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Wednesday, February 29, 2012
After exits, Big 12 bylaws need an upgrade

By David Ubben

Before a couple years ago, few had much intimate knowledge of the Big 12 bylaws.

The league's recent spate of misfortunes and schools leaving has changed all that, particularly in regard to Section 3, which deals with the complicated matters of team exits.

Reads section 3:
Each Member Institution agrees that in the event such Member desires to withdraw from the Conference, that it will in good faith give Notice not less than two (2) years before the end of the Current Term or any Additional Term, as the case may be.

...

If, other than by giving a proper Notice pursuant to Section 3.1, a Member Institution (a “Breaching Member”) withdraws, resigns, or otherwise ceases to participate as a full Member Institution in full compliance with these Rules, or gives notice or otherwise states its intent to so withdraw, resign, or cease to participate in 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, in recognition of the obligations and responsibilities of each Member Institution to all other Member Institutions of the Conference, each Member Institution agrees that after such Breach, the amount of Conference revenue that would otherwise have been distributed or distributable to the Breaching Member during the two (2) years prior to the end of the Current Term or the then-current Additional Term, as the case may be, shall be reduced by an amount that equals the sum of the aggregate of such revenues times the following percentages (such sum being the “Aggregate Reduction”); ... if Notice is received less than twelve months but on or before six months prior to the Effective Date, 90%.
Missouri, SEC
Missouri is headed to the SEC after agreeing to pay less than half of what Big 12 bylaws called for.
It's a lot of words. In short, you're supposed to give the conference two years notice before leaving. Nobody's doing that in the Big 12.

If you don't give two years' notice, you're going to pay.

For Texas A&M and Missouri, two years' worth of conference revenue would have been in the ballpark of $30 million. Thus, 90 percent of that money would equal something close to $27 million.

Missouri will see $12.41 million withheld under a settlement announced Tuesday. Texas A&M will have the same amount withheld, but receive considerations from the conference money that leaves just a $9.31 million hole in Texas A&M's bottom line.

Nebraska paid 47.6 percent of the approximately $20 million it would have owed by the letter of the Big 12 bylaws. That totaled $9.25 million.

The precedent had been set.

Like Nebraska and Colorado, Texas A&M and Missouri can consider this a win.

I'm no lawyer. I like to think I can make some sense, though. The Big 12 bylaws say to pay one number. Four teams leave the league and all four pay less than half of what the bylaws say?

That is a problem. A big, big problem.

When West Virginia left, the Big East bylaws required schools to pay $5 million and give 27 months' notice. That number has since been raised to $10 million.

West Virginia didn't give 27 months notice, announcing in October that it would join the Big 12 on July 1, 2012. After months of legal wrangling, the Mountaineers announced they'd be leaving on time, but would pay $20 million.

Everyone has their price.

For the Big 12, though, that price seems to be well below what the rules require.

Why don't the laws have teeth? That's for the Big 12 to dig through the legalese and figure out.

Instituting changes to the bylaws after Nebraska and Colorado left had been discussed in the league, but never came to fruition. By the time A&M and Mizzou left, it was too late to make any new changes.

With the recent grant of media rights to the conference, the Big 12 won't have to worry about losing any members for at least six years. After granting the media rights to the Big 12, the league's current 10 members only hold any value for the Big 12 for the next six years. That's plenty of time.

Between now and then, change must happen. Maybe no one leaves the league ever again. No one can say with any certainty whether or not that will happen.

The league better make sure that if it does, its bylaws have the ability to flex.

So far, they've been nothing but steamrolled.

It's not really about preventing teams from leaving the league anyway. If a program wants to move conferences and has a viable new home, it will find a a way to leave. Public demand, among other things, assures that.

Tightening up the league's bylaws is more about getting the money that rightfully belongs to the conference members, according to rules they agreed to when the conference was formed, or in the cases of TCU and West Virginia, when they joined the league.

If the bylaws were tighter, the league's members would have shared just under a combined $100 million from outgoing Texas A&M, Missouri, Nebraska and Colorado. Instead, it withheld a total of just $37.83 million.

That's unacceptable.