Lets discuss what the contract actually says.
Section 3
3.1 "The Grant of Rights Agreement which will remain in full force and effect as to such Withdrawing Member and the Withdrawing Member shall continue to be fully bound under the Grant of Rights Agreement after Withdrawal for the remainder of the term of any Grant of Rights Agreement as if it remained a Member of the Conference, but the Withdrawing Member shall not be entitled to payment of any amounts or any other benefits arising under the Grant of Rights Agreement after Withdrawal."
This is the key issue and the reason that the Big 12 is supposed to last for the duration of the Grant of Rights agreement. The Big 12 owns their 1st and 2nd Tier rights until June 2025.
Notice Date and Interim Period. The “Notice Date” of the Withdrawal shall be the date of the occurrence of the event that causes the Withdrawal under Section 3.2 above. The “Effective Date” of the Withdrawal shall be the June 30 that next follows the end of the period that is 18 full calendar months following the Notice Date, unless an earlier date is established by a Supermajority of Disinterested Directors in its sole discretion. The period from the Notice Date to the Effective Date is referred to herein as the “Interim Period.
The Longhorns and Sooners shouldn't have openly acknowledged anything until they were 18 months out from joining the SEC. Now they are non members but still stuck with Grant of Rights until 2025. The 18 Full Calendar months doesn't even allow them to legally switch in 2022. I don't think their plan was ever to switch in 2022 maybe 23 but probably 24 or 25. They didn't give notice quick enough for 22.
Any Withdrawing Member shall pay to the Conference a commitment buyout fee (the “Buyout Amount”) in an amount equal to the sum of the amount of distributions that otherwise would be paid to the Member during the final two years of
its membership in the Conference. The Withdrawing Member shall be deemed to have agreed to forfeit all distributions of any type that otherwise would have been made to the Withdrawing Member during the Interim Period (the “Distribution Withholding”) and the Conference shall not pay the Distribution Withholding to the Withdrawing Member. A Withdrawing Member agrees to pay to the Conference the amount by which the Buyout Amount exceeds the Distribution Withholding, with such payment to be made not later than the Effective Date. In addition,
The Withdrawing member forfeits all distributions of any type during Interim Period. So Essentially the withdrawing members owe 2 years of Big 12 distributions which is around the $80 million everyone is talking about. The Big 12 would withhold payment to OU and Texas until 2 years of pay was withheld. I believe this would be enough to prevent the early exit of OU and Texas but there is still more.
then the Members agree that such actions, in breach of the Withdrawing Member’s agreements in these Bylaws, cause additional damage to the Conference and therefore that the Buyout Amount shall be increased by, and shall also include, and the Withdrawing Member shall be obligated to pay to the Conference immediately upon the occurrence of any of the foregoing events, the amount of all actual loss, damage, costs, or expenses whatsoever (including but not limited to lost revenues, damage to reputation and public image, and damage to relationships with related parties) incurred by the Conference or any of its remaining Members directly or indirectly related to that challenge or opposition, whether economic or otherwise
It is clear to me that this language would be the immediate reduction of the Big 12 TV contract. The Buyout of approximately 80 million would be increased by every dollar that we lose from the networks. The Big 12 was never worried about the TV contracts because the financial loss would be liable to the defecting school
My position still stands that OU and Texas are going to leave later and not 22. It is way too expensive. Both schools made budget cuts during Covid and the SEC standard payout will not make them whole for a while. I think that their public statement of joining the SEC in 2025 is actually what will probably happen. Maybe the Big 12 will negotiate a settlement a little bit earlier but I see no reason for the Big 12 to settle.
Section 3
3.1 "The Grant of Rights Agreement which will remain in full force and effect as to such Withdrawing Member and the Withdrawing Member shall continue to be fully bound under the Grant of Rights Agreement after Withdrawal for the remainder of the term of any Grant of Rights Agreement as if it remained a Member of the Conference, but the Withdrawing Member shall not be entitled to payment of any amounts or any other benefits arising under the Grant of Rights Agreement after Withdrawal."
This is the key issue and the reason that the Big 12 is supposed to last for the duration of the Grant of Rights agreement. The Big 12 owns their 1st and 2nd Tier rights until June 2025.
Notice Date and Interim Period. The “Notice Date” of the Withdrawal shall be the date of the occurrence of the event that causes the Withdrawal under Section 3.2 above. The “Effective Date” of the Withdrawal shall be the June 30 that next follows the end of the period that is 18 full calendar months following the Notice Date, unless an earlier date is established by a Supermajority of Disinterested Directors in its sole discretion. The period from the Notice Date to the Effective Date is referred to herein as the “Interim Period.
The Longhorns and Sooners shouldn't have openly acknowledged anything until they were 18 months out from joining the SEC. Now they are non members but still stuck with Grant of Rights until 2025. The 18 Full Calendar months doesn't even allow them to legally switch in 2022. I don't think their plan was ever to switch in 2022 maybe 23 but probably 24 or 25. They didn't give notice quick enough for 22.
Any Withdrawing Member shall pay to the Conference a commitment buyout fee (the “Buyout Amount”) in an amount equal to the sum of the amount of distributions that otherwise would be paid to the Member during the final two years of
its membership in the Conference. The Withdrawing Member shall be deemed to have agreed to forfeit all distributions of any type that otherwise would have been made to the Withdrawing Member during the Interim Period (the “Distribution Withholding”) and the Conference shall not pay the Distribution Withholding to the Withdrawing Member. A Withdrawing Member agrees to pay to the Conference the amount by which the Buyout Amount exceeds the Distribution Withholding, with such payment to be made not later than the Effective Date. In addition,
The Withdrawing member forfeits all distributions of any type during Interim Period. So Essentially the withdrawing members owe 2 years of Big 12 distributions which is around the $80 million everyone is talking about. The Big 12 would withhold payment to OU and Texas until 2 years of pay was withheld. I believe this would be enough to prevent the early exit of OU and Texas but there is still more.
then the Members agree that such actions, in breach of the Withdrawing Member’s agreements in these Bylaws, cause additional damage to the Conference and therefore that the Buyout Amount shall be increased by, and shall also include, and the Withdrawing Member shall be obligated to pay to the Conference immediately upon the occurrence of any of the foregoing events, the amount of all actual loss, damage, costs, or expenses whatsoever (including but not limited to lost revenues, damage to reputation and public image, and damage to relationships with related parties) incurred by the Conference or any of its remaining Members directly or indirectly related to that challenge or opposition, whether economic or otherwise
It is clear to me that this language would be the immediate reduction of the Big 12 TV contract. The Buyout of approximately 80 million would be increased by every dollar that we lose from the networks. The Big 12 was never worried about the TV contracts because the financial loss would be liable to the defecting school
My position still stands that OU and Texas are going to leave later and not 22. It is way too expensive. Both schools made budget cuts during Covid and the SEC standard payout will not make them whole for a while. I think that their public statement of joining the SEC in 2025 is actually what will probably happen. Maybe the Big 12 will negotiate a settlement a little bit earlier but I see no reason for the Big 12 to settle.
