Exit negotiations stagnant between Oklahoma, Texas and the Big 12

October 21, 2021
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SicEm365’s David Smoak shares updated information regarding the status of the departure from the Big 12 by the University of Oklahoma and the University of Texas for the SEC and where there are legal hangups with the move.

Highlights From The Conversation

  • Regardless if Oklahoma and Texas fulfill required time in the Big 12 through the end of the Grant of Rights in 2025, the two universities will still be required pay exit fees of $80 million each
     
  • The Grant of Rights is a separate entity financially outside of the exit fees as part of being in the Big 12.
     
  • Though the Big 12’s hope is that Oklahoma and Texas would leave the league by the summer of 2023, the two depating universities have yet to file the 27-month exit timeline to begin process of leaving to join SEC.
     
  • The $80 million per university in exit fees can still be negotiated, but as of this time it is not being negotiated.
     
  • If there are any delays or fighting of exit fees from Texas or Oklahoma, Big 12 commissioner Bob Bowlsby has right to add additional fees on top of the original fees. It’s believed that there will be additional penalties added.
     
  • There are three processes that can be utilized to settle on the Grant of Rights: The Big 12 can sell the GOR back to Oklahoma and Texas, retain the GOR or let the two universities walk to the SEC.
     
  • If the Big 12 elects to retain the GOR and Oklahoma and Texas make the move to the SEC, all money accumulated in television revenue by the two universities would be distributed to the Big 12.
  • If Oklahoma and Texas make the departure of the Big 12 ugly and drags out legally, the $80 million exit will be a minor part of what will eventually be paid by the two universities.

Discussion from...

Exit negotiations stagnant between Oklahoma, Texas and the Big 12

15,527 Views | 57 Replies | Last: 2 yr ago by bear2be2
Oso del lago
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They can solve this on many different levels if they take Us TT, OSU and someone else. We will stab everyone else in the back and help out legislatively in state. There, that takes care of everything. Let isu and tcu welcome the boise st and usf to the conference.
Robert Wilson
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Big-O!-Bear said:

They can solve this on many different levels if they take Us TT, OSU and someone else. We will stab everyone else in the back and help out legislatively in state. There, that takes care of everything. Let isu and tcu welcome the boise st and usf to the conference.


Stop it. You sound pathetic.
RegentCoverup
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Aliceinbubbleland said:

Quote:

1) it's in the hands of Big12s external legal counsel, so they likely just get an update across the board to all members. Which is to say that Bowlsby can't f it up. Basically it's a group email at this point.

I don't trust him. I hope the legal counsel you speak of has access to Bowlsby's phone calls from OUT. No telling what those two might offer the ****** to grease skids.
Oh, I don't either.

I'm just saying he hasn't a lot of authority on this. The members are going to manage it collectively.

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Oso del lago
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Robert Wilson said:

Big-O!-Bear said:

They can solve this on many different levels if they take Us TT, OSU and someone else. We will stab everyone else in the back and help out legislatively in state. There, that takes care of everything. Let isu and tcu welcome the boise st and usf to the conference.


Stop it. You sound pathetic.


I can tell a lot of things go over your head. Ouut will get out relatively scott free. Just like every other program that left. You will know this a fact when the message board insiders start trying to sell it to their prospective fans. The thoughts of turning the screws on Ouut is as outrageous as then taking us to the sec.

Sorry I had to spell that out for you. Have a great night and remember, safety first.
bear2be2
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Big-O!-Bear said:

Robert Wilson said:

Big-O!-Bear said:

They can solve this on many different levels if they take Us TT, OSU and someone else. We will stab everyone else in the back and help out legislatively in state. There, that takes care of everything. Let isu and tcu welcome the boise st and usf to the conference.


Stop it. You sound pathetic.


I can tell a lot of things go over your head. Ouut will get out relatively scott free. Just like every other program that left. You will know this a fact when the message board insiders start trying to sell it to their prospective fans. The thoughts of turning the screws on Ouut is as outrageous as then taking us to the sec.

Sorry I had to spell that out for you. Have a great night and remember, safety first.
Contracts are binding. OUT will absolutely not get out scot free. This GoR deal has teeth. It was written and agreed with the survival of the Big 12 in mind. The exit penalties here are explicit, and the conference has no reason or incentive whatsoever to bend or negotiate those down. If Texas or Oklahoma wants to call that bluff, let them. It will just be adding legal fees to their exit fees, and motivate the Big 12 to play hardball with their TV rights.
Oso del lago
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Just watch there will be some network carrot dangled at an opportune time
bear2be2
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Big-O!-Bear said:

Just watch there will be some network carrot dangled at an opportune time
If that network carrot equals all or most of the $160 million owed, great. If it doesn't, no dice.
Oso del lago
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Well now we are open to the possibilities now aren't we? Now just think for a minute how insignificant 160m is over the course of a contract term and when you are negotiating an upcoming contract from a position of Oliver Twist in a soup line then guarantees and promises look mighty tempting. All benefitting Ouut and the sec.
bear2be2
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Big-O!-Bear said:

Well now we are open to the possibilities now aren't we? Now just think for a minute how insignificant 160m is over the course of a contract term and when you are negotiating an upcoming contract from a position of Oliver Twist in a soup line then guarantees and promises look mighty tempting. All benefitting Ouut and the sec.
It's about the money, not who pays it. If the conference gets what it's contractually owed, it doesn't matter who's writing the check. But the money will end up in the Big 12 coffers one way or another.
Oso del lago
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bear2be2 said:

Big-O!-Bear said:

Well now we are open to the possibilities now aren't we? Now just think for a minute how insignificant 160m is over the course of a contract term and when you are negotiating an upcoming contract from a position of Oliver Twist in a soup line then guarantees and promises look mighty tempting. All benefitting Ouut and the sec.
It's about the money, not who pays it. If the conference gets what it's contractually owed, it doesn't matter who's writing the check. But the money will end up in the Big 12 coffers one way or another.


Right, no skin off Ouut and they get to leave early. The 160m is buried under layers of contract in guarantees on their time frame and likely equal what they would pay anyway. So for nothing more than a guarantee we are happy.
bear2be2
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Big-O!-Bear said:

bear2be2 said:

Big-O!-Bear said:

Well now we are open to the possibilities now aren't we? Now just think for a minute how insignificant 160m is over the course of a contract term and when you are negotiating an upcoming contract from a position of Oliver Twist in a soup line then guarantees and promises look mighty tempting. All benefitting Ouut and the sec.
It's about the money, not who pays it. If the conference gets what it's contractually owed, it doesn't matter who's writing the check. But the money will end up in the Big 12 coffers one way or another.


Right, no skin off Ouut and they get to leave early. The 160m is buried under layers of contract in guarantees on their time frame and likely equal what they would pay anyway. So for nothing more than a guarantee we are happy.
It's about the money. If ESPN wants to buy Texas and OU off the hook, fine. That's as bad an investment as the Longhorn Network, but that's their prerogative. Either way, the Big 12 is getting its money.
Oso del lago
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bear2be2 said:

Big-O!-Bear said:

bear2be2 said:

Big-O!-Bear said:

Well now we are open to the possibilities now aren't we? Now just think for a minute how insignificant 160m is over the course of a contract term and when you are negotiating an upcoming contract from a position of Oliver Twist in a soup line then guarantees and promises look mighty tempting. All benefitting Ouut and the sec.
It's about the money, not who pays it. If the conference gets what it's contractually owed, it doesn't matter who's writing the check. But the money will end up in the Big 12 coffers one way or another.


Right, no skin off Ouut and they get to leave early. The 160m is buried under layers of contract in guarantees on their time frame and likely equal what they would pay anyway. So for nothing more than a guarantee we are happy.
It's about the money. If ESPN wants to buy Texas and OU off the hook, fine. That's as bad an investment as the Longhorn Network, but that's their prerogative. Either way, the Big 12 is getting its money.


They will gladly pay us Tuesday for a Cheeseburger today.
DST
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bear2be2 said:

Big-O!-Bear said:

Just watch there will be some network carrot dangled at an opportune time
If that network carrot equals all or most of the $160 million owed, great. If it doesn't, no dice.
No, not quite. That's just their exit fee, and they have to pay that whether they stay through the grant of rights or not. If the Big 12 waves the GOR so that they can actually leave AND the SEC will have their rights, then it's going to cost a lot more than that. Say they want them playing in the SEC by 2023. That's, what? Two years of TV rights they have to buy out in addition to heightened exit fees?

The only way that gets negotiated is if the Big 12 signs a new TV deal with ESPN worth in essence an extra $200 million over say 10 years. Maybe a lot more. The Big 12 really does hold the chips in this scenario, and they can negotiate for a fatass TV deal from ESPN in exchange for letting them go. The conference is in a position to make a lot more money than it should on paper according to people, and that could be what helps lure in a member or two that's already P5.
Oso del lago
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Poaching a P5? Sounds fanciful but I'm all for it! Hope you are right!
historian
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The way the ACC & pac 12 are looking this year, poaching them is looking more possible. It's probably still a long shot.
“Incline my heart to your testimonies, and not to selfish gain!”
Psalm 119:36
bear2be2
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DST said:

bear2be2 said:

Big-O!-Bear said:

Just watch there will be some network carrot dangled at an opportune time
If that network carrot equals all or most of the $160 million owed, great. If it doesn't, no dice.
No, not quite. That's just their exit fee, and they have to pay that whether they stay through the grant of rights or not. If the Big 12 waves the GOR so that they can actually leave AND the SEC will have their rights, then it's going to cost a lot more than that. Say they want them playing in the SEC by 2023. That's, what? Two years of TV rights they have to buy out in addition to heightened exit fees?

The only way that gets negotiated is if the Big 12 signs a new TV deal with ESPN worth in essence an extra $200 million over say 10 years. Maybe a lot more. The Big 12 really does hold the chips in this scenario, and they can negotiate for a fatass TV deal from ESPN in exchange for letting them go. The conference is in a position to make a lot more money than it should on paper according to people, and that could be what helps lure in a member or two that's already P5.
I was specifically talking about brokering an early exit. The TV rights negotiations would come after that.

But regardless of who's footing the bill, the Big 12 has Texas and OU over a barrel, and there will be no resolution that occurs without them paying a ton of money or someone else doing so on their behalf.
Polycarp
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TellMeYouLoveMe said:

ColoradoGRN&GLD said:

Robert Wilson said:


Problem with that the way this works the conference holds the money, so OUT have yo file suit. No sovereign immunity if the state institution is the one that files.
I did not know that. Thanks for the info. Makes me feel a lot better in the B12s position.

As far as what basis would the courts have? I have no idea. I just know that judges are not infallible and there have been MANY court decisions that have puzzled me over the yrs.
I can only add two things.

1) it's in the hands of Big12s external legal counsel, so they likely just get an update across the board to all members. Which is to say that Bowlsby can't f it up. Basically it's a group email at this point.

2) time is on the Big12s side. They really aren't compelled to react in any way other than to move some logos around on a sign. They aren't technically holding anyone hostage, the terms are clear. That puts tremendous pressure on Texas. Oklahoma is cash strapped. They have a wanker lawyer as a president but I'm fairly sure that exit fee is prohibitive and they want UT to foot the bill.

Economically speaking, the Big12 is a pass through entity, so it lives and dies on the TV contract. Because of that, you have a litany of thorny legal issues if one party negotiates in bad faith or is duplicitous and goes around the other parties. Meaning TexZero can't throw any punches that harm another party directly.

I don't know what the final amount will be, but the exit parties are gonna pay.

Just my bet.


I understand that if the exiting parties leave before the TV contracts expire, they owe the Big12 money. If the exiting parties leave after the TV contract, do they still owe the Big 12 money?

If the exiting parties leave before the end of the TV contracts expire, do TV companies get to pay Big12 less?
CTbruin
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The exit fee of $80M per school is NOT tied to TV contracts. It is owed....period.

The GOR is tied to TV
Aliceinbubbleland
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Please Big 12. No expansion to 16. It's bad enough the dilution basis adding the four but adding four more that no one else wants or need is crazy.
Shakesbear
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HEX TEX! HEX TEX! HEX TEX!!!
Retreat Hell! We just got here! The 2/5
RegentCoverup
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Polycarp said:




I understand that if the exiting parties leave before the TV contracts expire, they owe the Big12 money. If the exiting parties leave after the TV contract, do they still owe the Big 12 money?

If the exiting parties leave before the end of the TV contracts expire, do TV companies get to pay Big12 less?
My understanding is that the penalty is meant to discourage teams leaving individually as it shuffles the entire lineup of the league and forces the league to potentially renegotiate the contract with ALL vendors.

It's punitive in intent and form. All the Big 12 has to do is prove they are harmed(not difficult) or will be harmed and I don't see a judge reducing the penalty amount.

It's not a shock to me, but UT has some fools in its' leadership.
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bear2be2
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TellMeYouLoveMe said:

Polycarp said:




I understand that if the exiting parties leave before the TV contracts expire, they owe the Big12 money. If the exiting parties leave after the TV contract, do they still owe the Big 12 money?

If the exiting parties leave before the end of the TV contracts expire, do TV companies get to pay Big12 less?
My understanding is that the penalty is meant to discourage teams leaving individually as it shuffles the entire lineup of the league and forces the league to potentially renegotiate the contract with ALL vendors.

It's punitive in intent and form. All the Big 12 has to do is prove they are harmed(not difficult) or will be harmed and I don't see a judge reducing the penalty amount.

It's not a shock to me, but UT has some fools in its' leadership.
They were clearly convinced that the Big 12, with some help from ESPN, would implode and they'd be spared the exit fees they agreed to in 2011.

That error in judgment is going to be a very costly one.
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