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SBJ/November 10 - 16, 2003/This Weeks Issue
Rule shift helps 5 exiting C-USA
Published November 10, 2003
Big East members-in-waiting Cincinnati, DePaul, Louisville, Marquette and South Florida will get a break on their Conference USA exit fees because that league's reaction to the imminent departures was to make it easier, rather than harder, for schools to leave.
"Most policies are designed to deter people from leaving and punish them when they do," said Britton Banowsky, C-USA's commissioner. "That was certainly our former policy."
That policy, adopted when the conference was formed in 1996, required schools that gave a year's notice of leaving to pay a $500,000 exit fee plus television damages for the five-year period immediately after the school's withdrawal.
For the departing schools, particularly Louisville and Cincinnati, that amount could have been sizable. Although conference officials wouldn't speculate on damages to the television contract, industry sources estimated that the league's contract with ESPN could have been reduced by at least a couple million dollars.
In addition, the amount each school would have owed because of a drop in television revenue likely would have been determined in court, since there was no clear-cut way to determine television damages for each school.
Fortunately for those schools, C-USA presidents decided about a month ago to tweak the policy in an effort to reduce financial harm to both remaining and departing schools.
Under the new policy, the exit fee has been abolished, but schools leaving the conference have to agree to continue to put members of their former conference family on their football and basketball schedules for five years.
The scheduling rule was established as a way to limit negative effects on the league's eight-year television contract with ESPN, which began in the 2001-02 school year and paid the conference $8 million last year, according to the league's tax return.
Additionally, if the league's television contract is not adversely affected, the departing schools would receive money from the conference based on their earned units from participation in the Division I men's basketball tournament over the last six years. If the contract is negatively affected, the conference would keep that money.
Cincinnati, DePaul, Louisville, Marquette and South Florida collectively earned 22 units from 1997 to 2002, which are the years included in 2003 distribution. Each unit for this year's distribution was worth $130,000 for a total of $2.8 million.
The units earned by a school for its participation in the NCAA tourney stay with the conference in which those units were earned. They do not move with the school.
"The point here, I guess, is that the idea of deter and punish, in the context of conference realignment, is probably not as effective as the idea of support and mitigate harm," Banowsky said. "My experience is we're all better off trying to listen, communicate and understand each other's interests and develop strategies to accommodate those interests, as opposed to forcing outcomes."
Meanwhile, with five of its schools leaving for the Big East, Conference USA announced that Marshall, Rice, SMU, Tulsa and Central Florida had accepted its invitation to join.
The five new Conference USA schools will each pay an entrance fee of $1 million. The entrance fee for the new Big East schools was not revealed, though Big East Commissioner Mike Tranghese said the fee would not come from the schools, but would instead be deducted from each school's portion of conference revenue.