Here's how men's basketball game contracts have changed during the pandemic
Here's how men's basketball game contracts have changed during the pandemic
Some force majeure clauses have quadrupled in size, while financial guarantees are down by as much as 30 to 50 percent
Coming off of its national runner-up finish in men’s basketball in 2019, Texas Tech was willing to spend as much money on non-conference guarantee games, or “buy” games, as any program in the country last season. In a story I reported last winter that examined guarantee games in men’s basketball, in which I obtained nearly 600 non-conference game contracts in which one school paid another a financial guarantee, Texas Tech’s $115,000 guarantee paid to Houston Baptist was tied for the second-largest payout among the contracts examined. I found four Texas Tech opponents that received at least $100,000 for playing one game against the Red Raiders last season, even though $90,000 was the most common single-game guarantee in the sport.
However, in the 2020-21 season, it would take almost two full game guarantees from Texas Tech for some of the Red Raiders’s opponents to earn the $115,000 that Texas Tech paid Houston Baptist last season. This college basketball season, men’s basketball programs might be fortunate to receive anywhere close to the previously standard rate of $90,000 for a guarantee game, let alone six-figure payouts.
To examine how the COVID-19 pandemic and the resulting financial ramifications on college athletics have affected men’s basketball scheduling and athletic department budgets, Out of Bounds obtained non-conference and multi-team event (MTE) contracts involving schools from the A-10, ACC, Big 12, Big Sky, Conference USA, Horizon League, MAAC, MAC, MEAC, Ohio Valley Conference, SEC, Southern Conference, Southland Conference, Summit League and Sun Belt, all of which were signed or modified since the start of the pandemic, including contracts that were signed after the NCAA Division I Council approved a Nov. 25 start date for the college basketball season and a 27-game maximum for the regular season.
New financial realities
This season, the aforementioned, deep-pocketed Red Raiders are attaching non-conference game guarantees that are between 50 and 70 percent the size of the guarantees that Texas Tech paid last season. In four game contracts with opponents from the Southland Conference, Texas Tech agreed to pay Incarnate Word and Texas A&M Corpus Christi $65,000 apiece, while Abilene Christian and Northwestern State will each receive $60,000. Compared to the 594 game contracts I analyzed last season, a $60,000 guarantee would’ve ranked in the 38th percentile and a $65,000 payment would’ve been in the 40th percentile.
And once again, that’s coming from a Texas Tech program that arguably overpaid its non-conference opponents last season, compared to industry standards.
LSU’s contract with Louisiana Tech states that the financial guarantee will depend on the fan capacity inside LSU’s Pete Maravich Assembly Center. If the Tigers can have 100-percent capacity, the Bulldogs will receive $70,000. That amount is then prorated if the arena capacity is limited, such that Louisiana Tech would receive $52,500 if the arena capacity is 75 percent and $42,000 if capacity is capped at 60 percent.
The minimum guarantee Louisiana Tech will receive is $40,000, which would fall at the 33rd percentile of game guarantees among those obtained by Out of Bounds last season.
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West Virginia has implemented a similar clause in at least one of its game contracts, such that the game guarantee depends on the arena capacity.
Here are some examples of how game guarantees have decreased this season:
Cincinnati will pay Furman a guarantee of $60,000; in four non-conference game contracts from the 2019-20 season that were obtained by Out of Bounds, Cincinnati paid opponents a combined $355,000 in guarantees, or an average of $88,750. Furman’s $60,000 guarantee is roughly a 33-percent reduction from that average.
Saint Mary’s will pay Sacramento State a guarantee of $45,000; last season, Saint Mary’s paid game guarantees of $80,000 to Northern Illinois (Sacramento State will receive 43.7 percent less) and $70,000 to Cal Poly (Sacramento State will receive 35.7 percent less).
VCU will pay Youngstown State a guarantee of $80,000 this season; in seven non-conference game contracts obtained by Out of Bounds in which VCU paid a guarantee to an opponent last season, the Rams paid each of their opponents at least $85,000, and they paid an average of nearly $90,000. VCU paid a $100,000 guarantee to Florida Gulf Coast for a game last season.
West Virginia will pay Buffalo a guarantee of $30,000, plus $500 for each one percent of arena capacity allowed for fan attendance, such that 50-percent capacity would mean West Virginia would pay Buffalo an additional $25,000. In five non-conference game contracts from last season that were obtained by Out of Bounds, West Virginia paid opponents a combined $455,000 in guarantees, including $100,000 to Austin Peay, for an average of $91,000 per “buy” game opponent. That means if fans aren’t allowed for the Buffalo game, Buffalo would receive about 67 percent less than the average of what West Virginia’s 2019-20 opponents received.
A multi-team event with multiple versions of the contract. Would you trade a guarantee in 2020 for a home game in 2021?
In contracts signed in June and July, Youngstown State agreed to host Eastern Michigan, Niagara and SIU-Edwardsville in a four-team, three-game multi-team event on Nov. 27-29, but for what it’s worth, Youngstown State’s schedule only lists the game against SIU-Edwardsville right now.
Youngstown State’s contracts with Niagara and SIU-Edwardsville read identically. However, Eastern Michigan’s contract featured a different deal than the other two visitors.
Eastern Michigan will receive 75 complimentary tickets, compared to 50, but that’s far from the biggest difference. Eastern Michigan will also get a return game from Youngstown State in November 2021, which the other two schools didn’t receive, according to the terms of their contracts.
However, Eastern Michigan won’t receive the $40,000 guarantee, nor the 12 hotel rooms for three nights that Niagara and SIU-Edwardsville will receive from Youngstown State.
It’s an interesting trade-off: Increased short-term hotel costs and decreased short-term financial guarantees in exchange for a future home game, potentially when the country has a better handle on the pandemic, when Eastern Michigan could maximize its revenue from a home game with tickets, concessions and parking.
An Eastern Michigan associate athletic director for media relations was unable to comment on the differences in the school’s contract with Youngstown State, compared to the contracts signed by Niagara and SIU-Edwardsville.
Everyone’s favorite new phrase, ‘force majeure’
The phrase “force majeure,” of course, is neither new nor anyone’s favorite, except potentially for some legal counsels who might be able to use it to the benefit of their employers.
After taking five years of French, I can translate “force majeure” for you: a greater or superior force.
That’s the kind of hard-hitting legal analysis you get here.
The long and the short of it is that a force majeure clause is one that removes any liability from the parties involved in a contract due to extreme and usually unexpected circumstances. As you might expect, force majeure clauses in college athletics game contracts have recently gotten a lot longer – as is likely true of almost any contract signed since March within any industry.
Texas Tech’s force majeure clause for men’s basketball game contracts, which was previously labeled an “exigent circumstances” clause last season, is between three and four times longer this season.
Last season, Texas Tech’s exigent circumstances clause laid out the terms in which the contract would be canceled and both universities would then be freed from any liability, which included:
An act of God
Any legitimate conditions beyond control of the home team, provided the visiting team is notified of said conditions prior to arrival at the site of the contest
Below is a copy of Texas Tech’s exigent circumstances clause last season, which comes from its game contract with Houston Baptist. The university’s non-conference contracts both last season and this season also include a “cancellation clause,” which states in part that the agreement could be modified or canceled at any time “due to any circumstances beyond the control of either party.”
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This year, however, the list of events that would trigger a force majeure for a game involving Texas Tech include:
Act of God (including, without limitation, fire, explosion, earthquake, tornado, drought and flood)
War, act or threats of terrorism, hostilities (whether or not war be declared), invasion, act of enemies, mobilization, requisition, embargo
Rebellion, insurrection, military or usurped power, or civil war
Contamination or destruction from any nuclear, chemical or biological event
Riot, commotion, strikes, go slows, lock outs, or disorder
Epidemic, pandemic, viral outbreak, or health crisis
Directive of athletic conference or NCAA authority
Directive of governmental authority
The clause protects Texas Tech and its opponents from a number of potential doomsday scenarios, and it feels like the U.S. has experienced about half of them this year. In a year that has featured news coverage about “Murder Hornets” and deadly mosquitoes, on top of the pandemic, raging forest fires, hurricanes, the deployment of the National Guard and an alleged plot by militia members to kidnap a governor, it’s probably prudent for the legal departments at universities to be as thorough as possible when writing their force majeure clauses, even if they sometimes read like a book in the Old Testament, a chapter in an ancient history textbook or a synopsis of a season of 24.
This is what Texas Tech’s force majeure clause looks like for this season. It’s 14 lines long, after being roughly four lines long last season.
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The 10th clause in LSU’s game contracts, which is titled “Other conditions,” now includes:
Either party has the right to invoke force majeure and/or terminate the Agreement in the event that proceeding would be inconsistent with applicable national, state, or local health advisories or either school’s policies regarding business travel or attendance at large group gatherings, due to the global public health emergency cause by the novel coronavirus or its related illness, COVID-19. For the avoidance of doubt, declaring a force majeure event triggered by the new coronavirus or COVID-19 shall not be required to show that the event was unforeseeable.
That last line makes it clear that the potential affects of COVID-19 are so serious and so far-reaching, that even if an outbreak or other COVID-19-related event is considered “foreseeable,” the game contract can still be canceled without liability.
The exact same language – literally, word for word – exists in the “COVID Clause” of the contract signed between San Francisco and Sacramento State.
The force majeure clause in the contract signed between Saint Mary’s and Sacramento State in late August includes the phrases “sickness or death of key personnel” and “suspected contagions in its facilities,” which were unique phrases among the contacts examined.
Out of Bounds obtained seven non-conference game contracts for VCU last season that didn’t include a force majeure clause. VCU’s contract with St. Francis (PA) last season, which did include a force majeure clause, didn’t include pandemics, but they are included in VCU’s force majeure clause in its contract with Youngstown State for this season.
In a pair of contracts Murray State signed with Division II opponents Bethel University and Brescia University in August, prior to the NCAA’s announcement that the season would start on Nov. 25, the force majeure clause included “athletic program or applicable sport termination.” There was also an “NCAA Reclassification” clause that stated, “This agreement may be voided by either party, without penalty or damages, if either is reclassified to a different NCAA membership division after the contract has been executed.” While the game against Brescia is listed on Murray State’s schedule, the game against Bethel is not.
Surprisingly, not every game contract that was written since the start of the pandemic has included a force majeure clause. A contract between Milwaukee and North Dakota State, which was part of an MTE and entered into on May 15, didn’t originally include a force majeure clause.
A contract amendment that was produced on June 15 added:
“This Agreement is being signed by each party with full knowledge of the ongoing COVID-19 Pandemic. If this event is cancelled due to Pandemic related concerns, the Agreement is automatically terminated, no party will be considered to be in breach and there shall be no damages owed by either party, including any forfeiture amount and any financial guarantee schedule to be paid.”
North Dakota State signed both the original contract and the amendment on Sept. 1.
Agreed-upon testing measures
Hopefully the 2020-21 basketball season will be the only one in which clauses exist in game contracts that have names such as “Eligibility and athletic staff/student-athlete COVID-19 testing.” That’s the name of the 14th and final clause in Texas Tech’s non-conference game contracts.
The clause reads:
The eligibility of all players who are to participate in the Game(s) shall be determined by rules and regulations of the Big 12 Conference (“Big 12”), Southland Conference and the National Collegiate Athletic Association (“NCAA”). The Parties agree that all athletic staff and student-athletes attending the Game(s) will be tested prior to the Game(s) in accordance with NCAA Standards for Practice and Competition found at https://www.ncaa.org/sport-science-institute/resocialization-collegiate-sport-developing-standards-practice-and-competition and the Big 12 testing protocols.
Likewise, Texas’s game contract with UT Rio Grande Valley states that both teams will agree to comply with the COVID-19 testing protocols mandated by the University of Texas, the Big 12 and NCAA.
When Out of Bounds filed a public records request at Texas Tech for a copy of the Big 12’s testing protocols, a certified paralegal at the university responded that the university doesn’t have any responsive documents.
“TTU and the Big 12 do not have testing protocols specifically for men’s basketball,” the email response stated. “The Athletics protocols are constantly changing and cover all sports.”
It can be beneficial to have protocols that can adapt as doctors’ understanding of the virus evolves and if the spread of the virus changes in local communities, but they could also provide a moving target for the Big 12’s non-conference opponents as far as testing goes if the “protocols are constantly changing.”
CBS Sports’s Matt Norlander reported earlier in November that the Big 12’s testing protocols don’t line up with other major conferences and that the difference in protocols is why ESPN’s Orlando-based events were canceled.
In contracts Bowling Green signed with Appalachian State and South Carolina State in early August, the schools agreed that within 72 hours of the MTE, they will conduct COVID-19 tests for their athletes and staff members, then receive the results and confirm the negative tests with the opposing team. If anyone tests positive, the school will notify its opponent and “promptly remove the infected individuals from practice and competition, and ensure that such individuals have been isolated from the remaining student-athletes and staff to prevent the spread of infection.”
Buffalo’s contract with The Gazelle Group and the Basketball Hall of Fame for the Bulls’s participation in “Bubbleville” at Mohegan Sun states that the organizers are “responsible for COVID-19 testing and maintaining health and safety protocols consistent with NCAA guidelines and outlined in the Operations Manual provided to each participating school,” however, part of Buffalo’s $35,000 fee to participate in the event includes the cost of COVID-19 protocols.
Before Buffalo plays at West Virginia on Dec. 29, the Bulls must complete the Big 12’s SARS-CoV-2 Attestation form and submit it to the Mountaineers prior to the game.
If Buffalo can’t meet the testing requirements, the game is canceled and neither team is responsible for any damages.
Multi-team events in multiple locations
One multi-team event agreed to in early August features Appalachian State, Bowling Green and South Carolina State, with each school playing the other two schools – with one game at home and one on the road – over the course of six days. The contracts were agreed to prior to the NCAA’s announcement that the season would start on Nov. 25.
The three schools are in three different states, and even though Appalachian State and South Carolina State are located in neighboring states, the drive between the two campuses is roughly four hours.
Appalachian State agreed to host Bowling Green on Nov. 23 and the Mountaineers agreed to play at South Carolina State two days later on Nov. 25. The Bulldogs were scheduled to go to Bowling Green on Nov. 28.
According to the contract, Appalachian State wouldn’t receive any compensation from its two games, but South Carolina State would receive $50,000 from Bowling Green for its trip to Ohio, plus $10,000 to be used towards its travel and hotel costs.
While the contract between Bowling Green and South Carolina State was signed prior to the announcement about the delayed start to the season, the contract may have never technically been valid in the first place. One clause states, “This contract will be NULL AND VOID unless signed and returned via email … NO LATER THAN 8/24/2020.” It was signed by South Carolina State on Aug. 31, then signed by Bowling Green on Sept. 2.
The contract is arguably a fitting encapsulation of college basketball scheduling this year, when for one reason or another, game contracts have often been ripped up or have required a contract addendum, or sometimes, even an addendum to the addendum.
Recap of the last newsletter
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“We think the 65 schools that make up our conferences should take the lead in this effort. But we don’t think that it is advisable to brand this as an A5 effort – rather, we think it is very important to chart a course so that schools in other conferences could support us, and that the NCAA could support us.
“But notably, we don’t think Mark [Emmert] or the NCAA should be taking the lead in Washington.”
Read the full newsletter here.
Thank you for reading this edition of Out of Bounds with Andy Wittry. If you enjoyed it, please consider sharing it on social media or sending it to a friend or colleague. Questions, comments and feedback are welcome at andrew.wittry@gmail.com or on Twitter.