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June 13, 2012

Big East Lawsuits and Searches

Filed under: Big East,Conference,Money — Chas @ 9:35 am

As much as I am looking forward at the ACC and things Pitt will be wading into, there are still things happening in the Big East worth noting.

Starting with the Big East involved with another lawsuit against a (not really) former member. This time, though, the Big East filed first. They are suing TCU for $5 million.

The lawsuit also contends that TCU athletic director Chris Del Conte “publicly acknowledged TCU’s contractual obligation to compensate the Big East for its refusal to join the conference” on Oct. 11, 2011, at a news conference announcing that TCU would join the Big 12 instead.

In the lawsuit, the Big East says it has “made demand for the payment”, but that TCU has refused.

When I first saw a wire story on the lawsuit, I was confused. I didn’t know over what the Big East was suddenly suing TCU for another $5 million. The surprise is that TCU has yet to give the Big East the money. When TCU bailed on joining the Big East, TCU and the Big East acknowledged the $5 million exit fee. I think most people assumed TCU cut the check and CYA.

Instead the Horned Frogs never actually gave the money and 8 months later express shock over the lawsuit.

“TCU administrators were surprised by this lawsuit and believe it is premature. The University is hopeful for an amicable resolution of this matter,” the school said in a statement. “Because of the pending litigation, TCU will have no further comment.”

My guess is that it is more of timing issue. The Big East wants its money now. TCU’s athletic department may have simply wanted to wait longer to pay it out, try and get a loan from the Big 12, or see if they could force the figure downward. Can’t really fault the Big East for this one. Here’s a PDF of the actual complaint if you are curious.

This on the other hand, is just so Big East. Their search for a new commissioner. Unsurprisingly, they hired the search from from which their interim commissioner Joe Bailey worked (hey, it worked for the Big 12 under Chuck Neinas), Russel Reynolds Associates.

Given the problems of the conference. The fragmentation. You would imagine, like the Big 12 they need to find a strong leader. Someone who can get everyone to work together. To unite so that they won’t keep their petty interests that constantly divide and undermine the conference. A strong leader who can get things done, especially in a conference that will have so many members that simply building a consensus is unlikely. The reasons that led John Marinatto to his doom included the fact that he wasn’t a strong enough leader.

Among the characteristics the next commissioner should have, according to RRA, include strong interpersonal skills, a servant leadership style, exposure to the media, superb managerial skills and a fabulous communicator. Experience negotiating with television networks is not essential, but can be learned.

“Servant leadership style?” There is nothing about that phrase that rings of strong leader. Sure enough, it isn’t.

Larry C. Spears, who has served as President and CEO of the Robert K. Greenleaf Center for Servant Leadership since 1990, has extracted a set of 10 characteristics that are central to the development of a servant leader:

  • Listening: Traditionally, and also in servant leadership, managers are required to have communication skills as well as the competence to make decisions. A servant leader has the motivation to listen actively to subordinates and support them in decision identification. The servant leader particularly needs to pay attention to what remains unspoken in the management setting. This means relying on his inner voice in order to find out what the body, mind and spirit are communicating.

  • Persuasion: A Servant Leader does not take advantage of their power and status by coercing compliance; they rather try to convince those they manage. This element distinguishes servant leadership most clearly from traditional, authoritarian models and can be traced back to the religious views of Robert Greenleaf.

  • Stewardship: CEOs, staffs and trustees have the task to hold their institution in trust for the greater good of society. In conclusion, servant leadership is seen as an obligation to help and serve others. Openness and persuasion are more important than control.

Basically they want Marinatto 2.0.

The Big East. The purgatory of football programs.





Servant leader ??? See ya big least Hail to Pitt

Comment by 63Team 06.13.12 @ 11:30 am

Hope I’m not ruffling a few feathers but as an analogy of a Pgh organization, I equate the BE to WPAHS … lots of inbreeding and internal conflict to the point where it’s almost too late (and maybe it is) … whereas UPMC is the B10, SEC, B12 (take your pick)

Comment by wbb 06.13.12 @ 12:44 pm

The BE had to sue TCU to bring all the interested parties together –Pitt, TCU and to a lesser extent , Syracuse.

Recall that one of Pitt’s allegations against the BE is its failure to secure exit fees from TCU, thus either harming Pitt financially by depriving it of a share of the buyout, OR evidencing the acceptance by the BE that exit fees aren’t real.

They will try to consolidate the suit against TCU with the one filed by Pitt and which the BE seeks to transfer to federal court. That would be the strategic move the Post Gazette is still trying to comprehend.

It really means a settlement in Pitt’s exit for 2013 is one step closer to reality.

Comment by SFPitt 06.13.12 @ 8:39 pm

SFPitt,
Pitt did not allege that the BE “failed to secure exit fees from TCU”. Quite the contrary. Pitt’s claim against the BE states that the BE allowed TCU to leave the BE without complying with the requisite 27 month advance notice period, thereby causing harm to Pitt. Pitt’s alleged damages arise by virtue of the (i) amounts initially paid to get out of their game with CFU in order to make room on their schedule for TCU, (ii) lost revenue from not playing TCU, and (iii) additional costs incurred to find a replacement for the TCU game. Separate and apart from these, Pitt also claims a right to receive their proportionate share of the TCU (and WVU) exit fees which the Pitt complaint assumes has or will be paid to the BE.

Comment by Financepro 06.14.12 @ 9:06 am

financepro–I would hope that Pitt’s $5 million exit fee would be reduced by the sum of Pitt’s costs and its share of the TCU & WVU exit fees.

Or, more likely, those costs could be considered sufficient for the BE to waive any additional fees above and beyond the $5 million that might otherwise be due to allow Pitt’s exit prior to the required 27 month period. I would presume that something along these lines is what will be negotiated toward arranging for a settlement to the lawsuit vs the BE.

Comment by pitt1972 06.14.12 @ 11:28 am

Finance Pro:
What is the difference in dollars between TCU leaving in 2012 versus leaving in 2014?

Comment by SFPitt 06.15.12 @ 10:29 pm

SFPitt:
Sorry. Not sure I understand your question.
Difference to whom?

If TCU leaves in 2014 instead of 2012, then the difference to Pitt is substantial in that Pitt would not have incurred the canceled game related losses (over a half million dollars) (and that would weaken Pitt’s litigation claim against the BE.) Also, Pitt would not be entitled to it’s share of the TCU exit fee in 2014 because it would no longer be a member of the BE.

The difference to TCU with respect to the Big East is anywhere from zero to $5 million. Under the old BE rules they are required to pay the same $5 million exit fee regardless of what year they exit. Half is payable up front and half when you leave. So $5M is payable either way. The newly reconfigured BE teams have been asked to up the exit fee to $10M going forward but that policy was contingent upon certain additional schools (one of which I believe is Navy) joining the BE. So I don’t know if that policy was actually implemented although I suspect not as of this moment.

Of course all of this is chump change if you compare the difference between what the BE currently pays each fb school vs. what the Big12 pays it’s members. So it was a no brainer for TCU to leave immediately, even if their share of the Big12 pie is phased in, as has been rumored.

Comment by Financepro 06.16.12 @ 6:29 am

[…] That is when they can find a commissioner that fits what they want. […]


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