Fiduciary Duty of Conference Member

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Duster
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Fiduciary Duty of Conference Member

Post by Duster »

With Fresno State's and Nevada's departure, the topic of filing suit has come up.

FYI, here's a law review note (researched and written by a smart law student) in the Boston College Law Review from 2006 which explored the fiduciary duties of conference members. This analyzed the departure of certain Big East members to the ACC and the litigation that followed:

http://lawdigitalcommons.bc.edu/cgi/vie ... ntext=bclr

The bottom line seems to be that conference board members (i.e., university presidents) have fiduciary duties which conflict with their fiduciary duties to their institution, and the best way address departures is by imposing a withdrawal fee.

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Re: Fiduciary Duty of Conference Member

Post by beegpk »

Duster wrote:With Fresno State's and Nevada's departure, the topic of filing suit has come up.

FYI, here's a law review note (researched and written by a smart law student) in the Boston College Law Review from 2006 which explored the fiduciary duties of conference members. This analyzed the departure of certain Big East members to the ACC and the litigation that followed:

http://lawdigitalcommons.bc.edu/cgi/vie ... ntext=bclr

The bottom line seems to be that conference board members (i.e., university presidents) have fiduciary duties which conflict with their fiduciary duties to their institution, and the best way address departures is by imposing a withdrawal fee.

Boston College Law Review article defending the defection of Boston College from the Big East

seems a bit self-serving ---- gives the appearance of an academic conflict of interest

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Re: Fiduciary Duty of Conference Member

Post by Duster »

I agree that you have to consider the source. However, this would be a way to evaluate the opposing view.

Colleges have changed conference affiliations many times. The Miami and BC move to ACC is different from the ones involving the WAC because the Big East was concerned about its BCS status and the millions that would be lost if it became a "mid major."

The withdrawal or exit fee in the 8/13 WAC Resolution was included to avoid the problem of determining the amount of actual damage was or will be caused as a result of a defection (which was an issue in that Big East suit against Miami and BC. Someone from the WAC applied the lesson learned there. It did not stop FSU or UNR because the signing of a contract with BYU is a condition. That's where WAC failed to me. That and contacting UNLV and/or SDSU before BYU signed.

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Re: Fiduciary Duty of Conference Member

Post by beegpk »

I am still waiting for all the facts to come out .... nonetheless ...

the MWC would not have extended its offer to Fresno State if Fresno State did not create the conditions for this to happen

Fresno State collaborated with other WAC members to bring BYU to the WAC --- if you start with the premise that Fresno State was one of the key players in setting up this deal and then benefited to the detriment of the less powerful members by cutting and running right after creating the conditions to convince them all to sign on --- it sure looks like they acted in bad faith

this particular kind of bloodied-hands back-stabbing may be unprecedented --- if someone knows of a similar set of circumstances from the past --- feel free to post it

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Re: Fiduciary Duty of Conference Member

Post by bungahead »

beegpk wrote:I am still waiting for all the facts to come out .... nonetheless ...

the MWC would not have extended its offer to Fresno State if Fresno State did not create the conditions for this to happen

Fresno State collaborated with other WAC members to bring BYU to the WAC --- if you start with the premise that Fresno State was one of the key players in setting up this deal and then benefited to the detriment of the less powerful members by cutting and running right after creating the conditions to convince them all to sign on --- it sure looks like they acted in bad faith

this particular kind of bloodied-hands back-stabbing may be unprecedented --- if someone knows of a similar set of circumstances from the past --- feel free to post it

. . . happens every day around the world. . . but, in this particular case, I'm pretty sure FSU did it to mess with you . . . so, I agree. That's really, really bad. . .

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Re: Fiduciary Duty of Conference Member

Post by beegpk »

bungahead wrote: ... happens every day around the world.. . .
NCAA football conferences which are the topic of this forum discussion only exist in the United States

bungahead wrote: . . . but, in this particular case, I'm pretty sure FSU did it to mess with you . . . .
using sarcasm to try to belittle others in a discussion can end up with you sounding like a befuddled idiot yourself

I am not suggesting that you are a complete befuddled idiot --- but you do know that your actions can speak for themselves

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Re: Fiduciary Duty of Conference Member

Post by Garret »

Duster,

UNLV and/or SDSU might not have been the leak to the MWC. It seems that the WAC feels that someone in C-USA's office tipped off the MWC's commissioner. When the MWC met with the C-USA last week, numerous articles discussed how the commissioners of the MWC and C-USA were close friends and longtime colleagues. So, with the MWC and C-USA discussing multiple partnership/teaming opportunities, isn't it feasible that the C-USA's commissioner let his good friend Craig Thompson know about what Karl Benson told him?

Karl Benson told UTEP that the WAC wanted to trade UTEP with La Tech after BYU joined the WAC, and Benson hinted to UTEP that other teams would be joining the WAC also. Wasn't that enough information to get the MWC to prepare to defend itself, especially since the other teams weren't coming from C-USA so they could only have been coming from the MWC? The WAC says that "protocol" made Benson tell C-USA about the WAC's plans (did the MWC follow that protocol? did the WAC follow protocol and tell the MWC anything?)...so, it appears that the WAC itself thinks that *Karl Benson* was the source that let C-USA know, and the WAC feels that C-USA told the MWC.

Protocol dictated that Benson notify C-USA, which Benson did, calling commissioner Britton Banowsky and informing him of the conversation and possible changes. It was someone at C-USA, people involved surmise, who might have tipped Thompson about the rapidly accelerating moves afoot.
http://www.staradvertiser.com/sports/sp ... z0y0IIq07Z

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Re: Fiduciary Duty of Conference Member

Post by bungahead »

beegpk wrote:
bungahead wrote: ... happens every day around the world.. . .
NCAA football conferences which are the topic of this forum discussion only exist in the United States

bungahead wrote: . . . but, in this particular case, I'm pretty sure FSU did it to mess with you . . . .
using sarcasm to try to belittle others in a discussion can end up with you sounding like a befuddled idiot yourself

I am not suggesting that you are a complete befuddled idiot --- but you do know that your actions can speak for themselves

Calling it "bloodied-hands back-stabbing" is just kinda funny since it's such a self centered perspective.

Read this morning's paper. Jim Donovan was shopping UH + travel subsidies to the PAC-10 in February.

In July and right up until Agusut 18, Benson was having secret discussions to give BYU a place to land after bolting the MWC.

During the same tirme frame, the WAC's grand scheme was to steal away UNLV and San Diego St. from the MWC once it had BYU locked up.

I don't know to what extent Donovan informed the rest of the WAC that he was pitching UH to the PAC-10, but appears pretty clear that Benson and the rest of the WAC were scheming to take part of BYU, and all of UNLV and SDSU WITHOUT consulting the MWC.

Is the WAC more moral because its treachery and scheming DIDN'T WORK????

Even if it did work, somehow, (actually, I know how) I get the feeling you would look at a WAC coup as a great thing, and in no event a bloody back stabbing by the WAC, BYU, SDSU or UNLV. .

And, I'm not so certain at all that FSU and Nevada's leaving immediately after receiving an invitation was so surprrising, now was it? Isn't that the REASON the so called "loyalty pledge" was sought in the ffirst place??? Because the WAC and BYU were worried that any one of the WAC's members might bolt if other opportunities came up?

But ultimately, it's not like the WAC brain trust could've been in any way surprised that one or even many members might bolt in the near future. They were clearly aware that it was looming and/or possible. They put a price tag on what would happen IF BYU did a deal with the WAC. They - these Presidents of Universities - said, "This could happen. If it does, we want $5 million FROM THE FIRST TEAM to leave. After that, EVERYBODY IS A FREE AGENT. "

So, the price was set . . . so, at the very least, how can the WAC if something happens that triggers an event it itself has put a price tag on?

The WAC itself reduced what's happened - in advance - to dollars and cents. How can it now legitimately make a morality argument?

Only, maybe even the price tag and obligation to pay is not set in stone like Benson has tried to suggest. On one hand, there appears to be some question as to whether or not everybody signed the dang loyalty pledge, or even voted on it. Nevada supposedly didn't sign, and BSU (still a full member of the WAC) was excluded from any discussions (in fact, there appear to be emails that suggest part of the WAC's activities were designed to leverage and/or punish BSU. At the very least, one of the primary WAC negotiator appeared to take glee in the discomfort WAC treachery might bring to BSU). There is also a MAJOR contingency that must be fulfilled by September 1 in order for the loyalty pledge penalty provision to be effective (if at all), but to my knowledge has not been fulfilled yet. And, there are still other questions about enforceability. The analogy is this: You go to your softball team and say, "hey, MAYBE we can get this really good guy, but he won't come unless we all agree we won't leave the team to join another team. So, we all have to agree that we'll stay members of this team, and the first guy to leave has to pay $5,000.00" Fair? Enforceable? I dunno. But, I do know it's absolutely silly to cry foul if one of the players ends leaving. What only makes sense is that the team hope and pray that it can get $5,000 and go eat with it.

Also, they were clearly aware that a deal with BYU wasn't a slam dunk either. That's why there's a contingency in there. Whatever the REASONS BYU doesn't eventually sign up, if they do not, then the $5 million also flies out the window. That's what the loyalty pledge says. But, the fact that it says that also makes clear that the WAC and it's genius board also knew that BYU might not sign up. . . to me, it's kinda hard to equitably hold any existing WAC members in a holding pattern based on a maybe, especially when there might be a fuse on other offers (as no doubt there was on the MWC offer). Everything I've read indicates that there is no question that and MWC membership is worth way more than a WAC membership, both in real dollars and potential for BCS AQ status. So, it seems to me that confronted with a maybe/maybe not, and DEFINITELY the ability to split the $5 million penalty (with the MWC's help in paying it to boot), FSU and Nevada admins. had almost no choice but to go to the MWC. THEY COULD EASILY HAVE BEEN ACCUSED OF BETRAYING THE BEST INTERESTS OF THEIR SCHOOLS HAD THEY NOT ACCEPTED THE INVIITE FROM THE MWC.

The real problem here is that the WAC has been a leftover league since the MWC guys bolted way back when. And, considering the teams in the MWC and the WAC together, in the college sports galaxy, the group is closer to the bottom than the top - with the WAC alone (absent BSU) clearly further down than the MWC. Compound that with the WAC's clear ineptitude (evidenced by its ability to concoct contingency and loophole filled loyalty pledges), and you've got what you've got. Add in UH's current positioning with respect to shifting attitudes (it ain't geography, it's the shifting attitudes ABOUT the geography) and the economic realities, and UH and its fans are in a very, very bad place.

But, "bloodied-hands back-stabbing"?????? If UHAD, UH upper campus, and the WAC in particular is so naive and inept that it can only look at this situation as "bloodied-hands back-stabbing", then the UH and its fans are really screwed. I understand spinning things that way. But, . . . the thing is. . . . I think there may clearly be an element of that sort of thinking guiding the WAC in general, and in this particular circumstance . . . so, congratulations beegpk, at the very least, your way of thinking is on par with a WAC Commissioner's!!!!!

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Re: Fiduciary Duty of Conference Member

Post by beegpk »

bungahead wrote: .... But, "bloodied-hands back-stabbing"?????? If UHAD, UH upper campus, and the WAC in particular is so naive and inept that it can only look at this situation as "bloodied-hands back-stabbing", then the UH and its fans are really screwed....
sorry I struck a nerve bungahead but I appreciate the thought and effort you put into the response

oh, and to be clear .... I have no affiliation and never have had any affiliation with the team or the unversity ... I am pretty much your average internet nerd/fan who never coached, managed or administrated any college program ... I have no personal stake in this discussion except that I am a fan of the team and sports in general

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Re: Fiduciary Duty of Conference Member

Post by bungahead »

Also, absolutely hilarious that Benson is chirping about betrayal after what he was concocting.

Like any love triangle, the one left out in the cold always calls the other two immoral. . . mostly in a pathetic effort to save face . . . .

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Re: Fiduciary Duty of Conference Member

Post by beegpk »

bungahead wrote:Also, absolutely hilarious that Benson is chirping about betrayal after what he was concocting.

Like any love triangle, the one left out in the cold always calls the other two immoral. . . mostly in a pathetic effort to save face . . . .
Benson may soon become irrelevant at this point (absent some miracle action involving BYU) so I don't worry much if you want to laugh at his situation

what I don't find hilarious is that programs with long Division 1 histories like San Jose State may soon disappear ... I understand this happens all the time in the corporate world ... but in the world of college athletics, you would hope that bigger minds would prevail to try to prevent this

further, in the world of deal-making ... I hold institutions to a higher standard of acting in good faith ... this is just an opinion ... we certainly can disagree on this

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Re: Fiduciary Duty of Conference Member

Post by bungahead »

I read lots of the rumor flying around out there. This merger, that realignment, this deal or that. Every one that put UH in a good position lifts my hopes. But, then I start thinking about the probability that UH might be in the worst negotiating position of any DIA or DIAA school in the nation when it comes to conference affiliation. My suspicion is that even within the WAC, UH is now being leveraged heavily for travel subsidies. 10 years ago, travel subsidies just might have been doable. Things were cheaper then, and UH wasn't carrying the kind of major budget deficits it is today. Furthermore, I think teams still WANTED to come to Hawaii and play. Things have happened in the last few years, though. The BCS system has made Hawaii an unattractive travel spot. Every team in the nation has to schedule based on the presumption that it might be X-0 record wise at any given point in a season when it might make the long trip here, and therefore must consider the possibility of a long multi-time zone flight back and forth jeopardizing a chance for either a BCS bowl (big bucks) or a national championship.

Plus, I don't think it's a slam dunk anymore that a trip to Hawaii builds great donor and supporter relations for mainland schools. If required to analyze whether such a trip would somehow enhance donations TODAY, II think most schools would conclude that a trip to Hawaii might only reduce the amount of contributions they receive by the cost of their donors trips (if any).

Also, adding to my first point, Hawaii is good enough to pull out a win at home. It is bitterly ironic that Hawaii's bargaining position might be way better if it categorically, predictably, and assuredly sucked enough so that a trip here would yield a guaranteed win for the visiting team. The fact that it doesn't makes Hawaii a potential triple or quadruple whammy for a conference partner in many respects (cost to get here, potential for loss on road, travel impact on subsequent game(s), and negligible donor benefit).

Add into the mix the probability that visiting school dignitaries probably gotta spend time with Virginia Hinshaw. Hawaii is in a very, very bad place.

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Re: Fiduciary Duty of Conference Member

Post by bungahead »

beegpk wrote:
bungahead wrote:Also, absolutely hilarious that Benson is chirping about betrayal after what he was concocting.

Like any love triangle, the one left out in the cold always calls the other two immoral. . . mostly in a pathetic effort to save face . . . .
Benson may soon become irrelevant at this point (absent some miracle action involving BYU) so I don't worry much if you want to laugh at his situation

what I don't find hilarious is that programs with long Division 1 histories like San Jose State may soon disappear ... I understand this happens all the time in the corporate world ... but in the world of college athletics, you would hope that bigger minds would prevail to try to prevent this

further, in the world of deal-making ... I hold institutions to a higher standard of acting in good faith ... this is just an opinion ... we certainly can disagree on this

I don't think we disagree at all in terms of "ideals" or even self interest. I WANT Hawaii to be in a good place. I WANT the rest of the world to capitulate to each and every thing that would make things better for Hawaii. That goes for Hawaii in general as well as UH and UHAD.

And, I especially agree with you that we should hold institutions like UH to a "high standard off acting in good faith". The thing I think we might disagree upon is that I consider UH's current circumstances as quite possibly the product of a lack of good faith, but certainly a lack of vision and competence, by those "stakeholders" who've made UH into what it is today. I think the dynamics of self-interest, individual self-interest, economic and financial predation, territoriality, kuleana maintenance, and unbelievable arrogance have really, really hurt UH over the past 10-15 years. I've been chirping about those dynamics for years now to friends, to UH itself, and on the internet, and my nightmare appears to be on the verge of fruition.

Is it too late? I'm afraid that might be the case.

But, I believe this: If UH CAN dig itself out of this, and many other holes it finds itself in, then it cannot afford to rely on the same people, system(s) and practices that got it here in the first place. Not unless those people are capable AND willing to make the enormous changes in their approaches that are necessary to do so. And, from what I see, I don't think the peopIe in place are capable, on various levels and for various reasons, of doing that.

I may be particularly acerbic in the way and extent to which I state these beliefs. But, I don't think I'm alone in my views. UH is considered a secondary, and often last resort as a college choice by Hawaii high school graduates. If given the financial assistance to attend even mediocre schools on the mainland, I believe a clear majority, if not super majority of Hawaii hs graduates would opt to go out of state. I don't think that's true for a majority of other State colleges.

UH's athletics program is now being shunned by the rest of the nation - very publicly.

How could things be worse?

In my mind, this situation is squandered as a teaching, revelatory, change invoking moment if all we do is point fingers at FSU and Nevada and scream "TRAITORS!!!". To me, that's just spin designed to keep certain people employed. To me, it's time, high time, that we looked introspectively. It may not be a very "nice" perspective to have as to those who's positions or franchises, or kuleanas may be at stake. But, it's justified, I think. And, I think at this point, it only makes good sense.

With respect to sports and football, it's high time that even die hard fans start demanding that changes be made. To me, continued support for the status quo is simply nuts. Take a good, long objective view of where we're at. It isn't FSU or Nevada's fault.

As I've asked before in various forms, are you comfortable that UH is positioned and staffed to be led to anything resembling a promised land?

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Re: Fiduciary Duty of Conference Member

Post by Duster »

Interesting discussion.

Irrespective of the motives of the different players, at least WAC had the wherewithal to craft an agreement in the form of a resolution that imposed liquidated damages for breaching the resolution. That takes all of this speculation on conflicting duties and obligations and the numerous spins on it out of the picture, as well as the speculation out of any damaged caused by the breach. Whether the resolution was crafted without any ambiguities or "loopholes" is another issue.

After further reflection, the September 1st signing of BYU may not be critical to the enforcement of the exit fee. While paragraph 9 indicated that the resolution would be terminated if WAC did not enter into a contract with BYU, and argument can be made (and will be made) that the resolution was effective at the time FSU/Nevada announced that they were joining MWC. In other words, there was a valid agreement when they bolted. The apparent assumption made by WAC was that no one would leave before finding out whether BYU was in or out, and that MWC would not offer until BYU's spot opened. Otherwise, the resolution probably would have addressed the scenario where a WAC member departs before BYU's decision date more clearly.

As for Garret's post, perhaps it was CUSA who tipped of MWC. It could have been UNLV or SDSU. It could have been FSU or UNR (although I don't think so). It could have been someone else. My point is that if one is putting together a deal, you don't go blabbing about it until you finalize it. The main piece was BYU, and BYU needed to be in the fold first. With that in place, WAC could have made their grab for others while the iron was hot and the others could see that they may need to jump on the bandwagon or get left behind. Perhaps a snowball or domino effect. It sounds like WAC tried to fill the bandwagon first before hitching the horse. Isn't there a saying about putting the cart before the horse?

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Re: Fiduciary Duty of Conference Member

Post by bungahead »

Duster wrote:Interesting discussion.


After further reflection, the September 1st signing of BYU may not be critical to the enforcement of the exit fee. While paragraph 9 indicated that the resolution would be terminated if WAC did not enter into a contract with BYU, and argument can be made (and will be made) that the resolution was effective at the time FSU/Nevada announced that they were joining MWC. In other words, there was a valid agreement when they bolted. The apparent assumption made by WAC was that no one would leave before finding out whether BYU was in or out, and that MWC would not offer until BYU's spot opened. Otherwise, the resolution probably would have addressed the scenario where a WAC member departs before BYU's decision date more clearly.
Yeah, but then you gotta question whether or not there was actual consideration or frustration of purpose if BYU doesn't sign.

I don't think the WAC's claim is ironclad at all.

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