P12 Hoops 23/24

[glduck]

On 12/16/2023 at 10:29 AM, KUGRDON said:

I have a hard time seeing the $420 million not distributed. It’s possible each share is less than a standard year to make up the difference from the Comcast issue. That’s fine, that was a Pac-12 issue, not a Pac-2 issue.

Board control and future assets should always have been awarded to the remaining two. I don’t know exactly what makes up that $170 million figure — we’ve all been wondering what the conference/P12N infrastructure looks like, perhaps that’s it — and that should absolutely stay with the remaining two. That’s keep-the-lights on money. 

[utenation]

#6 Baylor getting smoked by a 4-5 Michigan State team. Yikes

[KUGRDON]

On 12/16/2023 at 12:31 PM, glduck said:

I have a hard time seeing the $420 million not distributed. It’s possible each share is less than a standard year to make up the difference from the Comcast issue. That’s fine, that was a Pac-12 issue, not a Pac-2 issue.

Board control and future assets should always have been awarded to the remaining two. I don’t know exactly what makes up that $170 million figure — we’ve all been wondering what the conference/P12N infrastructure looks like, perhaps that’s it — and that should absolutely stay with the remaining two. That’s keep-the-lights on money. 

The PAC 12 is a named defendant in a lawsuit where the contingent liabilities exceed $170 million.  Hell, they exceed $670 million.

https://www.espn.com/college-sports/story/_/id/38811591/ncaa-face-billions-damages-judge-ruling-house-vs-ncaa-case

[utenation]

Not a good day for the P12 in hoops.  
 

AZ, UCLA and WSU all go down. ASU and Cal likely to go down tonight too. 
 

Utah with a win over a cupcake. Nothing special. 

[KUGRDON]

On 12/16/2023 at 12:31 PM, glduck said:

I have a hard time seeing the $420 million not distributed. It’s possible each share is less than a standard year to make up the difference from the Comcast issue. That’s fine, that was a Pac-12 issue, not a Pac-2 issue.

Board control and future assets should always have been awarded to the remaining two. I don’t know exactly what makes up that $170 million figure — we’ve all been wondering what the conference/P12N infrastructure looks like, perhaps that’s it — and that should absolutely stay with the remaining two. That’s keep-the-lights on money. 

My take. The board of Directors has a fiduciary duty to act in the best interest of the conference and its current members.  They would breach duty by paying more than they legally required to pay to the departed.  The amount they are legally obligated to pay the departed is difficult to discern and it may be $0.  One has to remember the special circumstances the conference faces in connection with expansion.  It may have to pay buy outs for teams to leave the MWC.  I would bet this gets settled and that the distribution to the departed is significantly less than a normal annual distribution.

[row Z]

On 12/16/2023 at 6:18 PM, KUGRDON said:

My take. The board of Directors has a fiduciary duty to act in the best interest of the conference and its current members.  They would breach duty by paying more than they legally required to pay to the departed.  The amount they are legally obligated to pay the departed is difficult to discern and it may be $0.  One has to remember the special circumstances the conference faces in connection with expansion.  It may have to pay buy outs for teams to leave the MWC.  I would bet this gets settled and that the distribution to the departed is significantly less than a normal annual distribution.

I agree with your summary, except for the bolded part. The schools that "left" the Pac12 were members in good standing when all of this revenue was earned. In fact, the 10 schools likely had a disproportionate impact on the amount of those earnings. In my view, the rights of the former members were not extinguished as a result of their decision not to renew membership. Rather, they have earned their payouts and did not legally relinquish their rights to those payouts. 

Of course, i say all this without have read a word of any Pac12 charter or related document. But, any membership agreement or partnership agreement would ordinarily have provisions that fairly allocate compensation to departing members. It would be a really unusual, and inequitable, result for the departing members to get nothing of the revenue they helped earn. That would be a windfall for WSU and OSU.

[KUGRDON]

On 12/18/2023 at 12:13 PM, row Z said:

I agree with your summary, except for the bolded part. The schools that "left" the Pac12 were members in good standing when all of this revenue was earned. In fact, the 10 schools likely had a disproportionate impact on the amount of those earnings. In my view, the rights of the former members were not extinguished as a result of their decision not to renew membership. Rather, they have earned their payouts and did not legally relinquish their rights to those payouts. 

Of course, i say all this without have read a word of any Pac12 charter or related document. But, any membership agreement or partnership agreement would ordinarily have provisions that fairly allocate compensation to departing members. It would be a really unusual, and inequitable, result for the departing members to get nothing of the revenue they helped earn. That would be a windfall for WSU and OSU.

1.  I haven’t seen the documents, but find it hard to believe the Supreme Court would have ruled the way it did if there was a contractual right to a pro data distribution.

2.  It appears that the best argument The Departed can make is an equitable argument such as you laid out.  Of course, when making an equitable argument there are always countervailing equitable arguments.  First, the money that stays in the conference belongs to the conference not to WSU and OSU.  The actions of The Departed were hostile to the conference, so hostile as to be an existential threat. Equitable arguments are a hard sell when the person seeking equitable relief tried to kill the other party.  Moreover, all of those funds may be necessary to keep the conference alive.

3.  The revenue in the hands of the conference, by contract, is earned by and is payable to the conference.  It is not automatically payable to current or former members.  In normal times, distributions were made because that was what was in the best interest of the conference.  Keeping the member institutions financially viable was in the interests of the conference.  Now, the conference gets no benefit from making distributions to The Departed.  This is why I said that it may turn out that The Departed are entitled $0 distributions.

I haven’t read all the documents and like you I am throwing out ideas as to how this may all turn out. Just let us remember that in the height of the glory days of the Chicago Bulls, Scottie Pippen was the 122nd highest paid player.  That wasn’t fair but that’s how the contracts read.  The Departed forgot to read the contracts before they walked out the door.

 

[EastCoastFan]

On 12/18/2023 at 7:26 PM, KUGRDON said:

I haven’t seen the documents, but find it hard to believe the Supreme Court would have ruled the way it did if there was a contractual right to a pro data distribution.

Lots of schools have left conferences.  None of them ever got gold watches when they left.  When you choose to leave, any revenue still coming into the conference after you're gone stays with the conference, and doesn't get mailed out to the missing school.

The issue isn't things like the Pac-12 network, for what it's worth, or the delayed distributioin of NCAA tourney money.   That money still stays in the conference, even if there are only two members.  The issue is the media money that will be arriving before the ten departures.  On that, minus any conference debts that can be paid now, the ten departing schools will clearly have a right to distribution.

[row Z]

On 12/18/2023 at 4:26 PM, KUGRDON said:

3.  The revenue in the hands of the conference, by contract, is earned by and is payable to the conference.  It is not automatically payable to current or former members.  In normal times, distributions were made because that was what was in the best interest of the conference.  Keeping the member institutions financially viable was in the interests of the conference.  Now, the conference gets no benefit from making distributions to The Departed.  This is why I said that it may turn out that The Departed are entitled $0 distributions.

 

I would hope that whatever the controlling conference document is addresses this point, and has detailed provisions about what is owed to outgoing members and incoming new members, and at what time. It does not have to be, nor should it be in my view, an all or nothing calculation determined as of the date that a member gives notice that they will not continue in the Pac12. That would be too harsh and inequitable. 

I also suspect the remaining conference members in charge of the Pac2 have a duty to act reasonably toward the 10 schools that will be leaving (but have not left yet), at least through the dates that those schools remain in the Pac12.  

[Orange]

On 12/19/2023 at 12:21 PM, row Z said:

I would hope that whatever the controlling conference document is addresses this point, and has detailed provisions about what is owed to outgoing members and incoming new members, and at what time. It does not have to be, nor should it be in my view, an all or nothing calculation determined as of the date that a member gives notice that they will not continue in the Pac12. That would be too harsh and inequitable. 

I also suspect the remaining conference members in charge of the Pac2 have a duty to act reasonably toward the 10 schools that will be leaving (but have not left yet), at least through the dates that those schools remain in the Pac12.  

Reasonableness could be met with a promise to return and reconstitute the pac-12/10/8.   ¯\_(ツ)_/¯ 

[row Z]

On 12/19/2023 at 1:12 PM, Orange said:

Reasonableness could be met with a promise to return and reconstitute the pac-12/10/8.   ¯\_(ツ)_/¯ 

Hey, i would not be upset if that happened. I think it could potentially happen in the near/intermediate term for all sports other than football, if we listen to Chip Kelly's future vision of college football. 

 

[KUGRDON]

Stanford and Cal thinking WTF

[glduck]

Not the result I was hoping for, but Arizona/FAU was a great game.

[MrBug708]

Took my kid to his first UCLA basketball game this past week, vs Northridge. I told him the loss is just part of being a UCLA fan.

[utenation]

@KUGRDON, weren’t you bragging about WSU’s net ranking early in the season as WSU was baking cupcake after cupcake in OOC?  Live by the cupcake schedule and die by it too. 
 

Looks like WSU didn’t have an oven big enough to beat the Utes.  A 22 point loss will leave a mark. 

[utenation]

@Chile_Ute, our win over Wake Forest is turning out to be a good win. Likely another Quad 1 win.  WF smashed a good VT team(47 net) today by 23. 
 

WF has won 7 in a row. St. John’s is now a Quad 1 game too. Our only two losses are to Quad 1 teams. 

[Chile_Ute]

On 12/30/2023 at 1:56 PM, utenation said:

@Chile_Ute, our win over Wake Forest is turning out to be a good win. Likely another Quad 1 win.  WF smashed a good VT team(47 net) today by 23. 
 

WF has won 7 in a row. St. John’s is now a Quad 1 game too. Our only two losses are to Quad 1 teams. 

Pleasantly surprised at this point but guarded.

[utenation]

AZ. Ooof. Getting thumped by a 5-6 Stanford team. 

[Chile_Ute]

If you told me Utah would be 11-2 at this point I’d have eaten my hat

[dtd]

Like I keep telling everyone the last few rough years, have faith in Dana! What a coach!

Ahem.