65M/school annually. Let's say the Magnificent 7 schools join Big10 or SEC in 2028, 8 years before the ACC GOR expires. And there are 7 schools left behind. A 1:1 ratio, so easy math.

- Per School Big10/SEC Incremental Revenue 8 Years = $384M / $48M/yr ($65M-$17M)
- ACC Exit Fee = $125M
- Net Revenue Over 8 Years = $259M

I would expect the left behind 7 would negotiate beyond the $125M exit fee. And there is some wiggle room in that $259M figure that I would bet the Magnificent 7 would part with.

A key is a majority of schools not getting a Big10/SEC invite, getting a Big12 invite. ACC schools should be financially ahead making $32M annually in the Big12 vs. $17M annually in the ACC. And by 2028 the Big12 will be a couple years out from its next media rights deal.

Greed can make the impossible happen.
Math checks out if they get immediate full shares and don’t have to pay anything for breaking the GOR. Agree the problem is those 7 are not all getting into the P2. Also wonder if the media partners of the P2 think those schools are worth it. For example the Presidents in the big ten love Virginia but do the media partners love them enough to shell out another 70mil per year for them.
 
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clone52

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You’re still not answering where the billion dollars (at a min) is coming from just for the exit fee. The schools are already talking about not making enough and you expect them to pony that up? Also those 7 schools 100% do not all have landing spots in the P2 and if they do no guarantee those schools will get a full share.

The logic that espn would pony up money in the middle of massive cost cuts to have the media rights to fewer schools continues to be one of the more absurd things that gets posted on here.
It's coming from the Big 10 or SEC. They would front them the dough and have it paid back with reduced media payouts for awhile