ACC Grant of Rights deal 101: What does it mean for the conference? - SCACCHoops.com

ACC Grant of Rights deal 101: What does it mean for the conference?

by Cardiac Hill

Posted: 4/22/2013 6:31:40 PM


I'll admit it, before today I'd never heard of a Grant of Rights deal. Okay, so maybe I heard of it, but I knew absolutely nothing about it. That threw me into a bit of a tailspin after the ACC announced they had one of these shiny new toys.

Since then, I've done a fair amount of Googling in-depth research about what this means now and in the future, for the conference. Now, this could all blow up in our face, boys and girls. As Dr. Malcolm said in Jurassic Park, "Life will find a way." Sometimes things appear bulletproof on the surface and fall apart like a house of cards later, so I'm unwilling to say this will end all of the realignment issues the NCAA has. But on the surface, this looks great for not only the stability of the ACC, but in all of college football.

With that said, based on what I've researched, here's a brief Q&A session with ... myself.

What the heck is a Grant of Rights deal?

Essentially, it's where the members in a conference agree to give up their television rights should they leave said conference. In other words, say Pitt decides they'd rather join Penn State in the B1G (and the B1G were actually, you know, interested). The Panthers wouldn't see a dime of the ACC TV money through the duration of the Grant of Rights deal. Here's the key part - the ACC holds onto those rights and the B1G can't have them, so they wouldn't make any money on Pitt regarding TV money.

How long is the ACC's Grant of Rights deal?

Through 2027 ... and that's the key part. If a Grant of Rights deal were only for a few years (for example, the Big 12 had a Grant of Rights deal of only six years previously, before extending it), a conference could still scoop in and take schools from other conferences that had them in place, banking on the fact they'll hold their TV rights once the deal ended. But we're 14 years out from that happening - that's a long ways away and should discourage members from jumping ship.

But why do we need these? Don't we already have a ridiculously high exit fee in the ACC?

Answering the second part first, yes there is. The ACC's exit fee is in the neighborhood of $50 million. You would think that would be enough of a deterrent, but here's the thing - it may not always be enforceable. Our own Bryan (@FearTheStachee on Twitter, by the way) dug up a pretty good article explaining how large exit fees are often more susceptible to being unallowed in court since they're not really a good indicator of how much a conference suffers by the loss of a member. So while the exit fee is high, there are two things to point out here: First, it may not always be enforceable and second, the Grant of Rights deal is far more damaging to a school financially. When you factor in the annual fee of about $20 million each school will reportedly make in the new ACC deal, we're talking a penalty of nearly $300 million if someone decided they wanted out today.

That's a lot of Sorrentos.

So this ends expansion, right? Right?!?!

Well, this one's tricky. But, contrary to what you're reading out there, this doesn't necessarily mean an end to expansion. First, there are teams still in conferences without one of these things ... meaning their only penalty is perhaps the exit fee penalty. And as far as adding other teams, the ACC (and other conferences, for that matter) could still be looking to do that. That means some floaters still out there in conferences without a Grant of Rights deal (i.e the Big East ... yeah, I'll get to this in a minute), UConn, Cincinnati, and South Florida, for example, could still be up for grabs. But what this could stop is the poaching of members in conferences with a Grant of Rights deal.

The other thing that could throw a monkey wrench in all of this would be, of course, a lawsuit. You've got to bet that somewhere down the line, a disgruntled member will challenge this should they want to leave. And when the courts have a hold of it, there's no telling what could happen. Exit fees were supposed to stop everything, but that's going by the wayside now. We really have no idea if this would truly hold up in court until we see a school lose its case.

And yeah, I'll get to the SEC in a second.

By the way, did I mention that your site's April Fools jokes sucked?

Yeah, I think you did.

Who has Grant of Rights deals?

The Big 12, B1G, Pac-12, and now the ACC.

(Counting on hands ... that's four) Wait, so the only conferences in the former 'Big Six' without one of these is are the SEC and the Big East?

Big Six. That's cute. Sorry, back to your question - yes.

So the SEC basically does what they want and makes boatloads of money. They don't really need one of these, right?

Well, eventually it would behoove them to have one just to further ensure their stability. But in theory, it's unlikely SEC members are leaving for other conferences, so there's probably not a big rush on this. In fact, they probably know as much about these as I did before today.

So, um, shouldn't the Big East have done this before?

/UncomfortableSilence - Well, yes. And in fact, ex-commissioner John Marinatto said the Big East was indeed working on one before Pitt and Syracuse left. The conference was then working on a deal to put one in place even after they left ... but that never happened. If Marinatto's version of the story of trying to establish one after Pitt and Syracuse left is accurate, it's probably hard to find him at fault. Schools were looking for a way out at that point and being tied into that conference for 15 or so years when other options could become available probably wasn't all that appealing to some. Okay, most.

But if the Big East did in fact have one in place, the conference would likely still be together.

Conclusion

There's lots more to digest here, but I'm calling it a wrap for now. The bottom line is that this is a very good day for the ACC and its members, such as Pitt.

Be sure to join Cardiac Hill's Facebook page and follow us on Twitter @PittPantherBlog for our regular updates on Pitt athletics.

 

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