Mike Casazza column: WVU did not 'lose' in Tier 3 deal
MORGANTOWN -- For some reason Thursday, upon learning West Virginia University had finally consummated its Tier 3 partnership with IMG College for 12 years and at least $80 million, rumor turned into fact that the athletic department had lost $30 million.
It is one of the dumbest things I've heard in a while, and that's saying something because there have been so many dumb things said and done within this twisted affair.
For starters, WVU never had $110 million. That was a projection, perhaps the most optimistic available, as relayed by people who knew someone who knew something about a deal arranged in January. Was it in the ballpark? Yes. Was it precise? Probably not, and not merely because it didn't come directly from a contract we never saw or from an authority like WVU Athletic Director Oliver Luck or IMG President Ben Sutton.
That first figure, the one that trumped the second figure WVU revealed Thursday, was an approximation. It was the sum of the amount guaranteed in each of the 12 years, plus the amount of incentive available through revenues WVU hoped would be available every year.
And of course, that deal fell apart in January, undone by West Virginia Radio Corp. Owner John Raese and a quest that teetered between principled and petulant. He made points like he made enemies and he went as far as pleading to the state's attorney general. He ultimately filed a lawsuit that read more like propaganda and was ultimately spat upon by WVU with Thursday's news -- though let's not pretend Raese can't or won't file again.
But what Raese did accomplish was derailing the first agreement between WVU and IMG College. And that's about it.
This refreshed $80 million figure is going to come awfully close to the previous figure. The new number does not account for revenue sharing. What we're likely to learn when the contract is made public is that IMG College has purchased the multimedia rights and guaranteed a large chunk of money every year that will ultimately total, according to Thursday's press release, "more than" $80 million.
On top of that will be a revenue sharing plan.
IMG College will make a lot of money off of WVU. From that sum, it will pay WVU its annual (and surely escalating) guarantee. IMG College will then cover its expenses out of what's left after paying WVU. There will still be money left after that and the two will split it, probably close to evenly.
Figure IMG College will need this first year, the one compromised by the delay, and the second year to hire a staff and hit its stride to make the most money it can off of WVU. Over the final 10 years, the split revenue can add up nicely for the Mountaineers and make up a lot of that so-called, mislabeled lost $30 million.
But not all of it.
It appears the Mountaineers built in a plan for the gap, though. One paragraph among the nine announcing the partnership is especially important. It states that WVU "retains some existing sponsorships with corporate entities such as athletic apparel and footwear, health care, financial services and pouring rights." That means contracts that can add up to a very large amount of money will belong to the Mountaineers and not IMG College.
Knowing WVU and its history of business partners, we're probably talking about Coca-Cola, Gatorade, Budweiser, United Bank, Nike and/or others that would fit into the listed categories. WVU will negotiate and benefit from those contracts, conveniently enough because it was made to go through the RFP process twice and had a change of heart the second time around thanks to Raese's intervention.
A dozen years from now, because those contracts WVU retains will be renegotiated and the worth will rise, this new figure is going to be calculated in a way to make it look an awful lot like that old figure.
This is not the end, though. It is a beginning and it will have to develop quickly. Remember, this plan was first set in motion in January. Everything that was supposed to happen between then and the start of the fall sports seasons has to occur between now and then. It's about invaluable production planning for radio and television broadcasts and finding all the ways and the people to make the money IMG College is guaranteeing to WVU.
Consequently, that guarantee this year is surely going to be lower than it would have been had the original plan gone through seven months ago. WVU will have to rely on revenue this year for much of the income, which is one reason the new number does appear lower.
The Mountaineers will have to grin and bear it and look forward to better financial times, much like you'll have to get through this first year and the product served to you that isn't cooked all the way through, simply because there wasn't enough time to prepare it properly.
But if you could get through everything up until this point, you should be able to handle the rest.
Contact sportswriter Mike Casazza at firstname.lastname@example.org or 304-319-1142. His blog is at blogs.dailymail.com/wvu.