David Hale: ACC exploring WVU, SMU, UO/UW for possible expansion

[cashisking884]

Why not? Contracts have clauses in them all the time and it's not unusual for there to be financial obligations until the contract ends. Your bank isn't letting you out of your CD without the penalties you agreed to.

Those aren’t “penalties” whose purpose is to stop you from breaching. They are suppose to be reasonably calculated damages.

You cannot have punitive damage clauses in a contract. That’s one of the tests of a liquidated damages clause.

If one party wants to breach, they breach. They then put you back into the position you would have been in had they not breached. And everybody goes about their way.

For an LD clause to hold up in court, you have to show:

1. The damages will be too difficult to calculate.
2. The LD amount is a reasonable amount and good faith attempt to put a number on something that’s too difficult to calculate.

“breaching ACC school must turn over everything for the life on the contract” is maybe reasonable.
But it’s also not going to be the easiest thing to defend in court. Especially since it’s not a dollar amount, but a specific performance. And specific performance, outside of real property, is as a default matter illegal in contract law in every jurisdiction in the US. You go into court spotting the other side points that you must overcome.

 

[WillyDavis33]

If it actually comes down to the contract they would lose.

They want to make things so bad that the conference or ESPN agrees to let them out of the contract for much less than what it says (or nothing).

They are doing their part with on field play!

 

[The Ole Six-Fiver]

Probably not going to be that easy and it could do a lot of damage to themselves.

I would think so as well, but that certainly looks to be what they’re doing.

If I were one of those big 2 conferences I would not touch FSU for sure after how they’ve acted; after all why wouldn’t they act out just as badly in THOSE conferences when (not if) they’d feel begrudged?

UNC and Clemson and the others seem to be happily sitting back and letting FSU do the dirty work, hoping to reap the possible benefits with none of the ugliness. But they’re all ugly. I would consider them guilty by association by not controlling FSU.

But there is no honor…or memory…among thieves. And those schools have value. That’s the bottom line. Nobody would want PSU on moral merit either. But there they remain in the Big Ten,

 

[cashisking884]

Not a lawyer so forgive me if this sounds simplistic. But there are 3 parties involved. FSU, ACC, ESPN. If the exit fee is the LD to the ACC and you say there cant be 2 LD clauses, why couldn't there be a LD protection for ESPN (the GOR). The GOR protects the ESPN investment. They are buying home games for 14 teams, more than they are buying ACC football.

1. It’s not my argument. I don’t even think of it. I had a completely different LD argument. But, based on the summary from the person who read the Harvard journal (that’s no longer available), that’s apparently the Harvard argument.

The argument would be that ESPN is not a party to the ACC-member schools contract.

 

[JJ COLLINS]

I think it is perfectly clear to everyone that if there was a way out of the "contract" or "agreement" signed by the ACC members, FSU would be long gone. ESPN, Sports Illustrated have done numerous articles on this topic interviewing the best known and respected lawyers in this field , every single one of them said there is no way out without paying the agreed upon exit fee. They are not going anywhere til it all gets blown up in a few years.

 

[cashisking884]

Here’s the first thing that comes up when you google “standard of review for liquidated damages clause.”

https://www.bracheichler.com/wp-content/uploads/2021/10/Quarterly-Advisor-Issue-3-2021.pdf

Oddly enough, skimming through it, I don’t see the actual standard. But the two prong test I wrote earlier is it. But this is the important part:

LD clauses are presumptively valid “as long as the amount is fixed and the damages amount is reasonable in light of the harm caused by the breach. Courts will not enforce damages provisions that are so large as to result in a penalty, as penalty clauses are not enforceable…”

This was the problem with the Big East Exit fee, and why the Big East settled the lawsuits.

And if anybody can actually read the GOR and say, “yeah, that’s 100% not a penalty clause. It’s fair and reasonable attempt to put a number to something that is too hard to put a number to,” then you’re lying to yourself.

 

[cashisking884]

I think it is perfectly clear to everyone that if there was a way out of the "contract" or "agreement" signed by the ACC members, FSU would be long gone. ESPN, Sports Illustrated have done numerous articles on this topic interviewing the best known and respected lawyers in this field , every single one of them said there is no way out without paying the agreed upon exit fee. They are not going anywhere til it all gets blown up in a few years.

That’s not true. Because of the financial consequences if you’re wrong.

It’s not that there isn’t an argument to survive an MSJ. It’s that you can’t be 100% certain that you will survive it, because the arguments against you are strong as well. And not surviving it is basically the death of your program.

 

[The Ole Six-Fiver]

I think it is perfectly clear to everyone that if there was a way out of the "contract" or "agreement" signed by the ACC members, FSU would be long gone. ESPN, Sports Illustrated have done numerous articles on this topic interviewing the best known and respected lawyers in this field , every single one of them said there is no way out without paying the agreed upon exit fee. They are not going anywhere til it all gets blown up in a few years.

There isn’t a way out of it, or all of them, especially FSU, would have exercised it by now; after all, as they’ve repeatedly said loudly and belligerently, the ACC is so terrible, right? So if there was a legal way out of the contract without having to pay in full, they’d have been gone by now.

Without that avenue, they are using FSU as their public stooge to make things so bad that the conference and/or ESPN cry uncle and let them out of it at diminished or no cost.

I wouldn’t do it, I’d let them act as ridiculous and petulant as they wished to be, right up to Dec 31 2036 or whenever the deal ends. But they figure, probably accurately, that ESPN won’t let it go nearly that long.

 

[pittdan77]

Those aren’t “penalties” whose purpose is to stop you from breaching. They are suppose to be reasonably calculated damages.

You cannot have punitive damage clauses in a contract. That’s one of the tests of a liquidated damages clause.

If one party wants to breach, they breach. They then put you back into the position you would have been in had they not breached. And everybody goes about their way.

For an LD clause to hold up in court, you have to show:

1. The damages will be too difficult to calculate.
2. The LD amount is a reasonable amount and good faith attempt to put a number on something that’s too difficult to calculate.

“breaching ACC school must turn over everything for the life on the contract” is maybe reasonable.
But it’s also not going to be the easiest thing to defend in court. Especially since it’s not a dollar amount, but a specific performance. And specific performance, outside of real property, is as a default matter illegal in contract law in every jurisdiction in the US. You go into court spotting the other side points that you must overcome.

Just to be clear, we're referring to the exit fees that are written into the conference bylaws. The GOR only conveys control of media rights so I'm assuming you're trying to argue the loss of value as damages or something as punitive?

And it wouldn't be on the ACC to prove the GOR is binding. It would be up to FSU to prove why it isn't.

 

[pittdan77]

I would think so as well, but that certainly looks to be what they’re doing.

If I were one of those big 2 conferences I would not touch FSU for sure after how they’ve acted; after all why wouldn’t they act out just as badly in THOSE conferences when (not if) they’d feel begrudged?

UNC and Clemson and the others seem to be happily sitting back and letting FSU do the dirty work, hoping to reap the possible benefits with none of the ugliness. But they’re all ugly. I would consider them guilty by association by not controlling FSU.

But there is no honor…or memory…among thieves. And those schools have value. That’s the bottom line. Nobody would want PSU on moral merit either. But there they remain in the Big Ten,

Honestly, I just think that certain people in leadership positions are having a hissy fit.

 

[PittPharm2002]

I dont believe that the B10 wouldn't invite them tomorrow if they left and agreed to a $0 B10 TV share if they couldn't get their rights back. I think you are right in that they dont want to risk going without TV revenue but why? Cut some sports, make some other cuts, and go join the B10 or SEC for free for 12 years. And they do get SOME revenue. They have their own sponsorships, ticket sales, radio deals, CFP revenue, NCAAT revenue. They can beat Indiana and Rutgers without TV revenue.

You can pretend that .
But there is no offer currently nor will there be - because the BIG doesn’t want them without their tv revenue .
And FSU would die without tv revenue. They don’t have smu and Stanford level boosters
See how that works ?

 

[PittPharm2002]

If the B10 or SEC pay them $0, why would they care if they bring their TV rights?

Backwards -
Why would FSU leave the ACC to make $0 in tv revenue for 12 years ?
So in your world FSU should pay the $51mil exit fee to earn $0 in tv revenue for 12 years -
Just to say “ha! We joined a new conference !”

Idiotic thinking

 

[Baddest Cat]

Does the "Big 2" actually care about FSU? What makes FSU more valuable than Oregon and Washington who agreed to jump for less-than-ACC money? Is FSU more valuable than Clemson? North Carolina?

 

[cashisking884]

Just to be clear, we're referring to the exit fees that are written into the conference bylaws. The GOR only conveys control of media rights so I'm assuming you're trying to argue the loss of value as damages or something as punitive?

And it wouldn't be on the ACC to prove the GOR is binding. It would be up to FSU to prove why it isn't.

I’m arguing that there is an argument that turning over your GOR is specific performance, when instead stroking a check for a fairly easily determinable amount would be sufficient to put the ACC back in the economic position it would have been in had FSU not breached.

And therefore it fails the test as a proper LD clause.

And that the loss of media rights is so draconian and out of sync with the actual economic damage to the ACC, that it can only be a punitive damage clause.

And that’s not entirely true in terms of burden of proof. The threshold isn’t reasonable doubt anyway.

Remember, all FSU would have to show is , if all facts it alleged would decided in favor of them, is there a “scintilla of evidence” to its legal arguments. If it can do that, it survives the MSJ. And if FSU’s case was actually going to trial, and not getting thrown out as a matter of law, the ACC is striking a deal.

And that wouldn’t be true of the specific performance anyway. Specific performance is generally only favored in real property cases. All FSU has to do is show this is specific performance, which can’t be disputed, and the burden shifts to the ACC to show why it should be accepted in this case, since this isn’t a land case.

 

[pittdan77]

I’m arguing that there is an argument that turning over your GOR is specific performance, when instead stroking a check for a fairly easily determinable amount would be sufficient to put the ACC back in the economic position it would have been in had FSU not breached.

And therefore it fails the test as a proper LD clause.

And that the loss of media rights is so draconian and out of sync with the actual economic damage to the ACC, that it can only be a punitive damage clause.

And that’s not entirely true in terms of burden of proof. The threshold isn’t reasonable doubt anyway.

Remember, all FSU would have to show is , if all facts it alleged would decided in favor of them, is there a “scintilla of evidence” to its legal arguments. If it can do that, it survives the MSJ. And if FSU’s case was actually going to trial, and not getting thrown out as a matter of law, the ACC is striking a deal.

And that wouldn’t be true of the specific performance anyway. Specific performance is generally only favored in real property cases. All FSU has to do is show this is specific performance, which can’t be disputed, and the burden shifts to the ACC to show why it should be accepted in this case, since this isn’t a land case.

And like I said before, if it's that simple, what the heck are they waiting on? This should have taken five minutes to file and had the ACC begging FSU to give back something on their way out the door.

 

[topdecktiger]

I’m arguing that there is an argument that turning over your GOR is specific performance, when instead stroking a check for a fairly easily determinable amount would be sufficient to put the ACC back in the economic position it would have been in had FSU not breached.

And therefore it fails the test as a proper LD clause.

And that the loss of media rights is so draconian and out of sync with the actual economic damage to the ACC, that it can only be a punitive damage clause.

And that’s not entirely true in terms of burden of proof. The threshold isn’t reasonable doubt anyway.

Remember, all FSU would have to show is , if all facts it alleged would decided in favor of them, is there a “scintilla of evidence” to its legal arguments. If it can do that, it survives the MSJ. And if FSU’s case was actually going to trial, and not getting thrown out as a matter of law, the ACC is striking a deal.

And that wouldn’t be true of the specific performance anyway. Specific performance is generally only favored in real property cases. All FSU has to do is show this is specific performance, which can’t be disputed, and the burden shifts to the ACC to show why it should be accepted in this case, since this isn’t a land case.

You're just making up stuff, honestly. I get that you looked up something online, but you twisting thus around waaaaay to much. It's not that complicated. A GOR isn't something brand new. It's been around for decades. It's used in the movie industry, the music industry, the publishing industry. The point isn't that it's "impossible" to get out of. The problem is that you can't get out without having to pay A LOT of money, to the point where it's cost-prohibitive.

 

[cashisking884]

And like I said before, if it's that simple, what the heck are they waiting on? This should have taken five minutes to file and had the ACC begging FSU to give back something on their way out the door.

Because it’s still not some 100% legal lock. There’s arguments. But there’s always arguments.

When I sue for premises liability, which is always the most dicey legal area in personal injury, the question is always, “do we have an argument that could maybe survive the notice requirement on a pre-trial motion?” That’s the threshold question. Not “will we.” But, “is it possible?”

If the Court hit me with all the attorney fees if I couldn’t, then that threshold question would become a hell of a lot more demanding. And I’d be way more hesitant and scared to file on premises cases.

The problem for any ACC school is it’s just not enough to answer, “can we.” Because the consequences are dire if you don’t.

I’ve said over and over again that I get the legal arguments against invalidating the GOR. They have a ton of merit. They could very easily win. I haven’t tried to argue anything except the other side’s argument aren’t so crazy either. To the point I was able to find a Harvard law journal making some of them and then some.

But the uncertainty would scare the hell out of you if you’re any ACC school. Because no lawyer is going to tell you, “don’t worry, it’s a lock.”

 

[topdecktiger]

But the uncertainty would scare the hell out of you if you’re any ACC school. Because no lawyer is going to tell you, “don’t worry, it’s a lock.”

Which is the entire point of the GOR.

 

[topdecktiger]

But the uncertainty would scare the hell out of you if you’re any ACC school. Because no lawyer is going to tell you, “don’t worry, it’s a lock.”

Which is the entire point of the GOR.

 

[pittdan77]

Because it’s still not some 100% legal lock.

LOL, no, it certainly is not, but it doesn't have to be anywhere close to that to move the conference towards a settlement. It would still be insanity to be sitting on their hands if your position is even close to being plausible.

 

[pittdan77]

Which is the entire point of the GOR.

If it was 50/50, FSU should move forward because any chance at all that the GOR is thrown out in court is disaster for the ACC and they would be happy to settle. Nobody is taking that kind of chance and would at least set a new value on leaving.

 

[Gunga_Galunga]

I think it's a settlement no matter what and it will never make it to a judgement. There's too much to lose on both sides.

The question is where do they settle. I'm not naive enough to think the ACC is going to stick to 100% of what they think they're entitled to. However, I also think the settlement would be closer to full value than 50%. FSU can't afford that with 12/13 years left, which is why they're all talk an no action.

 

[ThePanthers]

Presidents to meet tomorrow morning about Cal, Stanford and SMU.