Conference Realignment thread

[Billings]

On 1/10/2024 at 11:19 AM, HawaiiMongoose said:

The article is technically correct, but if OSU and WSU opted for a Pac rebuild instead of a merger that added all 12 MWC members, they would never add 11. They would target four to eight, in which case the cost to the Pac would be $43 million to $94 million.

That's less prohibitive, although assuming this termination fee would be in addition to the $17 million exit fee that each departing MWC school would owe the MWC, it would probably be high enough to effectively prevent the Pac from offering to subsidize those exit fees.

If I'm reading all this right, the termination fee provision is a very strong disincentive for any collusion between the Pac and any current MWC members to plan a Pac rebuild in lieu of a full merger. Well done Gloria.

For anyone interested, here's a link directly to the full text of the scheduling agreement:

https://s3.documentcloud.org/documents/24356364/mwc-scheduling-agreement-01429274.pdf

no surprise at all that the MWC would protect itself

[HawaiiMongoose]

On 1/10/2024 at 1:25 PM, Billings said:

no surprise at all that the MWC would protect itself

This came as a surprise to me, only because I thought such a poaching penalty would have been publicly disclosed at the time the agreement was signed.  I remember posting my concerns last month about the agreement not including one.  I'm glad I was wrong!

[Someone Else]

Well if they took 6 teams.. 67 million is a chunk but not prohibitive if they are super resistant to a full merger.  At that point though then it's up to those 6 teams if they want to pony up 17 mill each.

If it were to happen any teams left behind would have a nice chunk of change to divvy up.

[utgrizfan]

On 1/10/2024 at 4:42 PM, HawaiiMongoose said:

This came as a surprise to me, only because I thought such a poaching penalty would have been publicly disclosed at the time the agreement was signed.  I remember posting my concerns last month about the agreement not including one.  I'm glad I was wrong!

I am assuming this doesn't apply to Hawaii as they are only a partial member of the MWC correct? I skimmed through but didn't see anything about this effecting affiliate members.

If it doesn't I still think (though far more unlikely now) if they somehow went forward and poached 6 schools that would be 67 million, with their CFP payouts for the next 2 seasons they could probably afford that.

I still feel a full merger is the most likely, however OSU and Wazzu will definitely be exploring the above option first, their actions seem to telegraph that.

[Did I hear a WOOSH?]

On 1/6/2024 at 1:24 PM, NorCalCoug said:

No, stranger things have not happened.  The odds of that are much lower than 5%.  The ACC will lose its biggest and most valuable brands.  The BigXII will renegotiate their TV deal before the ACC and lock in teams.  The ACC leftovers won’t get as much money as the BigXII.  No one is going to pay hefty exit fees or get out is GOR for at best similar pay or, more likely, less.  There’s virtually zero chance of the ACC poaching the BigXII.

The ACC will fare better than the PAC just because of sheer membership numbers but their upcoming fate will be similar.

I can’t believe this still needs to be said.  Even with all their current members intact the ACC is still Moe Greene and the XII is Michael Corleone.  

[Wyobraska]

On 1/10/2024 at 6:16 PM, Someone Else said:

Well if they took 6 teams.. 67 million is a chunk but not prohibitive if they are super resistant to a full merger.  At that point though then it's up to those 6 teams if they want to pony up 17 mill each.

If it were to happen any teams left behind would have a nice chunk of change to divvy up.

We'll have to see how it shakes out with P5 payments and all of that after the next two years are up, but $17 mil per team is a big number when the new conference won't make a big number via their TV deal.   

Pretty big risk for schools depending on the P5 status of the PAC 12.  I'm guessing the P4 somehow wrangle away their money and power. 

[Did I hear a WOOSH?]

On 1/7/2024 at 3:51 PM, Spaztecs said:

 

As far as I'm concerned, they can keep paying the MW $14 mil per year.

Plus, it keeps their shitty basketball programs from dragging down the MW's Net and KenPom ratings.

That’s going to stop once the pac reserves are exhausted, which will be next year.

[Headbutt]

On 1/10/2024 at 6:29 PM, utgrizfan said:

I am assuming this doesn't apply to Hawaii as they are only a partial member of the MWC correct? I skimmed through but didn't see anything about this effecting affiliate members.

If it doesn't I still think (though far more unlikely now) if they somehow went forward and poached 6 schools that would be 67 million, with their CFP payouts for the next 2 seasons they could probably afford that.

I still feel a full merger is the most likely, however OSU and Wazzu will definitely be exploring the above option first, their actions seem to telegraph that.

This does apply to Hawaii.  It doesn't state that it effects affiliate members, but...the contract specifically refers to taking 11 or 12 schools and only being void if the Pac takes all 12 schools.  We're not 12 without Hawaii (who is actually not an affiliate member, but rather a full member in football only). 

Perhaps they could afford the $67 million, but I think it looks pretty prohibitive.  The '23-'24 payout will be divided 12 ways, and the '24-'25 payout may not even exist at the same level since the CFP has determined that a conference has to have 8 teams to receive a full payout. 

I don't know the specifics of the AD debt for either school, but I keep hearing that it's pretty high.  Their future income is going to go down, not up.  It would be gross mismanagement for either school to not use their "windfall" from the conference split to put their AD in the black before they took any other steps.  That means we really don't know how much the twins will have to spend in the end here, especially since they will still be on the hook for 1/12th of the pending conference liabilities.

Now, all of that aside it appears, and perhaps that is just appearance that the MWC exit fees have been reduced for this contract.  The OregonLive article specifies that the exiting MWC schools would have to pay a termination fee of $5.5 million, while the nevadasportsnet.com article states that the $17 million exit fee is still in place.  Does one replace the other, or are they in aggregate.  Either way the notion of the Pac paying individual MWC exit costs kind of goes out the window.  It's been held that MWC schools cannot pay the $17 million on their own (actually JD Wicker stated that SDSU can't) and if that is the case then roughly $27 million per school just to join a de facto startup becomes absolutely prohibitive. 

If I'm CSU's president and a booster comes to me with $17 million to make the switch to a conference unlikely to garner significantly more income than the MWC can get on it's own, I'm directing said booster to our NIL collective.

OK, I'm rambling, but this has locked things up pretty solid IMO.

[Someone Else]

12 minutes ago, Headbutt said:

This does apply to Hawaii.  It doesn't state that it effects affiliate members, but...the contract specifically refers to taking 11 or 12 schools and only being void if the Pac takes all 12 schools.  We're not 12 without Hawaii (who is actually not an affiliate member, but rather a full member in football only). 

Perhaps they could afford the $67 million, but I think it looks pretty prohibitive.  The '23-'24 payout will be divided 12 ways, and the '24-'25 payout may not even exist at the same level since the CFP has determined that a conference has to have 8 teams to receive a full payout. 

I don't know the specifics of the AD debt for either school, but I keep hearing that it's pretty high.  Their future income is going to go down, not up.  It would be gross mismanagement for either school to not use their "windfall" from the conference split to put their AD in the black before they took any other steps.  That means we really don't know how much the twins will have to spend in the end here, especially since they will still be on the hook for 1/12th of the pending conference liabilities.

Now, all of that aside it appears, and perhaps that is just appearance that the MWC exit fees have been reduced for this contract.  The OregonLive article specifies that the exiting MWC schools would have to pay a termination fee of $5.5 million, while the nevadasportsnet.com article states that the $17 million exit fee is still in place.  Does one replace the other, or are they in aggregate.  Either way the notion of the Pac paying individual MWC exit costs kind of goes out the window.  It's been held that MWC schools cannot pay the $17 million on their own (actually JD Wicker stated that SDSU can't) and if that is the case then roughly $27 million per school just to join a de facto startup becomes absolutely prohibitive. 

If I'm CSU's president and a booster comes to me with $17 million to make the switch to a conference unlikely to garner significantly more income than the MWC can get on it's own, I'm directing said booster to our NIL collective.

OK, I'm rambling, but this has locked things up pretty solid IMO.

I have no idea how this will play out but I will be mighty surprised if OSU/WSU end up in a conference with the 12 MWC members.

[Someone Else]

25 minutes ago, Did I hear a WOOSH? said:

I can’t believe this still needs to be said.  Even with all their current members intact the ACC is still Moe Greene and the XII is Michael Corleone.  

Sorry to break it to you but neither the ACC nor the B12 is Michael Corleone.

[HawaiiMongoose]

On 1/10/2024 at 4:38 PM, Headbutt said:

This does apply to Hawaii.  It doesn't state that it effects affiliate members, but...the contract specifically refers to taking 11 or 12 schools and only being void if the Pac takes all 12 schools.  We're not 12 without Hawaii (who is actually not an affiliate member, but rather a full member in football only). 

Perhaps they could afford the $67 million, but I think it looks pretty prohibitive.  The '23-'24 payout will be divided 12 ways, and the '24-'25 payout may not even exist at the same level since the CFP has determined that a conference has to have 8 teams to receive a full payout. 

I don't know the specifics of the AD debt for either school, but I keep hearing that it's pretty high.  Their future income is going to go down, not up.  It would be gross mismanagement for either school to not use their "windfall" from the conference split to put their AD in the black before they took any other steps.  That means we really don't know how much the twins will have to spend in the end here, especially since they will still be on the hook for 1/12th of the pending conference liabilities.

Now, all of that aside it appears, and perhaps that is just appearance that the MWC exit fees have been reduced for this contract.  The OregonLive article specifies that the exiting MWC schools would have to pay a termination fee of $5.5 million, while the nevadasportsnet.com article states that the $17 million exit fee is still in place.  Does one replace the other, or are they in aggregate.  Either way the notion of the Pac paying individual MWC exit costs kind of goes out the window.  It's been held that MWC schools cannot pay the $17 million on their own (actually JD Wicker stated that SDSU can't) and if that is the case then roughly $27 million per school just to join a de facto startup becomes absolutely prohibitive. 

If I'm CSU's president and a booster comes to me with $17 million to make the switch to a conference unlikely to garner significantly more income than the MWC can get on it's own, I'm directing said booster to our NIL collective.

OK, I'm rambling, but this has locked things up pretty solid IMO.

I'm pretty sure the OregonLive article is mistaken.  The $5.5 million is not the termination fee that "a school leaving the Mountain West must pay" as the article states. Rather, based on my reading of the agreement language, it is the termination fee that the Pac would pay to the MWC if either OSU or WSU leaves the Pac during the term of the agreement, unless the departure is to join the MWC or to join one of the remaining four Power Conferences.

I couldn't find anything in the agreement that invalidates or even references the $17 million exit fee that an MWC school would pay to leave the conference.  Moreover the MWC member schools are not parties to the agreement, only the conference is.  So I think the exit fee is unaffected by the agreement.

[Headbutt]

On 1/10/2024 at 8:18 PM, HawaiiMongoose said:

I'm pretty sure the OregonLive article is mistaken.  The $5.5 million is not the termination fee that "a school leaving the Mountain West must pay" as the article states. Rather, based on my reading of the agreement language, it is the termination fee that the Pac would pay to the MWC if either OSU or WSU leaves the Pac during the term of the agreement, unless the departure is to join the MWC or to join one of the remaining four Power Conferences.

I couldn't find anything in the agreement that invalidates or even references the $17 million exit fee that an MWC school would pay to leave the conference.  Moreover the MWC member schools are not parties to the agreement, only the conference is.  So I think the exit fee is unaffected by the agreement.

Thanks, that makes sense.

[Headbutt]

On 1/10/2024 at 7:51 PM, Someone Else said:

I have no idea how this will play out but I will be mighty surprised if OSU/WSU end up in a conference with the 12 MWC members.

That would be the safe bet, but it does seem the cards are stacked in favor of it happening.

[utgrizfan]

On 1/10/2024 at 8:20 PM, Headbutt said:

Thanks, that makes sense.

This seems to imply the 5.5 and 17 million are both just the exit fee depending on when a team leaves:

"The new exit fee structure as of spring 2021: Three times the average annual payout with 12 months' notice, double that inside 12 months. With an average annual payout per school estimated between $5.5 million and $6 million this year, that computes to about $17 million"

https://www.sandiegouniontribune.com/sports/aztecs/story/2023-08-26/san-diego-state-sdsu-aztecs-mountain-west-exit-fees-commissioner-craig-thompson-conference-realignment#:~:text=The new exit fee structure,computes to about %2417 million.

[utgrizfan]

On 1/10/2024 at 7:51 PM, Someone Else said:

I have no idea how this will play out but I will be mighty surprised if OSU/WSU end up in a conference with the 12 MWC members.

They are sure as hell going to try anything and everything to not merge completely with the MWC, however, I find it very unlikely that they will be able to accomplish that.

[Headbutt]

On 1/10/2024 at 8:24 PM, utgrizfan said:

This seems to imply the 5.5 and 17 million numbers are just the exit fee:

"The new exit fee structure as of spring 2021: Three times the average annual payout with 12 months' notice, double that inside 12 months. With an average annual payout per school estimated between $5.5 million and $6 million this year, that computes to about $17 million"

https://www.sandiegouniontribune.com/sports/aztecs/story/2023-08-26/san-diego-state-sdsu-aztecs-mountain-west-exit-fees-commissioner-craig-thompson-conference-realignment#:~:text=The new exit fee structure,computes to about %2417 million.

Yeah, I think @HawaiiMongoose is correct that the exit fee hasn't changed.  It seems to me like the OSU website just doesn't have a good grasp on how the MWC exit fee works.  Amazing how many media entities have struggled with that.

[Headbutt]

On 1/10/2024 at 8:27 PM, utgrizfan said:

They are sure as hell going to try anything and everything to not merge completely with the MWC, however, I find it very unlikely that they will be able to accomplish that.

It looks to me like they're resigned to it, just not ready to commit yet due to wanting to see if any other viable options present themselves.

[utgrizfan]

On 1/10/2024 at 8:31 PM, Headbutt said:

It looks to me like they're resigned to it, just not ready to commit yet due to wanting to see if any other viable options present themselves.

I think they're banking on the fallout from the potential ACC collapse to somehow find a way into either the ACC or Big12. They have 2 years to hope for that to happen while they collect the most $$ they're going to probably receive from the CFP for the foreseeable future.

[utgrizfan]

On 1/10/2024 at 7:27 PM, Wyobraska said:

We'll have to see how it shakes out with P5 payments and all of that after the next two years are up, but $17 mil per team is a big number when the new conference won't make a big number via their TV deal.   

Pretty big risk for schools depending on the P5 status of the PAC 12.  I'm guessing the P4 somehow wrangle away their money and power. 

I don't see any scenario with the PAC being allowed to keep their P5 status, they should just accept that. What they can do is try to make the best Conference they can with what's left and hopefully make some noise in the expanded Playoff to earn respect that way, seems to be working with Basketball.

I am expecting a full merger and maybe snagging 2 AAC schools to increase the TV $$ and help the optics of the new PAC being the best "Mid-Major" Conference, similar to how the MWC was viewed when Utah, BYU and TCU were members. 

Personally I'd go for UTSA and UNT (#31 and #5 TV Markets) to give the Conference a footprint in Texas and a new Time Zone to also help increase TV money and slots. I wouldn't travel any farther East as travel will have to be factored in, but I could see this conference potentially getting 8-10 Million per team:

OSU...................Boise
Wazzu...............Utah State
Fresno...............Wyoming
SDSU.................Colorado State
Hawaii...............Air Force 
SJSU..................New Mexico 
UNLV..................UTSA
Nevada..............North Texas

[renoskier]

On 1/10/2024 at 5:16 PM, Someone Else said:

Well if they took 6 teams.. 67 million is a chunk but not prohibitive if they are super resistant to a full merger.  At that point though then it's up to those 6 teams if they want to pony up 17 mill each.

If it were to happen any teams left behind would have a nice chunk of change to divvy up.

umm...pretty sure the $17mil is off the table. The agreement says: In addition, a school leaving the Mountain West must pay a termination fee of $5.5 million.