Exit Penalty

[HuskerJosh]

Tom Shatel today saying he talked to some lawyers and doesn't expect Nebraska or Colorado to be forced to pay the full amount, but will probably pay something.

 

http://www.omaha.com/article/20100622/BIGRED01/100629859

[GMoose]

*Correction- to DODGE exit penalty. Hasty typing...

 

No First Downs and Second Guesses in the paper this week with the CWS, so here's an extremely shortened version:

1. I'm not a lawyer and I don't play one in the paper, but I do know several attorneys and they tell me they don't expect Nebraska and Colorado to have to pay the entire exit fee, or damages, or whatever you want to call it, to the Big 12.

First, there's the word "damages.'' The remaining Big 12 schools must prove that NU and CU damaged the league by leaving. That might be hard to do in light of the (reckless) rhetoric last week, with Big 12 commish Dan Beebe and others talking about how the league was now better without NU and CU, how the remaining schools stood to make more money, how it would be a much better basketball league (Frank Martin and the Missouri governor both weighed in on that), etc. Those statements can and will be used against the Big 12 in proving that the league has been lessened or damaged.

Also, one attorney friend of mine said he expected NU to request emails from each Big 12 school to other conferences in the past year, to see who was saying what to which league. The attorney said he suspected some schools, including UT, might not want those emails made public in court.

Finally, a word about Harvey Perlman's "shots'' at Mizzou and Texas at the NU Regents meeting 10 days ago. A lot of folks got their dander up over that. It was clear then, and now, that Perlman was merely laying out his case for a future financial tussle with the Big 12. In other words, Perlman was stating that NU had to leave because Missouri was strongly hinting it wanted to leave, and Texas and others would not commit to staying in the league if both MU and CU left. It was a classic legal play, two moves ahead, by Perlman, nothing personal.

 

My attorney friends expect NU to have to pay something, but nowhere near what is being reported by media types in Texas, and more than likely half of that. We'll see. But the Big 12 case certainly looks like it has holes in it. It will be interesting, considering both Perlman and Beebe are attorneys.

 

2. Enough of this talk about Nebraska and Oklahoma playing a non-conference game. It's not going to happen — and shouldn't. That ship sailed in 1995, when OU chose not to continue the series. Too late now. OU will be playing nine conference games and NU will be playing eight and possibly nine depending on what the Big 10 decides to do. Non-conference games will be needed for home game revenue — and W's. Plus, NU is tied up for the foreseeable future with Washington, UCLA, Tennessee and Miami. As painful as it might be, it's time to turn the page. The old days are over and aren't coming back.

[Street Novelist]

thank you...I agree with everything posted. The NU/OU rivalry ship left the harbor years ago. It's not coming back regardless of how many people on this board want it to. Beebe and Dodds f'd themselves because of all the public statements they made saying the Big 12 is better off without NU and CU. How can they go back on those statements? say they really didn't mean them?

[deedsker15]

thank you...I agree with everything posted. The NU/OU rivalry ship left the harbor years ago. It's not coming back regardless of how many people on this board want it to. Beebe and Dodds f'd themselves because of all the public statements they made saying the Big 12 is better off without NU and CU. How can they go back on those statements? say they really didn't mean them?

funny what happens when you get wishy washy...

[EbylHusker]

Yeah, this isn't something that would make it to trial. They'd settle prior to that for a number of reasons.

[knapplc]

Tom Shatel today saying he talked to some lawyers and doesn't expect Nebraska or Colorado to be forced to pay the full amount, but will probably pay something.

 

http://www.omaha.com/article/20100622/BIGRED01/100629859

 

 

Here's the pertinent part about that article. This is what I've been thinking, and why I've been saying I don't think we'll be paying anything to the Big 12-2.

 

No First Downs and Second Guesses in the paper this week with the CWS, so here's an extremely shortened version:

 

1. I'm not a lawyer and I don't play one in the paper, but I do know several attorneys and they tell me they don't expect Nebraska and Colorado to have to pay the entire exit fee, or damages, or whatever you want to call it, to the Big 12.

 

First, there's the word "damages.'' The remaining Big 12 schools must prove that NU and CU damaged the league by leaving. That might be hard to do in light of the (reckless) rhetoric last week, with Big 12 commish Dan Beebe and others talking about how the league was now better without NU and CU, how the remaining schools stood to make more money, how it would be a much better basketball league (Frank Martin and the Missouri governor both weighed in on that), etc. Those statements can and will be used against the Big 12 in proving that the league has been lessened or damaged.

 

Also, one attorney friend of mine said he expected NU to request emails from each Big 12 school to other conferences in the past year, to see who was saying what to which league. The attorney said he suspected some schools, including UT, might not want those emails made public in court.

 

Finally, a word about Harvey Perlman's "shots'' at Mizzou and Texas at the NU Regents meeting 10 days ago. A lot of folks got their dander up over that. It was clear then, and now, that Perlman was merely laying out his case for a future financial tussle with the Big 12. In other words, Perlman was stating that NU had to leave because Missouri was strongly hinting it wanted to leave, and Texas and others would not commit to staying in the league if both MU and CU left. It was a classic legal play, two moves ahead, by Perlman, nothing personal.

 

My attorney friends expect NU to have to pay something, but nowhere near what is being reported by media types in Texas, and more than likely half of that. We'll see. But the Big 12 case certainly looks like it has holes in it. It will be interesting, considering both Perlman and Beebe are attorneys.

 

If we pay anything at all, it'll be simply to put this thing to bed. I doubt that happens, mostly because of the threat of legal action and the fear of the discovery process that Shatel and another member here has posted about (sorry, I've forgotten who). We'll see. I bet we pay nothing.

[Bleeding Husker Red]

So you don't think they can make a strong argument that they would have been that much better off if NU/CU had stayed and won't make as much now? Being better off now doesn't neccesarily mean they wouldn't have been in an even better position. And if you read the conference by-laws, section 3.3 actually stipulates that member institions AGREE THAT the withdrawal would cause financial hardship. I've quoted the pertinant section below .....

 

 

http://www.big12sports.com/fls/10410/pdfs/handbook/Bylaws.pdf

 

"3.3 Effect of Withdrawal From Conference Other Than by Giving Proper Notice. If, other than by gvng a proper Notce pursuant to Secton 3.1, a Member Insttuton (a “Breachng Member”) wthdraws, resgns, or otherwse ceases to partcpate as a full Member Insttuton n full complance wth these Rules, or gves notce or otherwse states ts ntent to so wthdraw, resgn, or cease to partcpate n the future (a “Breach”), then the Member Institutions agree that such Breach would cause financial hardship to the remaining Member Institutions of the Conference, and that the financial consequences cannot be measured or estimated with certainty at this time. Therefore, n recognton of the oblgatons and responsbltes of each Member Insttuton to all other Member Insttutons of the Conference, each Member Insttuton agrees that after such Breach, the amount of Conference revenue that would otherwse have been dstrbuted or dstrbutable to the Breachng Member durng the two (2) years pror to the end of the Current Term or the then-current Addtonal Term, as the case may be, shall be reduced by an amount that equals the sum of the aggregate of such revenues tmes the followng percentages (such sum beng the “Aggregate Reducton”); f Notce s receved less than two years but on or before eghteen months pror to the Effectve Date, 70%; if Notice is received less than eighteen months but on or before twelve months prior to the Effective Date, 80%; if Notice is received less than twelve months but on or before six months prior to the Effective Date, 90%; or if Notice is received less than six months prior to the Effective Date, 100%."

 

We've already agreed in a legal contract that leaving withouth following a certain procedure would be a financial hardship to the other schools. The tme in advance of leaving is the issue, not the money the other schools would or wouldn't make. Sorry guys. We're paying the full fee. Section 3.1 basically stipulates a minimum notice of 2 years to avoid the penalty.

[Bleeding Husker Red]

No legal background here, and I haven't seen the contract, but it sounds like the exit clause was spelled out. I think Pearlman may have been thinking the Big 12 would dissolve, and didn't want to lose 2010-11 money just because we were earlier out the door a bit earlier than Texas and their gaggle. Now that they're staying, I think we're going to lose the 90% of the Big 12 revenue we would've gotten. Sounds to me like the Big 10 will make sure we're compensated for that, perhaps over time, though Delaney said the financial information will not made public.

 

 

Link to the big 12 By-Laws.

http://www.big12sports.com/fls/10410/pdfs/handbook/Bylaws.pdf

 

Relevant section is 3.1 to 3.3. In a nutshell, a school that leaves the conference with less than 2 years notice is considered in breach and required to pay an exit penalty. Section 3.3 clearly states that "Member Institutions agree that such Breach would cause financial hardship to the remaining Member Institutions of the Conference".

 

The part in quotes is a direct quote. We've already agreed ina legal contract that leaving with less than 2 years notices is a financial hardship to the remaining schools. The amount they actually make is irrelevant...they can argue they would have made even more had we stayed. Sorry folks. we're paying every last penny.

[Bleeding Husker Red]

that is, unless for some inexplicable reason the big 12 decides not to pursue the claim...

[huKSer]

So you don't think they can make a strong argument that they would have been that much better off if NU/CU had stayed and won't make as much now? Being better off now doesn't neccesarily mean they wouldn't have been in an even better position. And if you read the conference by-laws, section 3.3 actually stipulates that member institions AGREE THAT the withdrawal would cause financial hardship. I've quoted the pertinant section below .....

 

 

http://www.big12sports.com/fls/10410/pdfs/handbook/Bylaws.pdf

 

"3.3 Effect of Withdrawal From Conference Other Than by Giving Proper Notice. If, other than by gvng a proper Notce pursuant to Secton 3.1, a Member Insttuton (a “Breachng Member”) wthdraws, resgns, or otherwse ceases to partcpate as a full Member Insttuton n full complance wth these Rules, or gves notce or otherwse states ts ntent to so wthdraw, resgn, or cease to partcpate n the future (a “Breach”), then the Member Institutions agree that such Breach would cause financial hardship to the remaining Member Institutions of the Conference, and that the financial consequences cannot be measured or estimated with certainty at this time. Therefore, n recognton of the oblgatons and responsbltes of each Member Insttuton to all other Member Insttutons of the Conference, each Member Insttuton agrees that after such Breach, the amount of Conference revenue that would otherwse have been dstrbuted or dstrbutable to the Breachng Member durng the two (2) years pror to the end of the Current Term or the then-current Addtonal Term, as the case may be, shall be reduced by an amount that equals the sum of the aggregate of such revenues tmes the followng percentages (such sum beng the “Aggregate Reducton”); f Notce s receved less than two years but on or before eghteen months pror to the Effectve Date, 70%; if Notice is received less than eighteen months but on or before twelve months prior to the Effective Date, 80%; if Notice is received less than twelve months but on or before six months prior to the Effective Date, 90%; or if Notice is received less than six months prior to the Effective Date, 100%."

 

We've already agreed in a legal contract that leaving withouth following a certain procedure would be a financial hardship to the other schools. The tme in advance of leaving is the issue, not the money the other schools would or wouldn't make. Sorry guys. We're paying the full fee. Section 3.1 basically stipulates a minimum notice of 2 years to avoid the penalty.

80% of the 9.3ish million that NU would have received if we stayed, or 80% of the "magic money" from the new TV deal? Is it set for both years or old scale for one year and new scale for the second year? When does the "magic money" come in, 2010-2011 or 2011-2012?

 

Personally I hope IF WE PAY it is old scale for one year and new scale for the second year. Huskers would get 1.86 million in year one. Then in year two, 20% of 14 million is 2.8 million PLUS the Big Ten cut. (And that the minor 5 would be the only ones to get to share, in exchange for not contesting the contract)

 

Truthfully I think some negotiations will make it some middle ground.

[HuskerGBR]

that is, unless for some inexplicable reason the big 12 decides not to pursue the claim...

 

You might be right, but don't think for one second Harvey and Tom haven't looked into all of this. I am no lawyer, so I really have no clue what will happen. What I do know is these contracts can be picked apart by a good lawyer and most of the time there will be a settlement. So I don't see us paying it all. If the UNL leadership says they don't think they will have to pay that much then I believe them. Harvey is no dummy and he is a lawyer.

[Bleeding Husker Red]

that might be the thing they wind up fighting over. We're still in for this year, so whatever our games make would be the answer I would think. I *don't think* they can come after our first year big ten money... at least I hope not.

[Bleeding Husker Red]

Well, I certainly HOPE TO and HP can get around it. But the bylaws seem to be pretty clear. I just hope they cant come after our fist year big ten money because that would fall under the two year time period.......

[EbylHusker]

that is, unless for some inexplicable reason the big 12 decides not to pursue the claim...

 

They'll pursue it, but they'll settle it out of court. Neither side wants the cost or bad image that would come from what would be made a very public and drawn out deal. So we'll pay something, but not everything.

[HuskerMack]

It would be for the money that was generated from last year and this year. They can not go after the money you would make in a new conference. So they are looking at about 14 million for both years. What HP is going to argue is that they were forced to make the move do to the other members looking at leaving. They will Legally make the Pac-10, Big-Ten and SEC hand over all emails to them if they go to court which they will not. Texas is not going to want all of there communications with the other conferences leeked out. This will be settled out of court for about 50% of that money.