Motion to dismiss

[OrediggerPoke]

Part of me is worried that they will pull a CSU/UNC replay official move...where everything we can see tells us one thing but the ruling appears to be based on something else.

The cases will eventually settle. Either after the ruling on the Motions to Dismiss or after summary judgment rulings. These cases, when the relatively weak anti-trust arguments are dispensed with, comes down to pretty straight forward contract breach and remedy questions.

 

[ragtimejoe1]

PAC has a great legal argument. The law does not recognize penalties for contract breach. Liquidated damage clauses have to be a reasonable forecast of actual damages to be enforceable. I have yet to see a cogent argument as to why the poaching penalties and exit fees are not payments for the identical harm. Little chance do I see the damage clauses being enforced by a court in their entireties given this set of facts - - my 2 cents based on litigating similar cases.

Let's assume the tv numbers being floated are true then we are receiving 3-4 mill/team/year for poaching. We lose likely revenue from playoff and ncaa tourney.

I'm sure the losses could be quantified and likely exceed poaching penalties.

 

[OrediggerPoke]

Let's assume the tv numbers being floated are true then we are receiving 3-4 mill/team/year for poaching. We lose likely revenue from playoff and ncaa tourney.

I'm sure the losses could be quantified and likely exceed poaching penalties.

The legal question posed is whether the losses can be quantified to reasonably meet or exceed the combination of exit fees and poaching penalties. That’s a pretty big number. The MWC’s best argument (in my mind) is that the parties’ breach made the incentive payments to Air Force and UNLV critical in order to figure in those bonus payments as part of the MWC loss calculation and that those losses were not foreseeable at the time the exit fees were created but became foreseeable when the poaching penalty provisions were crafted.

 

[ragtimejoe1]

The legal question posed is whether the losses can be quantified to reasonably meet or exceed the combination of exit fees and poaching penalties. That’s a pretty big number. The MWC’s best argument (in my mind) is that the parties’ breach made the incentive payments to Air Force and UNLV critical in order to figure in those bonus payments as part of the MWC loss calculation and that those losses were not foreseeable at the time the exit fees were created but became foreseeable when the poaching penalty provisions were crafted.

The precedence on exit penalties is pretty solid. I'm betting the defectors are on the hook for most of the 85 mill.

I think you're right that the court might view the poaching penalty as double dipping a bit too much. I'm thinking MWC gets most if not all the exit penalties and the pac poaching is around 20 to 30 mill.

 

[OrediggerPoke]

The precedence on exit penalties is pretty solid. I'm betting the defectors are on the hook for most of the 85 mill.

I think you're right that the court might view the poaching penalty as double dipping a bit too much. I'm thinking MWC gets most if not all the exit penalties and the pac poaching is around 20 to 30 mill.

It is black letter law that you cannot collect full damages from separate sources for the same harm to receive a windfall just because multiple parties might be liable. MWC has to basically prove 2 things: (1) that the combination of exit fees and poaching penalties is a reasonable estimate of actual harm; and (2) that there was some intervening event or change of circumstances which would justify the MWC to seek additional damages from a separate source for a harm that was presumably figured into the original exit fees determination (my suggestion is that the MWC ceasing to exist only became foreseeable after the PAC blew up and after the exit fees were already in place and then the need for additional penalties to mitigate this additional risk/harm).

 

[ragtimejoe1]

It is black letter law that you cannot collect full damages from separate sources for the same harm to receive a windfall just because multiple parties might be liable. MWC has to basically prove 2 things: (1) that the combination of exit fees and poaching penalties is a reasonable estimate of actual harm; and (2) that there was some intervening event or change of circumstances which would justify the MWC to seek additional damages from a separate source for a harm that was presumably figured into the original exit fees determination (my suggestion is that the MWC ceasing to exist only became foreseeable after the PAC blew up and after the exit fees were already in place and then the need for additional penalties to mitigate this additional risk/harm).

I'm guessing that's exactly what they argued and that exit penalties protect against an industry standard of losing a team or a few teams. When salvaging a conference already on a shoestring budget due to extreme poaching, the cost is higher.

I think that's actually a pretty solid argument. 55 mill higher? We'll see.

A couple other thoughts. There was a clause that the pac12 and mwc would negotiate in good faith for all mwc teams to enter the pac with no poaching or exit penalties. The pac had a contractual way out of poaching fees.

What's the scheduling shuffling cost? I know they paid 14 mill or something but we also gave them what, 16 games?

 

[OrediggerPoke]

I'm guessing that's exactly what they argued and that exit penalties protect against an industry standard of losing a team or a few teams. When salvaging a conference already on a shoestring budget due to extreme poaching, the cost is higher.

I think that's actually a pretty solid argument. 55 mill higher? We'll see.

A couple other thoughts. There was a clause that the pac12 and mwc would negotiate in good faith for all mwc teams to enter the pac with no poaching or exit penalties. The pac had a contractual way out of poaching fees.

What's the scheduling shuffling cost? I know they paid 14 mill or something but we also gave them what, 16 games?

I think the schedule shuffling cost is mostly a red herring, relative peanuts and I doubt the MWC would focus on that with attempts to recover the poaching penalties. As you indicate, the MWC was paid to play those games.

 

[PorkerPoke]

PAC has a great legal argument. The law does not recognize penalties for contract breach. Liquidated damage clauses have to be a reasonable forecast of actual damages to be enforceable. I have yet to see a cogent argument as to why the poaching penalties and exit fees are not payments for the identical harm. Little chance do I see the damage clauses being enforced by a court in their entireties given this set of facts - - my 2 cents based on litigating similar cases.

That’s what I was thinking when Canzano said the tables could be turned and the pee12 is told to pay so they just appeal with “new evidence” that the MWC charged them too much to play teams like “CSU and Wyoming” (Canzano himself said CSU wasn’t worthy) and should get a triple value damages for suffering through the greed of the MWC charging $2 million per game when the opponents were only worth $500,000. ((1,500,000 x 12) x 3) = $54,000,000.

Based on this the judge’s decision could be the pee12 has no legal basis to reject the contract as is and the MWC collects, the pee12 and MWC get nervous call a truce and settle for an undisclosed sum or the pee12 is legally vindicated and pounds the MWC membership into financial submission in violation of the new MWC GOR releasing all GOR signees as in UNLV who they covet. The MWC will be left to rebuild the best they can.

One argument I would make is the MWC determined the value of teams and the media future in the poaching contract. The pee2 broadcast loud and clear they were forming the highest value conference that would be on the verge of competing with the B12. They acknowledge they are pursuing value and even wrote into the signed pee12 GOR’s a willingness to pay a portion (redacted) of the MWC exit fees the same traitors voted in to stopping SDSU from leaving.

There is a lot of MWC argument and this time for the pee12 it’s not pursuing assets left behind by the quitters, it’s about not paying for the cost to pursue new members from elsewhere. The issue is the P4 conferences could pay the penalties so nothing was a big financial issue for the return on investment. In this case if the pee12 has to pay the penalties the costs keep them firmly as a struggling G5.

The MWC almost got screwed by the WAC and surrounded themselves with an expensive G level wall. The pee12 still thinks they are a P level conference but they don’t have the money as they rebuild off the riches left behind with WSU a financial nightmare. They have to prevent paying as much as possible by manipulating every last legal maneuver they can. Maybe this backfires on them because the MWC was prepared. Do not forget Gloria had a background with the pee12 and knows how they have been thinking for years.

I’m thinking this may well end up with the MWC getting the low end of desired penalty income and both conferences move on. The pee12 has to destroy the MWC and taking UNLV is the prize. I think UNLV has always been the unspoken negotiating chip and it will cost the $18 million to get them for 2027 unless they win substantially reduced exit fees (under $10 million is where the pee12 needs to be financially).

The MWC either has some leverage or mistakenly thinks they do and will get nothing.

I can’t go with the pee12 winning everything.

 

[PorkerPoke]

I think the schedule shuffling cost is mostly a red herring, relative peanuts and I doubt the MWC would focus on that with attempts to recover the poaching penalties. As you indicate, the MWC was paid to play those games.

Canzano thinks this red herring is a potential damages windfall for the pee12.

 

[OrediggerPoke]

That’s what I was thinking when Canzano said the tables could be turned and the pee12 is told to pay so they just appeal with “new evidence” that the MWC charged them too much to play teams like “CSU and Wyoming” (Canzano himself said CSU wasn’t worthy) and should get a triple value damages for suffering through the greed of the MWC charging $2 million per game when the opponents were only worth $500,000. ((1,500,000 x 12) x 3) = $54,000,000.

Based on this the judge’s decision could be the pee12 has no legal basis to reject the contract as is and the MWC collects, the pee12 and MWC get nervous call a truce and settle for an undisclosed sum or the pee12 is legally vindicated and pounds the MWC membership into financial submission in violation of the new MWC GOR releasing all GOR signees as in UNLV who they covet. The MWC will be left to rebuild the best they can.

One argument I would make is the MWC determined the value of teams and the media future in the poaching contract. The pee2 broadcast loud and clear they were forming the highest value conference that would be on the verge of competing with the B12. They acknowledge they are pursuing value and even wrote into the signed pee12 GOR’s a willingness to pay a portion (redacted) of the MWC exit fees the same traitors voted in to stopping SDSU from leaving.

There is a lot of MWC argument and this time for the pee12 it’s not pursuing assets left behind by the quitters, it’s about not paying for the cost to pursue new members from elsewhere. The issue is the P4 conferences could pay the penalties so nothing was a big financial issue for the return on investment. In this case if the pee12 has to pay the penalties the costs keep them firmly as a struggling G5.

The MWC almost got screwed by the WAC and surrounded themselves with an expensive G level wall. The pee12 still thinks they are a P level conference but they don’t have the money as they rebuild off the riches left behind with WSU a financial nightmare. They have to prevent paying as much as possible by manipulating every last legal maneuver they can. Maybe this backfires on them because the MWC was prepared. Do not forget Gloria had a background with the pee12 and knows how they have been thinking for years.

I’m thinking this may well end up with the MWC getting the low end of desired penalty income and both conferences move on. The pee12 has to destroy the MWC and taking UNLV is the prize. I think UNLV has always been the unspoken negotiating chip and it will cost the $18 million to get them for 2027 unless they win substantially reduced exit fees (under $10 million is where the pee12 needs to be financially).

The MWC either has some leverage or mistakenly thinks they do and will get nothing.

I can’t go with the pee12 winning everything.

Mostly red herrings that courts will largely ignore/dispense with quickly. Outside of the anti-trust claims and defenses, these aren't that complex of cases as far as the legal issues and what evidence is relevant (i.e. how much was the MWC damaged and what would have bee a reasonable estimate of damages when the exit fees and poaching penalties were agreed to).

 

[OrediggerPoke]

Canzano thinks this red herring is a potential damages windfall for the pee12.

I would put exactly no credibility in the legal advice of a sports writer with no legal training and a degree in English from Chico State. I am sure he generates listeners but he has no clue what he is talking about nor a basis to actually comprehend the legal procedure and contractual issues.

 

[OrediggerPoke]

That’s what I was thinking when Canzano said the tables could be turned and the pee12 is told to pay so they just appeal with “new evidence” that the MWC charged them too much to play teams like “CSU and Wyoming” (Canzano himself said CSU wasn’t worthy) and should get a triple value damages for suffering through the greed of the MWC charging $2 million per game when the opponents were only worth $500,000. ((1,500,000 x 12) x 3) = $54,000,000.

Also - there really is no such thing as 'new evidence' on appeal. By the rules of civil and appellate procedure, appellate review is limited to the evidence in the record from the trial court. To the extent 'new evidence' is discovered or revealed following trial court decision (unless previously unlawfully withheld), the appellate court cannot even review such new evidence.

 

[Bear Claw]

I am far from a legal expert and extremely skeptical of our legal system. I cannot help but wonder if the P-12 will somehow line the pockets of the presiding judge to get a ruling in their favor.

As bias as I am, I also know contracts were signed and agreed to by all parties involved. It’s comical to me that you can try to break a contract when the terms you were in favor of all of the sudden become detrimental.

I don’t like delays or kicking the can down the road because you don’t want to be the judge who has to be the bearer of bad news.

 

[OrediggerPoke]

I am far from a legal expert and extremely skeptical of our legal system. I cannot help but wonder if the P-12 will somehow line the pockets of the presiding judge to get a ruling in their favor.

As bias as I am, I also know contracts were signed and agreed to by all parties involved. It’s comical to me that you can try to break a contract when the terms you were in favor of all of the sudden become detrimental.

I don’t like delays or kicking the can down the road because you don’t want to be the judge who has to be the bearer of bad news.

Outside of extremely rare circumstances, judges in our legal system are not 'bought off.' The overwhelming majority take their ethical responsibilities very seriously.


It’s also worth noting the difference between performing a contract and the remedies for breach of a contract. Here, no one seems to dispute that a breach occurred — the disagreement lies in what damages, if any, are appropriate.


For a simple illustration: imagine you rent a car for a day at $100. The contract also states that if you return the car more than 30 minutes late, you must pay $1,000,000. While the late return is clearly a breach, a court would not enforce the $1,000,000 clause because it’s grossly disproportionate to the actual value at stake. Instead, the court would look at the real damages caused by the late return — for example, the lost use of the car for a day.


In other words, courts don’t allow contract terms to become punitive windfalls. They focus on ensuring the remedy matches the actual harm.

 

[WYOFLETCH]

PAC has a great legal argument. The law does not recognize penalties for contract breach. Liquidated damage clauses have to be a reasonable forecast of actual damages to be enforceable. I have yet to see a cogent argument as to why the poaching penalties and exit fees are not payments for the identical harm. Little chance do I see the damage clauses being enforced by a court in their entireties given this set of facts - - my 2 cents based on litigating similar cases.

I think they have a really bad case here. They signed a legally binding agreement with the MW when they scheduled games last year. Part of that agreement was that they would pay a monetary penalty for adding schools without taking everybody. Now they’re mad they signed that deal, but I think they’re gonna have a real hard time arguing their way out of this one. They could have signed an agreement with the MAC, CUSA, AAC, or American and they didn't. I think its gonna be tremendously difficult for them to prove they signed the contract under duress. The pac12 didn’t have to sign a scheduling agreement and could have cobbled together a schedule for a year by reaching out to individual teams(not tremendously different from notre dame, Uconn, Umass, Army and recent Indy programs)

 

[OrediggerPoke]

I think they have a really bad case here. They signed a legally binding agreement with the MW when they scheduled games last year. Part of that agreement was that they would pay a monetary penalty for adding schools without taking everybody. Now they’re mad they signed that deal, but I think they’re gonna have a real hard time arguing their way out of this one. They could have signed an agreement with the MAC, CUSA, AAC, or American and they didn't. I think its gonna be tremendously difficult for them to prove they signed the contract under duress. The pac12 didn’t have to sign a scheduling agreement and could have cobbled together a schedule for a year by reaching out to individual teams(not tremendously different from notre dame, Uconn, Umass, Army and recent Indy programs)

They don’t need to prove duress to prevail. Duress isn’t considered in the analysis of whether a liquidated damages clause is grossly disproportionate to the actual harm.

 

[WYOFLETCH]

They don’t need to prove duress to prevail. Duress isn’t considered in the analysis of whether a liquidated damages clause is grossly disproportionate to the actual harm.

So my limited understanding is if Duress is not used (which I believe they don't have a duress case)

Liquidated damages and proportionality will be used

• What liquidated damages are: These are damages whose amount is specified in the contract itself for a particular breach. For the clause to be enforceable, it must be a reasonable pre-estimate of the actual damages that would be difficult to calculate at the time of the contract.
• The proportionality test: Courts examine whether the agreed-upon amount is so "extravagant" or "grossly disproportionate" to the anticipated or actual harm that it amounts to an unenforceable penalty.
• Factors in the proportionality test: The focus of this test is on the reasonableness of the damage amount, not on the circumstances surrounding how the parties negotiated or agreed to the amount. This is where it diverges from a direct consideration of duress.

I believe that amount is specified was reasonable, and the offer of merging all MWC members or paying the penality was left up to the PAC-12 to make, no one forced them to only take 5. If they only offer 5 members, the $55M is very reasonable. The $55M agreed upon fee is just a drop in the bucket of total damages caused by offering those members to join PAC12 especially when you consider the Pac12 new media deal is 10M per mbr per year and the MWC is only 3.5M per team per year. that number could be higher, so the amount is not extravagant and as the tv contracts are still being negotiated the amount is reasonableness to the actual damage amount that MWC will see.

 

[PorkerPoke]

It’s also worth noting the difference between performing a contract and the remedies for breach of a contract. Here, no one seems to dispute that a breach occurred — the disagreement lies in what damages, if any, are appropriate.

Thanks for your information.

The issue is definitely over how much the entity who breached the contract will pay.

This case is only the poaching penalty case for $55 million. The $90 million case is in Colorado district court so it would be separate although perhaps influenced by this case - is that correct?

It seems like I heard or read that the pee12 basically was in the under 40% rate in mediation whereas the MWC was like 80%. It might have been all pure speculation.

I would like to see both cases dismissed with the MWC awarded at least 75%. It would cover the GOR and pay a little more than the minimums. Anything under 60% does leave a measurable damage to the MWC. This is the rumor that has been stated how the pee12 want to financially ruin the MWC.

I like the fact Gloria has a law degree and the Nevada president is a former federal judge. It makes me more confident is not completely at the mercy of a hired 3rd party with a big interest in compensation.

 

[PorkerPoke]

I believe that amount is specified was reasonable, and the offer of merging all MWC members or paying the penality was left up to the PAC-12 to make, no one forced them to only take 5. If they only offer 5 members, the $55M is very reasonable.

Don’t know if the pee12 GOR can be considered with the valuation argument but here is what they have in that document:

* Any school leaving for a Power 4 conference must give at least one year's notice and pay an exit fee equal to two times the Pac-12's average conference distribution; that "A4 Exit Fee" could be lowered based on when the exit takes place

* A school can withdraw without penalty to join a Power 4 school upon the expiration of the grant of media rights, but if it joins a non-Power 4 conference upon that expiration, it would owe the Pac-12 three times the average conference distribution with more than a year's notice and six times that fee with less than a year's notice.

Doesn’t that basically say the pee12 has set exit fees even higher than the MWC and explicitly penalizes a move considered lateral?

If their own GOR openly spells out costly fees especially to a G level conference (mainly back to the MWC) doesn’t it make their argument they were taken advantage of by a lesser value conference somewhat contradictory?

The MWC distributed between 5-7 million in 2023. Applied to the pee12 rules that would be $15-21 million with a 1 year notice. The distributions are projected to be even higher in the pee12.

Can the MWC use the pee12’s own words if this goes to trial to counter the “unfair and excessive” claims?