Welcome to the Friday Feedback, popping bottles of Andre and lighting bottle rockets to celebrate not the news of WVU’s Tier 3 deal, but the presumed end of the conflict that had ensnared so many and so much time. Truly, it’s a … oh, for crying out loud.
Though Raese had said West Virginia Radio would not participate in the new bidding process, the company filed a lawsuit in Monongalia Circuit Court last month
The 206-page lawsuit asked the court to bar IMG or West Virginia Media from participating in the new rebidding process and sought punitive damages from Payne, Clements, Luck and others “for their outrageous and scandalous behavior.”
The lawsuit is still pending in court.
When asked about the deal announced Thursday, Raese attorney Bob Gwynne said, “This is an issue we will address in litigation.”
So we’ve got that going for us, which is probably not nice. We should expect some prompt reply and I’d have to think Team Raese anticipated this rapid conclusion. Whether related or not, we saw Thursday that Team Raese remains at least determined. It filed a motion to have a judge disqualified from the case. I’ll spare you the details, but just know that a dispute at a Fourth of July party in 1987 is at the center of this latest menace.
I happen to think we’re near the end and my hunch is that WVU is beyond confident the lawsuit has no merit and will be tossed — which could explain the move to disqualify the judge. Team Raese could re-file its suit, since more than a few things have now changed, and refresh some rhetoric and introduce some more. Who knows? And maybe more importantly, who cares?
What matters is that WVU made a big league move Thursday to inflate its income. We’re talking more money on average from Tier 3 rights than what the Mountaineers were receiving from the Big East. It’s huge for hiring and retaining coaches, for acquiring, maintaining and developing bells and whistles, for acting like you belong.
But you already knew that.
What people thought they knew yesterday was problematic. WVU did not lose $30 million by signing a contract worth more than $80 million guaranteed. I touched on this in the blog yesterday, but the prior $110 million figure included guaranteed money and incentives based on a revenue sharing plan. The $80 million was just the guaranteed money — and as I understand it, it’s more like $85 or so million. It merely mentions the revenue sharing, which can be worth some money.
In short, revenue sharing works like this: IMG College guaranteed WVU a fee every year. That fee will escalate over the 12 years to adjust for the effect time has on the market. But IMG is going to make a lot of cash off WVU. It will take from that stash to pay WVU and to pay for its own expenses. There will still be leftover money and that will be split among WVU and IMG.
We’ll learn the specifics if/when WVU releases the contract.
Over 10 or 11 years, that split revenue can add up to make up a bunch of the difference, though not all of it.
WVU has a plan for the rest, and this is where things get interesting and highly ironic. Check this paragraph from the press release.
WVU retains some existing sponsorships with corporate entities such as athletic apparel and footwear, health care, financial services and pouring rights.
We’re talking about Nike, Coca-Cola, Gatorade, United Bank, WVU Hospitals, so on and so forth, I think, based on who WVU has done business with through the years. WVU will continue to negotiate those contracts and bank the income. Combine those contracts, be they with the companies in place of the ones who come into play in the future, across the 12 years and then add that to the revenue sharing and this is probably going to be very close to the old figure of $110 or so million.
The best part?
WVU will negotiate and benefit from those contracts, conveniently enough because it was made to go through the RFP process twice and had a change of heart the second time around thanks to Raese’s intervention.
That’s fantastic.
Now, did WVU lose some money? Absolutely. Probably seven figures, I bet, but not eight. It’s not fair to ask or expect IMG to pay an ordinary guarantee this first year because IMG is starting now what it should have started in January. That delay cost both WVU and IMG earning potential this first year. WVU will probably rely heavily on revenue sharing this first year. That’s a dent and while Team Raese played a part, let’s not forget WVU had something to do with it, too.
Onto the Feedback. As always, comments appear as posted. In other words, know when it’s time to go.
Mack said:
Now, let’s negotiate those Tier 4 rights.
Oh, indeed.
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