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Deals, Deals, Deals

2010 September 22
by Skip Sauer

The University of Colorado will join Nebraska and Utah as members of the Pac-10 in 2011 after negotiating a $6.863 million exit package with the Big 12.  Nebraska is paying $9.25 million for the same privilege to leave for the Big 10.   This story in Boulder’s Daily Camera notes that the Pac-10 is financing Colorado’s severance payment, in effect through reduced future payouts to Colorado.  Payouts of this magnitude — and the ability of Colorado and the Pac-10 to finance the early move with internal funds –  imply very large gains to the new Pac-10 group of schools from this realignment.

Elsewhere, Turner Sports is increasing its presence as a distributor of NCAA content, with “a 14 year digital-rights deal … that includes management of NCAA.com, the primary web site for all 88 NCAA tournaments and other services.”  This appears to be a bet that the existing TV networks will morph into what a Turner executive referred to as an “interconnected” system of distributing signals to your television.  This account of the story is in the “Sports Briefs” section, but does include mention of the recent 14 year (again), $10.8 billion deal between the NCAA, CBS and Turner to cover the NCAA men’s basketball tournament.  Turner may be up to something big here.

In the same article is an interesting account of a a deal not done, one that led to a lawsuit between a would-be basketball coach and the University of Minnesota:

A judge has reduced the amount of money the University of Minnesota must pay to a former Oklahoma State coach who sued the school and Coach Tubby Smith over an aborted hiring.

In court documents yesterday, Hennepin County Judge Regina Chu denied a request for a retrial, saying there was a reasonable basis for the jury’s verdict. She said alleged misconduct by Williams’ attorneys was minor and didn’t prejudice the jury.

The judge reduced the money award from $1.25 million to the $1 million limit of the university’s insurance policy.

Williams said Smith falsely represented that he had the authority to hire him when the two talked in 2007 about an assistant-coaching position in Minnesota. Williams quit at Oklahoma State, but he wasn’t hired by Minnesota after Athletics Director Joel Maturi of the Gophers said Williams had NCAA recruiting violations in his past.

I’ve got two observations.  First, let’s grant that Smith made an error, but that Minnesota’s AD did not.  Under that assumption, the AD has put a minimum price tag of $1 million or so on having a member of the basketball staff with “recruiting violations in his past.”  Score one for the AD here, in my book.  But second, why is Minnesota’s liability limited to the amount that they are insured?  If you do $10 million worth of damage but are only insured for $1 million, by what logic does your insurance policy reduce your liability to the person harmed by $9 million?  I don’t get the logic of the judge’s decision to reduce the award.

And now to other deals not done, this time in Nascar.  The title of this story is “Tony Stewart, Jeff Gordon feel sponsorship squeeze.”  The essence of it:  Gordon’s 20 year sponsorship with DuPont is over, and progress towards a new package with any sponsor appears to be stop-and-go.  Stewart’s deal with Old Spice has been terminated as well.

I find it curious that the money is flowing like mad in the not-for-profit NCAA, but drying up elsewhere across the sports landscape.

6 Responses
  1. k1ldare permalink
    September 22, 2010

    Nebraska’s going to the Big-10, not Pac-10.

  2. Harmy G permalink
    September 22, 2010

    Nebraska is joining the Big 10…

  3. Skip permalink*
    September 22, 2010

    Oops; will correct that. Thanks!

  4. Duane Rockerbie permalink
    September 23, 2010

    As usual, most of the reason for the Colorado move is television rights, which are more lucrative in the PAC-10. Also the revenue sharing for bowl games is probably much more in the PAC-10, although I don’t know this for sure.

    This is also why BYU is considering leaving its conference and becoming independent. BYU has its own heavily subscribed television channel for its games and it does not want to share this revenue with the rest of its conference.

  5. Tom permalink
    September 23, 2010

    I think there is a little more going on with the BYU deal. It is part of the Mormon religion becoming mainstream. They signed a 10 year deal to play Notre Dame every year. BYU will now play a national schedule, they’ll cover the country and get Mormons all over to attend their games. In a conference, BYU would play more of a regional schedule.

    I do not think it is orchestrated, but Mitt Romney’s continued interest in another run for the Presidency is related to the expansion of the religion out of the mountain west.

  6. Duane Rockerbie permalink
    September 23, 2010

    Well Tom, I won’t touch any of that! But you might be right.

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