I’ll let others review but I think tne last4 get the entire pot to figure out how it gets distributed.
Too good to be true?
Too good to be true?
The Pac~12 pre-nup…
- Thread starter ttowncoug
- Start date
"
4. Dissolution.
In the event of the dissolution or final liquidation of the Conference, all of the remaining assets and property of the Conference shall, after paying or making provision for the payment of all of the liabilities and obligations of the Conference and for necessary expenses thereof, be distributed to the members of the Conference so long as they are then qualified as a tax-exempt organization under Code Section 501(c)(3), or to such organization or organizations organized and operated exclusively for charitable or educational purposes as shall at the time qualify as an exempt organization or organizations under Code Section 501(c)(3) as the CEO Group shall de- termine. In no event shall any of the assets or property be distributed to any director or officer, or any private individual. "
4. Dissolution.
In the event of the dissolution or final liquidation of the Conference, all of the remaining assets and property of the Conference shall, after paying or making provision for the payment of all of the liabilities and obligations of the Conference and for necessary expenses thereof, be distributed to the members of the Conference so long as they are then qualified as a tax-exempt organization under Code Section 501(c)(3), or to such organization or organizations organized and operated exclusively for charitable or educational purposes as shall at the time qualify as an exempt organization or organizations under Code Section 501(c)(3) as the CEO Group shall de- termine. In no event shall any of the assets or property be distributed to any director or officer, or any private individual. "
In summary, if the conference dissolves, all of its assets get distributed to the members who still qualify as 501(c)(3), in a manner determined by the CEO group. No individuals can get distributions.
AND, 2 sections later…
Any member who delivers notice to leave the conference before 8/1/24 is subject to injunction and compensation, and even if a judge does not support the injunction, the conference can retain all media & sponsorship rights through 8/1/24. And, those members are no longer part of the CEO group and don’t get to be involved in conference decisions.
What happens if the conference does not dissolve, and we poach 4 other members, (NCAA guideline is 8 minimum)? Would the conference need to be dissolved to be eligible for the windfall?
If true, the Pac-12 name would need to terminate, and a new conference is therefore formed, with a new name....like Pac-West Conference, (PWC).
Obvious.....legal council would provide the correct answer.
If true, the Pac-12 name would need to terminate, and a new conference is therefore formed, with a new name....like Pac-West Conference, (PWC).
Obvious.....legal council would provide the correct answer.
Yes, too good to be true unfortunately. Wish the Cougs best of luck in whatever is next. Hopefully CFB can get things figured out sooner rather than later in a way that makes more sense.
I would guess no, but…
Since there are now 4 members of the CEO council they could revise the rules and engineer a different payout, assuming that’s allowed under California corporate law.
I read it as “…in the event of a conference dissolution, Larry Scott is entitled to receive all remaining assets/cash immediately.”
True?
It's highly unlikely that the remaining programs will receive all of that money, but I do believe that, in the end, WSU will receive enough compensatory settlement cash to pay off their debts and move forward with a clean balance sheet.
CP - paragraph 3 is where is gets interesting. It states "notice" not actually leaving.
This is the "pre-nup" clause....
No member shall deliver a notice of withdrawal to the Conference in the period beginning on July 24, 2011, and ending on August 1, 2024; provided, that if any member does deliver a notice of withdrawal prior to August 1, 2024, in violation of this chapter, the Conference shall be entitled to an injunction and other equitable relief to prevent such breach, and if a court of competent jurisdiction shall deny the Conference such injunctive relief, Conditions and Obligations of Membership CB 3-1 2021-22 Handbook • Page 8 CB 2-3 the Conference shall be entitled to retain all the media and sponsorship rights in the multi-player video distribution (MPVD) and telecommunications/wireless categories of the member purporting to withdraw through August 1, 2024, even if the member is then a member of another conference or an independent school for some or all intercollegiate sports competitions. Additionally, if a member delivers notice of withdrawal in violation of this chapter, the member’s representative to the CEO Group shall automatically cease to be a member of the CEO Group and shall cease to have the right to vote on any matter before the CEO Group. (6/10, 10/10, 7/11)
This is the "pre-nup" clause....
No member shall deliver a notice of withdrawal to the Conference in the period beginning on July 24, 2011, and ending on August 1, 2024; provided, that if any member does deliver a notice of withdrawal prior to August 1, 2024, in violation of this chapter, the Conference shall be entitled to an injunction and other equitable relief to prevent such breach, and if a court of competent jurisdiction shall deny the Conference such injunctive relief, Conditions and Obligations of Membership CB 3-1 2021-22 Handbook • Page 8 CB 2-3 the Conference shall be entitled to retain all the media and sponsorship rights in the multi-player video distribution (MPVD) and telecommunications/wireless categories of the member purporting to withdraw through August 1, 2024, even if the member is then a member of another conference or an independent school for some or all intercollegiate sports competitions. Additionally, if a member delivers notice of withdrawal in violation of this chapter, the member’s representative to the CEO Group shall automatically cease to be a member of the CEO Group and shall cease to have the right to vote on any matter before the CEO Group. (6/10, 10/10, 7/11)
The final 4 join a new conference, or conferences after 8/1/24, and get the money, rather than invite new members in. The Pac-12 could sell the name "Pac-12" or "Pacific Athletic Conference" or whatever trademarks or IP it may own to a new conference as part of the dissolution.
That last part is key. The remaining members get to make the decisions, anyone who serves notice of departure doesn’t get to decide what happens to the money. So the 4 - under this document - manage every dime, even those generated by the defectors in the upcoming season.
To me this looks like a pretty cut and dried intent to prevent schools from leaving the conference, and if they did leave that they would be subject to penalty from the conference. At this point I say USC and UCLA should have all monies withheld for the 2022/2023 school year, and all of the 8 traitors should get $0 dollars for the coming school year's activities broadcasts.
Of course, I have every confidence in the world that a slew of lawyers for the traitors will come along and totally muck this all up.
At this point, have the 4 remaining schools play a round robin, home and home schedule and then fill in their schedules with 6 non-league games for next year, with the league champs getting the access to the playoffs. The PAC will remain an entity as they then admit some Mountain West and other schools for the following year, after their exit fees decrease.
The first part I agree with. The second part…not as much. Apparently the NCAA wants at least 6 teams to make a conference. If we’re not there we can’t even dream of keeping P5 status and CFP/NCAA payouts.
Does the NCAA "want" at least 6 teams or do they "require" 6 teams? Big difference. If they require at least 6 teams, go out and find two teams to add for one year only to meet the rqmt. I'm sure there would be a couple schools out there that would pimp themselves out for a year or two for the right amount of money. The 4 Loyalists/Suckers should have quite the pot of $$$ to play with. Get creative!
Poison pill provisions have been around as long as there has been such a thing as corporate law. This one looks pretty cut and dried.
What is 100% clear is that the presidents of the institutions who jumped did so in an abrupt panic when their staff and/or boosters told them that a $25 million guarantee from Apple was not enough, regardless of any upside available by beating minimum viewer targets. A full commission salesperson would have viewed this as an opportunity to make more than the B12 $31 million by getting alums to sign up and watch. Univ leaders are about as far from a commission salesman from a risk/reward and personality perspective as you can get. So the defectors, who had each been putting together a deal behind closed doors, all jumped. They had little confidence in their ability to pump up viewership and lacked both the vision and ability to sell anything short of a fully guaranteed deal to alums and other stakeholders. It seems clear that they never got clarification regarding the full cost of leaving, relative to the last year's income OR the assets (chiefly the PAC 12 network, what ever that is worth). After all, what were they going to do, consult the league office for clarification? Not while they were keeping everything as quiet as possible. Some of them probably bought burner phones for the conversations, since they were trying to keep the lowest profile as possible while they were slinking around.
We may very well end up with a nice financial share of the close out of the league. A very nice share. And that looks on its surface to be enough to get us by for a few years. Where we go after that will depend on a lot of things, only partly income related. For example, if NIL is not restricted somehow, and probably roster sizes are not reduced, among other things, there will be more schools forced out over the next decade. Another conference may die. Viewership seems likely to decline as you cut more schools out of the game. Heck, it may not even be a decade before the next step occurs, as fast as the money snowball is currently rolling down the hill, taking all in its path.
Another clear point is that schools have little appetite for anything other than a guaranteed payout. I'm not sure how that will work as streaming inevitably becomes a bigger and bigger component of the payout...because streaming is ALWAYS going to have its payout be in synch with viewership.
What is 100% clear is that the presidents of the institutions who jumped did so in an abrupt panic when their staff and/or boosters told them that a $25 million guarantee from Apple was not enough, regardless of any upside available by beating minimum viewer targets. A full commission salesperson would have viewed this as an opportunity to make more than the B12 $31 million by getting alums to sign up and watch. Univ leaders are about as far from a commission salesman from a risk/reward and personality perspective as you can get. So the defectors, who had each been putting together a deal behind closed doors, all jumped. They had little confidence in their ability to pump up viewership and lacked both the vision and ability to sell anything short of a fully guaranteed deal to alums and other stakeholders. It seems clear that they never got clarification regarding the full cost of leaving, relative to the last year's income OR the assets (chiefly the PAC 12 network, what ever that is worth). After all, what were they going to do, consult the league office for clarification? Not while they were keeping everything as quiet as possible. Some of them probably bought burner phones for the conversations, since they were trying to keep the lowest profile as possible while they were slinking around.
We may very well end up with a nice financial share of the close out of the league. A very nice share. And that looks on its surface to be enough to get us by for a few years. Where we go after that will depend on a lot of things, only partly income related. For example, if NIL is not restricted somehow, and probably roster sizes are not reduced, among other things, there will be more schools forced out over the next decade. Another conference may die. Viewership seems likely to decline as you cut more schools out of the game. Heck, it may not even be a decade before the next step occurs, as fast as the money snowball is currently rolling down the hill, taking all in its path.
Another clear point is that schools have little appetite for anything other than a guaranteed payout. I'm not sure how that will work as streaming inevitably becomes a bigger and bigger component of the payout...because streaming is ALWAYS going to have its payout be in synch with viewership.
Not to burst any bubbles, but this is an agreement between the Pac-12 members only. Rule number one of contract law is, you aren't bound unless your signature appears thereon. In other words, unless the entities who hold the media rights, and who are paying the money, have agreed to pay out that money even if the conference goes to complete shit, and they aren't getting remotely what they bargained for (doubtful), our distribution, at best, is 1/4 of zero revenue. That is the first issue, I see! What does the media rights contract say?
My read/impression is the schools agree to assign 100% of their media rights to the conference. (Hence, GOR).
What is not clear is how legally/ethically/politically optics of the remaining schools keeping 100% of the cash. Even if you could do it, I would think that would be a move that would not be forgotten and could prevent a future relationship from happening.
If we play the legal card, claim harm and have damages, I could see the money getting hung up for so time.
I agree with cr8zyncalif that it seems the schools simply "rushed" or were "forced" (rumored Big-12 yes or no deadline) and didn't fully understand the implications of their decision or took a calculated risk. Either way, leaves the Cougs and the Beavs some leverage and ultimately may get us an invite to the Big-12 which seems like the best path forward.
They’re still under the old media rights deal for 23-24, which ran from the network through the conference to the schools. The only thing that changes next summer is that the PAC-12 doesn’t write checks to USC, UCLA, UW, UO, UA,ASU, CU, or Utah. The conference retains those funds for breach of contract.
Additionally, the reserve fund (supposedly upward of $100M by itself) and any other conference assets, are still subject to liquidation.
And under the agreement, all decisions about distribution are now made by the P4 without input from the defectors.
Of course…the lawyers will try to change that.
How is that going to get us invited to the Big 12? Big 12 has no claim to the money.
If it is legal, screw them. The ti.e for ethics passed whem they turned tail and ran
word is the Big-12 might be interested in the network and the IP, plus the future NCAA credits (bball payments) could be a something to help finance WSU and OSU into the conference.
Kinda like skipping out on the conference?
Or like saying ,”Why don’t you take everyone but WSU and OSU”? Don’t see how that would cause hard feelings. F’em.
Last edited:
Hate to burst the bubble but not a single team has given notice of withdrawal. They've only announced that post 8/1/24 they will be in a new conference. They are all playing it out to completion of the terms.
They’ve all provided notice. The bylaws don’t specify that it must be written. They’ve all accepted invitations from other conferences, they’ve all notified the other members they’re leaving, and it’s public. Oh, and their representatives have pulled out of the CEO group. UO and UW provided notice ahead of the Friday meeting, and their reps didn’t show.
The date of their departure is irrelevant. By announcing their departure, under the language of the bylaws, they’re in breach.
Plain and simple terms for you...if they had withdrawn they would not be playing in the pac 12 this year. 8/2/24 to join big 10 (or whatever conference teams may be joining) was selected for a very specific legal reason.
Again, the date they leave the PAC and join another conference is completely irrelevant. The bylaws specify they can’t provide notice of departure before August 1, 2024. They’ve violated that, and the conference can retain their 2023-24 shares, they don’t have rights to conference assets, and they no longer get a voice in decisions.
That's definitely wrong as no one has withdrawn from the conference as the conference is still together for this season and will be through 7/31/24. Hold on to hope though for that magical 1/4-1/2 share.
You clearly haven’t read the documents. And you’re clearly here just to stir up shit anyway. Be gone.
There is no withdrawal so nothing to notify of. If you want to call it notice of going to let things expire that would be accurate.
And if you read them you obviously don't understand them. Apply just a hair bit of logic...or don't. It will all play out in the end.
The teams don't have to stop playing, rip up the 2023 schedule in order to WITHDRAWN or be considered WITHDRAWN.
According to the the legal text of the contract, all they have to do to WITHDRAW, be WITHDRAWN, is to provide PUBLIC NOTICE OF ANY KIND THAT THEY INTEND TO AND ARE GOING TO WITHDRAW, AND HAVE ACCEPTED A INVITE TO ANOTHER CONFERENCE, AND THAT THEY ARE WITHDRAWING, WITHDRAWN FROM PAC 12.
The moment they do that, they are legally considered to have given official public notice of withdrawal, no matter if they play the next 50 years in PAC 12 or not.
They OFFICIALLY PUBLICALLY ANNOUNCED IT.
And the second they do that according to the contract, agreement, etc, THEY LOSE ALL RIGHTS, BENEFITS, ETC, DUE CONFERENCE MEMBERS IRREGARDLESS OF WHETHER THEY SPEND THE NEXT 100 YEARS PLAYING A PAC SCHEDULE.
They have announced, the only reason they are playing a PAC schedule instead of a Big 10, Big 12 schedule, is that if they didn't play a PAC schedule, they wouldn't be able to play any games, because their new conferences haven't scheduled them in yet.
Now you might say then why would they and the PAC play out a PAC schedule then
They all still play a schedule because it's a win win if they do.
The departing teams get to play games, a win for them. And the teams that staying get to play for a possible CFP, etc, a win for them. That's why they are still playing a PAC schedule.
Then playing a PAC schedule, does NOT MEAN THAT THEY HAVE NOT GIVEN OFFICIAL PUBLIC ANNOUNCEMENT OF NOTICE THAT THEY ARE LEAVING, HAVE LEFT, HAVE ACCEPTED OTHER CONFERENCE INVITES TO JOIN THEIR CONFERENCE, AND DOES NOT MEAN THAT THEY HAVE NOT GIVEN NOTICE AND THUS LOST ALL BENEFITS, RIGHTS, MEMBERSHIP, ETC, ACCORDING TO THE PAC RULES, ETC.
THE RULES ARE BLACK AND WHITE, SAY THAT IF YOU ANNOUNCE, GIVE PUBLIC NOTICE THAT LEAVING PAC, ETC, THAT YOU IMMEDIATELY LOSE ALL RIGHTS, BENEFITS OF MEMBERSHIP, ETC.
