The Confidential

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Archive for the tag “realignment”

12 Dec 2012
3 Comments

Grant of Rights: A Panacea?

The official definition of a panacea is either a “remedy for all disease or ills” and/or “an answer or solution for all problems or difficulties.”  Some think that the Big XII is extremely more stable than the ACC because it has a grant of rights for the next 12 years between its institutions, whereas the ACC relies on exit fees to impose solidarity.  Given that Maryland is leaving, and everybody is lining up to pay exit fees to flee the Big East, exit fees are obviously mere speed bumps on the realignment highway.  Indeed, the conventional wisdom is that a grant of rights is THE way to establish unbreakable solidarity.  Or is it?

It is common knowledge that the SEC does not rely on exit fees or a grant of rights.  And yet nobody is leaving the SEC any time soon.  The Big 10 has a grant of rights, and only some silly talk regarding Penn State in a post-sanctions world has caused anyone to even consider it possible for a defection.  And that likely has little to do with the grant of rights and more to do with the great institutional fits/financial situation.  This issue only really matters with the Big XII.  The question is whether the grant of rights prevents realignment from touching the Big XII?  The answer must be “no.”

First and foremost, a grant of rights is a contract.  A contract can always be broken.  As long as the breaching party pays the non-breaching party the appropriate damages, there is nothing to prevent a breach of contract.  If you contract to paint someone’s house for $1,000, expecting to generate $300 in profit… the homeowner could breach the contract and pay you the $300 anyway.  If the homeowner found someone to do the work for $600, that would make sense for the homeowner.  Conversely, if you were offered $5,000 to paint someone else’s house, you could elect to break your obligation and pay the homeowner the difference in what it would cost to replace you.  If there was a replacement for $1,100, you would owe $100.  If the replacement was $900, you would owe nothing.  Again, you are allowed to breach a contract.

As it relates to a grant of rights, any school could breach the contract.  In doing so, they would owe their conference damages.  How those damages would be calculated cannot be that much more different than ascertaining the damages caused by any other defection.  If anything, it could be narrower because the obligation is limited to certain revenue streams.  While an exit fee addresses the uncertainty of calculating damages with a termination of a conference membership, the damages for breaching a contract provision regarding grant of rights would be narrower–how much, if any, revenue was lost due to losing the broadcast rights.  But, even if the measures were identical, the damages would not necessarily be greater.  And, without an exit fee, litigation would be required to reach that determination.  But the main point to take away at this juncture is that any party can breach a contract, including a party to a grant of rights agreement.

Second, it is plausible that the grant of rights could be “avoided” rather than breached.  If the Big 10 wanted Texas, the grant of rights Texas signed only relates to its home games.  The only rights the Big XII has relate to those games.  A game featuring Texas @ Iowa State is irrelevant to Texas’s grant of rights.  The Big 10 would be able to televise Texas @ Indiana or Texas @ Ohio State.  The Big 10 would not be able to televise Michigan @ Texas.  Instead, the Big XII could (and would) televise that game.

To be sure, there is little incentive for ESPN or Fox to want to switch conference members around within their broadcast rights.  But the Big 10 has an additional wrinkle–its own network.  If Texas left the Big XII for the Big 10, the BTN could receive better games, meaning better ratings and more revenue.  Texas @ Michigan State on the BTN is better than Purdue @ Michigan State.  And even if the Texas game was on ESPN, that would still slide a better game down to the BTN.  Along the same lines, with the Pac-12 owning its own network, landing Texas would juice up the ratings.

The real question is how Texas benefits.  Well, first and foremost, the Big 10 would have to agree to not let the absence of a full TV schedule lead to a different payout.  If Texas is currently receiving $20M from the Big XII, the Big 10 would have to give Texas at least that amount–even if Texas did not pull its own weight for several years.  With the Big 10 projecting $40M in revenue per team soon, each school could give up ~$5M and create a pool of to pay for Texas and Texas Tech to not lose money by switching.  It would be temporary–once the grant of rights expired, the Big 10 would have that much more of a valuable property.  It would be an investment.

It would certainly not be any more of an investment than what the Big 10 is doing with Rutgers and Maryland.  There is no certainty that those mediocre athletic schools will pay for themselves.  In contrast, Texas would certainly pay for itself.  The familiar mantra around Frank the Tank is that these are 100 year decisions.  If so, 12 years of a grant of rights is only another speed bump.  If the Big 10 believes in its ability to generate TV revenue with its model, then snagging Texas could be worth the initial investment.

Third, getting back to damages, things could get interesting.  In the context of an Iowa State, would the Big XII really care?  It might be able to lure a replacement that added value.

With a Texas, the Big XII would most definitely care.  If the Big XII is mortally wounded, damages might be easier to ascertain.  If the powers-that-be lowered the Big XII TV revenue, that would make for easy calculations.  That could get ugly.  But that would be subject to litigation–not all that different from exit fees.  If Texas & Tech were willing to pay $15M/year between them for 12 years–is it worth fighting the fight?  Either way, Texas would be gone and there would be nervousness within the Big XII ranks.

Would the Big 10 actually take Texas?  Probably not.  But if the Big 10 became convinced that the Big XII was going to encroach on its present or future properties, i.e. Virginia Tech and Florida State, all bets are off.  The Big 10 could always try to get Texas and Florida State first, allowing the ACC and Big XII to sort out who gets to be the 4th conference.  Two huge recruiting and population areas opening up, with $$$ to follow.  Imagine adding Texas, Texas Tech, Florida State, and Miami as part of an 18-team package. If you are the Big 10, imagine being able to offer the western teams a trip to Texas, while offering the eastern teams a trip to Florida.  An academic hit, to be sure, with FSU and Texas Tech.  But is this any more unrealistic than any other 18 or 20 team expansion scenario?

Will it happen?  Probably not.  Or maybe.  Who knows?  As less time remains on the grant of rights with each successive year, the cost for trying to lure Texas out will decrease.  The looming damages would decrease.  In 5 years, you are looking at damages for only 7 years.  In a 100-year decision, that is a mere moment.

But the only point is that a grant of rights does not guarantee that realignment will not happen.  It might not be feasible for schools like Oklahoma State and West Virginia to change affiliation.  But, in the right situation, the grant of rights will not prevent it.  Everything comes down to money.  With big enough money at stake, anything can happen–even with a grant of rights.  The Confidential’s verdict on a grant of rights: helpful, but not a panacea.

Posted by acaffrey in Conference Realignment, Opinion and tagged , ,
08 Dec 2012
5 Comments

Big 10 Looking East For Expansion

Amid all the rumors of this team or that team being lured into the largesse of the Big Ten, the latest word is that, notwithstanding the additions of Rutgers and Maryland, Big Ten expansion into the East remains on the table.  Only the Big Ten is apparently looking a lot farther east than one might have expected.  A Northwestern blog is reporting that, not only is the Big Ten considering adding schools, it is considering the addition of six schools.

While Frank the Tank speculates on Florida State, the major development is that the Big 10 envisions four, 5-school pods, with one being made up exclusively of teams from east.  As in way east.  Here are the five favorites for that far eastern pod:

  • University of Pune (India).  With 500,000 students enrolled, this would, by far, be the largest university in the Big 10.  Assuming roughly 75,000 graduates per year, Big Ten Network executives project that it will be difficult for any local cable carrier to not carry the BTN on basic cable.  Wikipedia has this to say about student life at what the Big 10 expansion committee amusingly refers to as “Pune State”–“It is very challenging in PU. I worked hard and came out with flying colors but story is not same for everyone.”  Sounds like an SEC student.  But, lest you think “Pune State” is only churning out telemarketers and electrical good troubleshooters, the school has well-respected colleges in all the major fields.  For information on Pune football, see here.
  • University of the Punjab (Pakistan).  Founded in 1882, the University of the Punjab has a healthy 450,000 students enrolled.  The Big Ten apparently envisions that it can capitalize on the friendly political rivalry between India and Pakistan to elevate Pune-Punjab into the next Michigan-Ohio State.  Indeed, the schools already have some bad blood, apparently originating from one school referring to the other as its “little brother” following a cricket victory.  A Big Ten source notes that an invitation to the school is not a guarantee, but the major proponents see the school as a “Purdue in the Punjab.”  Or vice-versa.  For more information on Punjab football, see here.
  • Peking University (China).  Despite having only 30,000 students, Peking University was the very first modern university in China.  The Big Ten likens Peking to a public Northwestern, with a small student body but the high quality that one comes to expect from anything with the words “Made in China” on it.  The plan is to use Peking to capture the central region of China, which is estimated to have eleventy billion television households.  If there is a drawback for Peking, it is the absence of a football team at this time.  However, a Big Ten source dismissed this issue: “We just took Rutgers, didn’t we?”  Touche, Mr. Anonymous Big Ten source.
  • University of Tokyo (Japan).  Lest you think the Big Ten’s expansion plans were based solely on the “P” book from a set of encyclopedia, the Big Ten is looking strongly at Tokyo.  Admittedly, there is some urgency to add Tokyo.  With the Big East’s recent rumored addition of Hawaii, they will certainly be looking for a Pacific Rim partner.  Tokyo fits the urban university model that makes made the Big East a great good satisfactory conference.  With nearly 14,000,000 people living in Tokyo, Big Ten Network bean counters are literally drooling.  With an 80.3 in research, this website lists Tokyo as #1 in research among Asian universities, which has strong appeal to the Big Ten’s CIC research consortium.  That’s right, an 80.3!  That’s a lot of dongs or yen or whatever.  Look, the Confidential likes pie charts much better than bar charts.  Sorry.  For more on Tokyo football, see here.
  • University of Hong Kong (Hong Kong).  The UHK boasts that it is “the oldest tertiary education institution in Hong Kong.”  Founded in 1910 (the year Greg Oden was really born), the UFK fits the Big Ten mold of a flagship university.  The UHK will have to invest some funds to expand the Stanley Ho Sport Centre to accommodate the 40,000 Nebraska fans that go to every road football game.  But it looks like the Henry Fok Swimming Pool already looks ready to host a Big Ten swim meet.  And the academic types already love the UHK–a University so passionate about research that it devoted an entire website tab to the subject.  It is unclear whether UHK has a football team, but Bobby Petrino’s father indicates that there is mutual interest between the school and his son.

So those are the five leading candidates right now.  If true, this expansion is sure to anger some of the American schools that were hoping for an invitation.  But the Big Ten’s mantra has been about expanding into new, vibrant markets.  With the United States meandering from recession to recession, it is clear that the Big Ten needs to be looking at tomorrow’s markets from a population and financial standpoint.  So, with apologies to schools throughout the southeast United States, the Far East makes perfect sense–as in dollars and cents–for the Big Ten.  These are 100-year decisions, after all.

Expected Pods:

Far East: Pune, Punjab, Peking, Tokyo, Hong Kong

East: Penn State, Maryland, Rutgers, Ohio State, [20th team, TBD]

Central: Michigan, Michigan State, Purdue, Indiana, Northwestern

Far Central: Minnesota, Nebraska, Iowa, Wisconsin, Illinois

Protected rivalries are Northwestern-Illinois, Michigan-Ohio State, Rutgers-Peking. 

Posted by acaffrey in Conference Realignment, Non-Serious, Sarcasm, Satire and tagged ,
07 Dec 2012
3 Comments

Florida State & Expansion (Update)

Frank the Tank is now fanning the fires with respect to a Florida State move to the Big 10.

But the ACC Presidents decided to jointly issue a statement pledging allegiance to the ACC.  The text is as follows:

“We, the undersigned presidents of the Atlantic Coast Conference, wish to express our commitment to preserve and protect the future of our outstanding league.  We want to be clear that the speculation about ACC schools in negotiations or considering alternatives to the ACC are totally false.  The presidents of the ACC are united in our commitment to a strong and enduring conference.  The ACC has long been a leader in intercollegiate athletics, both academically and athletically, and the constitution of our existing and future member schools will maintain the ACC’s position as one of the nation’s premier conferences.”

Obviously, this is not a binding contract or anything.  But it is noteworthy that some of the most desirable expansion targets initiated this process.  Regardless of is value, it is an unprecedented move.  This is negative, because such moves have not previously been necessary.  It is positive because the Presidents are trying to assure each other that they do not need to try to beat each other to the punch.  Unless and until there is a grant of rights (which the Confidential believes is not insurmountable), the rumors are not likely to stop.  Indeed, one wonders how much of the realignment rumor mill is being created by those who recruit against the ACC.

 

Posted by acaffrey in ACC only, Conference Realignment and tagged , , ,
05 Dec 2012
10 Comments

Is Florida State the Next to Leave the ACC?

With the Georgia Tech rumors squashed over the weekend, the rumor mill has turned back to Florida State.  This time, it is a rumor that Florida State is shopping itself around.  You can take the source for whatever it is worth.

One does have to keep in mind that the Florida State fan base is putting a lot of pressure on the administration here.  Somehow, they have rationalized that their football failures are based on lack of revenue, rather than simple things like poor coaching and bad luck. The best case scenario is that Florida State’s leadership has to come out and say that they are happy with the ACC.  This is imperfect because it will just anger the fan base more.  The worst case scenario, of course, is that where there is smoke, there is fire.  Welcome to the Big Ten’s vision of college football–where money is more important than anything else.

The reality is that, unless and until someone does something to stabilize the ACC, it is just going to be one rumor after another.

So what could possible stabilize the ACC?  The Confidential thinks that the only thing that could possible stabilize the ACC is for ESPN to step up and make the ACC a legitimate player from a revenue standpoint.  In the absence of that, there will not be a grant of rights, which would be significantly more protective than the exit fee (whatever it is).  At the very least, the ACC and ESPN should negotiate to allow Florida State to keep its precious Tier III rights.  Throw a dog a bone, even if it is whining for no reason.

Posted by acaffrey in ACC only, Conference Realignment and tagged , , , ,
03 Dec 2012
7 Comments

Is Georgia Tech the Next to Leave the ACC? Updated.

The Confidential does not invent these rumors, just reporting them. This one is getting a lot of attention over on Frank the Tank’s latest blog entry.  See the comments and sources there.

This never ends.

Update 1: For whatever its worth, the acting athletic director is denying the rumors.  See here.  The money quotes are as follows:

“I’m not aware of any communications between university leadership and the Big Ten or any other conference,” Griffin said Friday afternoon from Charlotte, where Tech will play Florida State for the ACC football championship Saturday.

Griffin acknowledged that an action like switching conferences from the ACC to the Big Ten would take place at an executive level, but said that Tech president G.P. “Bud” Peterson “has told me there’s been no communication nor does he expect any.”

It is hard to know what is smoke and what is smoke from fire these days.  Take most of what you read with a grain of salt, apparently.

Update 2: Well, Bud Peterson has spoken up.

Here is the money quote:

“Not true. Not true,” Peterson said prior to the ACC Championship game. “We’re happy in the ACC. We’re staying.”

Internet and radio reports cited unnamed sources or repeated rumors that the school will follow Maryland out of the ACC and to the Big Ten, one reporting that the school will hold a news conference Monday to announce its departure.

“We’re not going anywhere,” said Peterson, speaking outside his suite at Bank of America Stadium.

Perhaps there can be some relaxation now.

Posted by acaffrey in Conference Realignment and tagged , , ,
01 Dec 2012
2 Comments

Now the Rumor is Georgia Tech & Virginia to the Big 10

Someone named Kevin Jones claims to have a source indicating that Georgia Tech and Virginia will be in the Big 10 by Monday.  If so, it certainly seems that Jim Delaney is hell bent on putting the ACC out of business.  If you cannot win on the field or on the court, at least you can win in the conference realignment game.

 

Posted by acaffrey in Conference Realignment and tagged , , , ,
30 Nov 2012
2 Comments

Is Georgia Tech the Next to Leave the ACC?

The Confidential does not invent these rumors, just reporting them. This one is getting a lot of attention over on Frank the Tank’s latest blog entry.  See the comments and sources there.

This never ends.

Update: For whatever its worth, the acting athletic director is denying the rumors.  See here.  The money quotes are as follows:

“I’m not aware of any communications between university leadership and the Big Ten or any other conference,” Griffin said Friday afternoon from Charlotte, where Tech will play Florida State for the ACC football championship Saturday.

Griffin acknowledged that an action like switching conferences from the ACC to the Big Ten would take place at an executive level, but said that Tech president G.P. “Bud” Peterson “has told me there’s been no communication nor does he expect any.”

It is hard to know what is smoke and what is smoke from fire these days.  Take most of what you read with a grain of salt, apparently.

Posted by acaffrey in Conference Realignment and tagged , , ,
29 Nov 2012
2 Comments

The College Expansion Game… is it Risk or is it Monopoly?

Everyone talks about college football as if it was a game of Risk.  Delaney and the Big 10 have the blue armies and are moving 10 of them to Kamchatka.  Slive and the SEC have the red armies, and will respond by trying to take Egypt.  Empire creation at its best.  Of course, some of those folks then turn around and say that the Big 10 and SEC are not competing against each other.  Huh–what Risk game involves cooperation?  The goal is to be the last one standing.  In any event, it is sad that college sports is no longer like Monopoly.

Yes, in the old days, college sports was like Monopoly.  The NCAA had the Monopoly of all the properties.  The value to a conference was driven not by the properties (i.e. the individual schools), but what could be done by acquiring all the similarly colored properties (i.e. forming conferences).  The Big 10 was the Dark Blues, with Michigan and Ohio State.  The Pac-12 was the Green properties.  No matter who played in the Rose Bowl, it was special.  Some conferences benefited by location–the Oranges and Reds have a little extra value because you might get sent to St. Charles Place and have to run them.  This is the equivalent to the Big East having the major metropolitan areas in basketball.  Or the SEC having the advantage of the key Southern, football-crazy areas.  Notably the game of Monopoly made the colored properties adjacent.  Indeed, being nearby your neighbors is valuable to a cohesive conference (notwithstanding the development of serious rivalries, of course).  Other than Notre Dame-USC, is there any rivalry that does not involve geographic proximity?  No.

Now, it’s all about a brand.  You might be able to make more money combining Boardwalk and Park Place, but Boardwalk would know its valuable and not want to be dragged down by Park Place.  Conferences are trying to build houses on Boardwalk and Marvin Gardens.  It works because the people paying are only focusing on the relative worth of the properties they are landing on… i.e. Boardwalk is a better property than Marvin Gardens.  The people paying do not realize that pairing Boardwalk with Park Place is more profitable than just Boardwalk alone.  Fans of conferences want to break off pieces of other conferences.  Fans of the Big 10 are drooling over North Carolina, forgetting that part of what makes North Carolina great is its rivalries with Duke, North Carolina State, and Virginia.  Sure, it’s a great school–but you cannot fabricate sports rivalries.  And you cannot just create a trophy and make it a rivalry.

The Confidential hopes that someday, the powers-that-be recognize that the real value in conferences was when they were geographically appropriate.  Perhaps they can figure out how to allow the revenues to be apportioned as per the current conferences, but go back to allowing schools to primarily play their neighbors.  More Penn State-Pittsburgh, and less Penn State-Iowa or Pittsburgh-Georgia Tech.

About the only thing we know is that, as of today, the Big East has Baltic Avenue.  Oh, and Connecticut Avenue.  And they had to mortgage Vermont Ave. to pay rent.  The ACC seems like the railroads–nice to have & pretty well spread out, but not generating enough money to keep up.  The SEC is now the Dark Blues–making plenty of money, and winning football and basketball titles regularly.  Or maybe the Big 10 is the Dark Blues.  It sure seems like the Big Ten Network is the “Chance” card sending someone to Boardwalk to make them wealthier every time it comes up.  And Rutgers just landed on Free Parking–from rags to riches on one roll of the dice.

In your game of College Sports/Expansion Monopoly… who is who?  Feel free to share your opinion.

 

Posted by acaffrey in Conference News, Conference Realignment, Opinion and tagged , , ,
28 Nov 2012
2 Comments

Louisville to ACC, According to Sources

As an update to yesterday’s report, ESPN is now reporting that the ACC voted to add Louisville.  If true, this is a great move for many reasons, such as:

  • It likely makes Florida State happy and shows a break away from the North Carolina/Virginia monopoly on decisions (whether real or perceived).
  • Louisville has strong (pun intended) football and basketball programs.  Rick Pitino joins Coach K, Roy Williams, and Jim Boeheim in the ACC.  Heck, maybe Jim Boeheim will even say that he likes this move?
  • Louisville is improving academically.  Probably.  Hopefully.  Maybe.  Doubtfully.  Who cares?  This is not just about academics anymore.
  • It likely makes Florida State happy.
  • Importantly, Louisville was desired by the Big XII, whereas UConn was not.  There is more urgency to add a team needed by the Big XII.  UConn should be there if/when the ACC needs to expand again.
  • All the other reasons mentioned in the ESPN article.  Indeed, that article almost looks like the ACC wrote it, doesn’t it?  ESPN cares about its investment in the ACC.
  • It likely makes Florida State happy.

West Virginia fans will not be couch burning mad over this, but they certainly will not be couch burning happy.  Perhaps will see some ottomans lit on fire due to the hypocrisy of rejecting WVU because of academics, but then taking Louisville.

The Confidential feels sorry for Cincinnati, UConn, USF, and to a lesser extent Navy.  These schools submitted applications to the ACC, but were not accepted.  Yet.  Again, conference realignment is far from over.  So these schools should avoid despair.

Posted by acaffrey in ACC only, Basketball, Conference News, Conference Realignment, Football and tagged , , , , , , , , , , , ,
28 Nov 2012
3 Comments

Possible ACC Expansion Vote on Wednesday

David Glenn of the ACC Sports Journal is reporting that the ACC will hold an expansion vote tomorrow.  As most are aware, an expansion vote requires 75% approval.  According to the report, five schools have expressed an interest: Louisville, UConn, Cincinnati, Navy, and South Florida.  Of these, Louisville has the best chance of being accepted, according to Glenn.

This does not mean that Louisville will get voted in.  Mark Blaudschun has tweeted that Louisville is currently one vote short.  The speculation is that North Carolina, Virginia, Duke, and/or Wake Forest are opposed to the move.  This means, of course, that the schools that care about football–Virginia Tech, Florida State, Clemson, Georgia Tech, North Carolina State, and Miami–are in favor of the move.  One would think Boston College would be in favor of the move too, as it would prevent neighboring UConn from immediately joining.

While the Confidential understands that Virginia and North Carolina may be apprehensive about allowing a school of Louisville’s academic pedigree to join, the Confidential thinks that the better course of action is to invest in Louisville to make the adjustments to improve academically.  Associating with the ACC will improve Louisville’s reputation far more than any school’s reputation will be hurt.  And Louisville is an extremely competitive basketball program–picture Duke-Louisville and North Carolina-Louisville conference matchups.  With the ability to take football to the next level, this is really a home run for the ACC.

Some may say that this will cause Virginia to leave.  But if Virginia leaves over this, Virginia was looking for a reason to leave.  This move will stabilize the ACC (as much as that is possible in the current landscape), which should be in the interests of all ACC institutions.  Making Florida State happy is, you know, probably a good idea.

So if the ACC adds Louisville, then this will be a happy day for everyone south of Storrs.  As the musical chairs continues, there is no reason to think that this would be the last move.  UConn will end up somewhere eventually, especially if there are further defections from the ACC.

Posted by acaffrey in Basketball, Conference Realignment, Football, Opinion and tagged , , , , , , , , , ,

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