LOUISVILLE (WDRB) -- The prevailing opinion is that the University of Louisville and vice president for athletics Tom Jurich got a bargain in negotiating an $11 million exit from the American Athletic Conference. And that's correct, especially looking at the exit fees and legal costs other schools have faced. But U of L is giving the AAC far more than that.
While the school negotiated a favorable exit scenario in part because it maintained a good relationship with the conference and was open with league officials even when seeking a new home, it also benefited from leaving so much money on the table for AAC members.
For example, most of the money from last year's men's basketball championship season and the Final Four run in 2012 will stay with the AAC when U of L departs.
The way the NCAA disburses tournament earnings is to pay the conference a set amount per tourney game over a six-year span. Last season, the share was $245,550 per tournament game (capped once teams reach the Final Four -- there is no extra share for reaching the title game). That means U of L earned $1.227 million from last year's tournament, with that amount to be paid to its conference starting next April for the next six years, for a final total of $7.366 million.
U of L will get its yearly share next April, but after that, all those payments will go to the AAC, as will the remaining four payments from the 2012 tournament run, and six more shares earned over the previous three seasons -- plus any money from any NCAA Tournament run this coming March.
That means U of L will leave at least $13.1 million with the AAC, plus earnings from this season. Those figures are subject to final negotiation and many legal factors. Provision for determining those is in the "Revenue distribution" section of the exit agreement signed Wednesday. You can read it here.
In fact, through NCAA Tournament shares, U of L will be paying dividends for the American for years to come. And for U of L, the final outcome is hardly a loss. It may leave money on the table, but it will receive far more as an ACC member. The ACC disbursement once U of L joins is expected to top $20 million. It got between $6 million to $9 million in the Big East.
Leaving money behind for the league is standard practice -- Syracuse and Pittsburgh both walked away from NCAA Tournament shares, as did West Virginia.
WVU's $20 million settlement with the Big East included money left behind.
But WVU incurred heavy legal fees in negotiating its way out, and wasn't even a full financial member of the Big 12 when it did make the move, though the Big 12 did help with its exit fee.
An advantage of U of L's negotiated exit is that it avoided heavy legal fees, though it did retain the local firm of Wyatt Tarrant & Combs to consult with its in-house counsel in this negotiation.
One aspect that has yet to be addressed by U of L is where the final $6 million in exit fee money will come from. Other schools have shared the moving expenses between the university and athletics, but U of L officials say they were waiting to see what the exit agreement would be before discussing the source of funds.
U of L has agreed to pay $1.5 million per year to the AAC for each of the next four years.
It also has agreed to make "good faith efforts" to schedule AAC member schools in non-conference games in football and men's and women's basketball. Rick Pitino has announced that his program will continue its series with Memphis, while football has signed a home-and-home series with Houston.
U of L will leave the AAC officially on June 1, 2014. But it won't leave the conference empty-handed.
Tuesday, August 26 2014 10:16 PM EDT2014-08-27 02:16:12 GMT
Teddy Bridgewater says thank you to U of L students in an ad in its student paper. Eric Crawford photo.
Teddy Bridgewater had one more classy move for University of Louisville students and fans -- he said Thank You with an ad in the semester's first edition of The Louisville Cardinal student newspaper.More >>
Teddy Bridgewater had one more classy move for University of Louisville students and fans -- he said Thank You with an ad in the semester's first edition of The Louisville Cardinal student newspaper. More >>