Tuesday, June 29, 2010
Big 12 bylaws vs. Nebraska/Colorado
By ESPN.com staff
The rumbling about Nebraska and Colorado being withheld their conference revenue after announcing their intentions to leave the conference is still pretty quiet. Outside of Nebraska chancellor Harvey Perlman saying he didn't believe withholding the money would be "appropriate" and Big 12 commissioner Dan Beebe adding that he was "curious" as to the Huskers' case in the matter, there hasn't been much heard from either party.
What do the bylaws say in the matter? Let's take a look, piece by piece, skipping to the important, applicable sections of the 14-page document.
No Member Institution shall be entitled to distribution of the then-current revenues from the Conference after the effective date of its withdrawal, resignation, or the cessation of its participation in the Conference...
English translation: Once you tell the conference you're leaving, you can't have any more of the conference's money.
(Update 3:45 p.m: To clarify: Schools can't receive their full share after announcing their intention to leave, and obviously can't receive any money after they leave the conference.)
That seems pretty clear, but Nebraska seems to believe it should receive its full share for the yet-to-be-played 2010 season, which would contradict this.
If a Member Institution gives proper Notice pursuant to Section 3.1 (a “Withdrawing Member”), then the Members agree that such withdrawal 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.
English translation: You left. We all agree we're going to have less money, but we don't know how much we're going to lose.
This is where things start to get complicated, and may have to be sorted out in court. Tom Shatel at the Omaha World-Herald noted last week the use of the word "damages" later in the bylaws, and how the schools would have to prove that in court, according a few lawyers he spoke with. Clearly, the Big 12's survival hinged on the fact that there would not be financial damages, and everyone was better off. But in the bylaws, it states that the schools "agree" that there would be "financial hardship," though those hardships can't be measured.
So which is it? Sounds like one side is going to get lawyer'd.
The bylaws also lay out the timeline of what schools would have to pay. Colorado's exit reportedly may come earlier than 2012, but Nebraska gave over a year's notice for their exit, so they would be subject to giving up 80 percent of their conference revenue. They've set a date of July 1, 2011 for the move to take effect, and announced the move on June 11, 2010.
Also, a quick reminder: The Forgotten Five did agree to offer up their money from Nebraska and Colorado to Texas, Oklahoma and Texas A&M, but Texas has publicly rejected the offer and it's currently off the table. Presumably, any fees paid by Nebraska and Colorado would be distributed equally.
The Member Institutions agree that such reduction in the amount of revenues distributed to a Withdrawing Member is reasonable and shall be in the form of liquidated damages and not be construed as a penalty.
English translation: By signing this document, you believe these penalties are reasonable.
This is where the lawyers would really be needed. It doesn't necessarily say the conference must prove damages, but all the positive talk about moving forward into more prosperity for each of the teams could become Nebraska and Colorado's out. If this case ends up in court, which I suspect it might, I imagine the main point of contention will be there. Beebe made a strong case, and has contended that the league's revenues will rise in the coming years. But check the wording in his most recent statement: He's clearly confident and media-approved, but he avoided mentioning finances. I can't help but chuckle a little bit at the clear irony of losing millions of dollars just by saying you will do the opposite, but I don't have any money to lose in the case. I doubt any of the administrators from the remaining 10 Big 12 schools are laughing with me.