OT: Florida State to sue ACC over GOR

[CL82]

I could be wrong but I think FSU's strategy here is to threaten that a document the conference does not want subject to FOI requests (the GOR agreement) would be called into discovery if the suit proceeds, making it available for an FOI request, leading the ACC to settle to avoid this.

Not so sure that's much of an impetus to settle. Keeping the GOR private he's a tool to make it enforceable. Settling with FSU will provide a template for breaking it.

 

[Zissou]

If it’s an expensive settlement it still protects the value of the GOR and the security of the ACC. $130M exit fee plus $200M+ to buy out of the GOR.

That might be fair to both sides. ACC gets rid of a discontented member.

If it’s much less than that, the ACC might be better to defend its position all the way through the legal process, cases in multiple states, maybe federal, and all of the appeals.

What will be the estimated legal costs for FSU to see this through without settlement?

 

[TheCatsLair]

I think this is incorrect.

The GOR is valuable and is separate from the ESPN contract.

It's not completely separate. There's a reason that it was signed concurrently with the TV deal. The fact that the TV deal with ESPN is not guaranteed beyond 2027 makes the GORs valueless at that point because it would be keeping a conference tied together at a time it does not have a TV deal.

 

[Zissou]

It's not completely separate. There's a reason that it was signed concurrently with the TV deal. The fact that the TV deal with ESPN is not guaranteed beyond 2027 makes the GORs valueless at that point because it would be keeping a conference tied together at a time it does not have a TV deal.

The GOR brings value and security to the ACC to make a media deal. It’s reasonable that a long term deal has an option, in this case ESPN’s option. That option will be exercised one year from now.

The GOR is far from valueless. It underwrites the value of ESPN exercising its option.

Should ESPN end the deal buy not exercising the option in early 2025, the the GOR is still very valuable as the ACC negotiates an alternative contract for beyond 2027.

Fox, for example, could sign a 3 year deal with the ACC through 2030. Or a deal through 2036. It might value a deal through 2040 with much more risk as the GOR runs out in 2036.

 

[CTFAN4LIFE]

Cheaper to pay a few top ACC brands under the SEC umbrella.

I think this is getting at the crux of all of what will occur to the ACC. We have the PAC as Exhibit 1...

The PAC was gutted because like most/all conferences, it had tiers of values that the schools were worth. The most valuable (USC, UCLA, OR and WA) went to the B1G. The rest went to the Big12, the ACC, or were left behind.

It's called realignment and money/value is driving the movements. So, why would the ACC be any different? It has upper tier schools (e.g. FSU and a few others) that are worth more to tv outlets/advertisers that will move to higher end conferences and it has others that will move elsewhere as well. All of this works well for the media outlets because it can generate more higher viewed games that advertisers will pay more to place their ads on. And, they shed paying for low-vale schools. Pretty basic business drivers.

The lower viewed schools more and more will be left to play each other and do it more frequently on lower end platforms/streaming. Higher end schools will be on the best platforms. Again, basic business drivers.

FSU has higher football aspirations than the rest of the ACC and has determined in order for them to optimize their past, current, and future investments in football that it is better off moving out of the ACC. Not much to argue there...

So, they announce they seek a divorce. They think they have enough legal grounds and public pressure to make a move that will cost them less than their exit costs over some period of time they find reasonable.

They've clearly thought about all of this for several years. They've lined up strategy on raising exit monies and it's pretty common belief amongst insiders and unbiased reporters that they have had enough detailed input from third party media consultants to feel confident that they are valued by at least one of the two high value conferences (B1G and SEC) to have a landing spot if/when they free themselves.

I think they know they have a spot in the B1G and are now willing to leave the ACC and are confident that they can negotiate a settlement substantially less than the $572m amount they believe is the high end. I think they believe they have enough dirt/legal ground that they won't be sitting across the ACC in a court room.

If this occurs, then the door will be open for other high value ACC schools to leave as well. Seems like the FSU settlement will range from (a) no GOR and 60% of exit fee at the floor to (b) full $572m at the ceiling. So, maybe $130 to $572m? Am I wrong on this range?

They certainly seem comfortable making this all public and so they must be convinced that over the long haul even at the higher end of the GOR + exit cost range, that they will come out ahead financially while raising their football brand.

 

[CTFAN4LIFE]

The GOR brings value and security to the ACC to make a media deal. It’s reasonable that a long term deal has an option, in this case ESPN’s option. That option will be exercised one year from now.

The GOR is far from valueless. It underwrites the value of ESPN exercising its option.

Should ESPN end the deal buy not exercising the option in early 2025, the the GOR is still very valuable as the ACC negotiates an alternative contract for beyond 2027.

Fox, for example, could sign a 3 year deal with the ACC through 2030. Or a deal through 2036. It might value a deal through 2040 with much more risk as the GOR runs out in 2036.

Unless the GOR was written in some very strange/un-smart manner (which I suppose it could be) wouldn't the GOR dissolve on its own or be something member schools could exit from if the media contract with ESPN discontinued via no extension? There'd be no media contract to tie a GOR to.

 

[CL82]

If it’s an expensive settlement it still protects the value of the GOR and the security of the ACC. $130M exit fee plus $200M+ to buy out of the GOR.

That might be fair to both sides. ACC gets rid of a discontented member.

If it’s much less than that, the ACC might be better to defend its position all the way through the legal process, cases in multiple states, maybe federal, and all of the appeals.

What will be the estimated legal costs for FSU to see this through without settlement?

I'm not so sure. Once the value of escaping the GOR becomes quantifiable, then it's just a matter of math for the other teams that are possible targets of the P2. Any settlement would need to be a sufficiently high number that it would be prohibitive to other teams. Of course, if it were, it would likely also be prohibitive to FSU.

 

[Zissou]

I'm not so sure. Once the value of escaping the GOR becomes quantifiable, then it's just a matter of math for the other teams that are possible targets of the P2. Any settlement would need to be a sufficiently high number that it would be prohibitive to other teams. Of course, if it were, it would likely also be prohibitive to FSU.

I agree. If a settlement is possible, it’s about finding the number that FSU can buy out but is also sufficiently high to deter other defections.

If 4 teams want out, is it so bad to put $1B in the bank for their exit? That might be fair.

 

[Zissou]

Unless the GOR was written in some very strange/un-smart manner (which I suppose it could be) wouldn't the GOR dissolve on its own or be something member schools could exit from if the media contract with ESPN discontinued via no extension? There'd be no media contract to tie a GOR to.

No the GOR is separate. It enables the ACC to shop and negotiate a TV deal.

If the ESPN deal discontinues, the ACC still has the GOR so it can still negotiate an alternate TV deal for 2028-2036.

 

[CTFAN4LIFE]

No the GOR is separate. It enables the ACC to shop and negotiate a TV deal.

If the ESPN deal discontinues, the ACC still has the GOR so it can still negotiate an alternate TV deal for 2028-2036.

I'm not doubting you but are you sure of that/seen this documented? Most deals/contracts/agreements have exits or dissolutions. I suppose the GOR might not have had this but if I was a party to the GOR, I would have made sure it dissolved if the media deal associated to it dramatically changed or expired.

 

[Zissou]

I'm not doubting you but are you sure of that/seen this documented? Most deals/contracts/agreements have exits or dissolutions. I suppose the GOR might not have had this but if I was a party to the GOR, I would have made sure it dissolved if the media deal associated to it dramatically changed or expired.

No one can be sure.

The agreement has been widely described as “iron clad”, including strong opinions on its strength from members, so probably no easy exits.

A logical construct would be that the ESPN contract is contingent on the GOR, not the other way around.

 

[Zissou]

The FSU audition to the SEC this evening isn’t promising for their ability to compete.

 

[BlueHen]

I guess FSU can STFU.

 

[CTFAN4LIFE]

The FSU audition to the SEC this evening isn’t promising for their ability to compete.

Seems like not much to conclude when 20 of their top players opted out.

 

[BlueHen]

Seems like not much to conclude when 20 of their top players opted out.

No more free shoes I guess.

 

[Zissou]

Seems like not much to conclude when 20 of their top players opted out.

Both sides had more than a dozen opt out.

Does FSU have a player out that is a better player than Brock Bowers?

I’m not sure there is any configuration of FSU players from this season that could compete with even a short rostered Georgia team.

 

[CTFAN4LIFE]

Both sides had more than a dozen opt out.

Does FSU have a player out that is a better player than Brock Bowers?

I’m not sure there is any configuration of FSU players from this season that could compete with even a short rostered Georgia team.

True, but FSU had its top 10 offensive players out. What a joke non-CFP bowl games are... Seems like a good number of them should be ended.

 

[Zissou]

True, but FSU had its top 10 offensive players out. What a joke non-CFP bowl games are... Seems like a good number of them should be ended.

None of them are as good as Brock Bowers.

And the Dawgs just marched down the field with their 3rd string QB.

 

[CTFAN4LIFE]

None of them are as good as Brock Bowers.

And the Dawgs just marched down the field with their 3rd string QB.

Whatever - I can't be bothered to pay attention to ghost bowl games.

 

[Zissou]

Ooof. The ACC should be suing FSU for devaluing the conference at the Orange Bowl. The conference should have sent SMU.

 

[Zissou]

ESPN is switching to a previously broadcast Bass Masters event

 

[UConnTrumbull]

FSU did a great job proving their case that the ACC is trash

 

[Rufus]

I think this is getting at the crux of all of what will occur to the ACC. We have the PAC as Exhibit 1...

The PAC was gutted because like most/all conferences, it had tiers of values that the schools were worth. The most valuable (USC, UCLA, OR and WA) went to the B1G. The rest went to the Big12, the ACC, or were left behind.

It's called realignment and money/value is driving the movements. So, why would the ACC be any different? It has upper tier schools (e.g. FSU and a few others) that are worth more to tv outlets/advertisers that will move to higher end conferences and it has others that will move elsewhere as well. All of this works well for the media outlets because it can generate more higher viewed games that advertisers will pay more to place their ads on. And, they shed paying for low-vale schools. Pretty basic business drivers.

The lower viewed schools more and more will be left to play each other and do it more frequently on lower end platforms/streaming. Higher end schools will be on the best platforms. Again, basic business drivers.

FSU has higher football aspirations than the rest of the ACC and has determined in order for them to optimize their past, current, and future investments in football that it is better off moving out of the ACC. Not much to argue there...

So, they announce they seek a divorce. They think they have enough legal grounds and public pressure to make a move that will cost them less than their exit costs over some period of time they find reasonable.

They've clearly thought about all of this for several years. They've lined up strategy on raising exit monies and it's pretty common belief amongst insiders and unbiased reporters that they have had enough detailed input from third party media consultants to feel confident that they are valued by at least one of the two high value conferences (B1G and SEC) to have a landing spot if/when they free themselves.

I think they know they have a spot in the B1G and are now willing to leave the ACC and are confident that they can negotiate a settlement substantially less than the $572m amount they believe is the high end. I think they believe they have enough dirt/legal ground that they won't be sitting across the ACC in a court room.

If this occurs, then the door will be open for other high value ACC schools to leave as well. Seems like the FSU settlement will range from (a) no GOR and 60% of exit fee at the floor to (b) full $572m at the ceiling. So, maybe $130 to $572m? Am I wrong on this range?

They certainly seem comfortable making this all public and so they must be convinced that over the long haul even at the higher end of the GOR + exit cost range, that they will come out ahead financially while raising their football brand.

This is exactly how I see this playing out. I think FSU has one more season in the ACC and then bolts to the B1G. I don’t think the SEC will make a play for them as they have eyes for NC and VA.

 

[CTFAN4LIFE]

FSU did a great job proving their case that the ACC is trash

29 opt-outs will do that... unfortunately, I think there will be more of this hollowness for the non-CFP games. When it goes to a 12 team CFP there will be 11games that matter and the rest will crater.

 

[KryHavok]

The FSU audition to the SEC this evening isn’t promising for their ability to compete.

And it couldn't have happened to a nicer team from a nicer conference. Makes UConn's "big" loss in the Fiesta Bowl look relatively pale by comparison. That's an embarrassing blowout considering their regular season record...what sweet tasting tears they must be shedding. v^_^v