The Big East and the "Catholic 7" basketball schools have much to hash out in their divorce, and among the assets for the conference to protect: a “Realignment Reserve Fund” worth a projected $68.8 million by 2020, documents show.
The “Mutual Commitment Agreement – Initial Separation Issues List,” sent by Big East attorney Peter Zern to commissioner Mike Aresco and three Big East presidents on Dec. 21, highlights ground rules for a departure that one Big East source says could take all of 2013 to finalize.
The Catholic 7 -- composed of DePaul, Georgetown, Marquette, Providence, Seton Hall, St. John's and Villanova -- announced plans to separate from the Big East on Dec. 15.
Obtained through a public records request of email correspondence of USF president Judy Genshaft, a Big East chair, starting Dec. 10, the MCA spells out several questions about the timing of the separation (scheduled July 30, 2015), the Big East namesake, the licensing agreement at Madison Square Garden and other “relative property” to sort out.
Though the documents don't provide answers to the questions, they highlight the Big East's financial intake from the mass departures during the recent waves of conference realignment, including:
- Approximately $18.8 million in exit fees “on deposit in the Realignment Reserve Fund” by June. (Fees from West Virginia, Texas Christian and a portion of what Pitt/Syracuse owe.)
- Approximately $25 million more in the RRF by June 2018 (rest of Pitt/Syracuse fees, and balances from Louisville and Rutgers, which is in litigation with the conference. In October 2011, the Big East reportedly doubled its exit fee amount to $10 million).
- Approximately $25 million in entrance fees from 10 incoming members running to 2020. (This was before Boise State and San Diego State returned to the Mountain West Conference. Boise owes a $2.5 million exit fee, which also covers SDSU since the two came in as West Coast partners.)
The documents also mention the league's “Football Reserve Fund” and a “Conference Reserve Fund,” which will be distributed to the Catholic 7 pro rata based on the number of members in the group. Numbers for those funds weren't listed.
“Because it is anticipated that a number of the expenses associated with Conference realignment and the Conference's re-building efforts will be paid from the amount on deposit in the Realignment Reserve Fund, and because the final amounts to be paid into the Realignment Reserve Fund have not yet been agreed upon with some of the departing institutions, please indicate the proposed allocation for both of these sources of money as a percentage (not a dollar amount) below:”
Then the document lists the same breakdown of exit fees and entrance fees as listed above.
The documents state the Big East retains NCAA units from West Virginia, Syracuse, Pitt and Louisville, worth roughly $50 million over a nine-year period.
CBSSports.com has left messages for Zern and Catholic 7's lawyer, Joe Leccese, seeking comment.
Big East Commissioner Mike Aresco was not immediately available for comment but said in a Jan. 14 interview about the divorce: “We want to sit down and amicably hash it out.”
A sample of questions the agreement asks of the Catholic 7:
- “Would you be amenable to an earlier separation date?”
- ”If so, what is the earliest date you would consider?”
- “Would you be amenable to allowing the other group of schools to retain the Big East name under appropriate conditions?”
- “Would you consider a change in format that might allow both groups to hold a shorter tournament at (Madison Square Garden), or would you consider other potential alternatives (such as alternating years with the other group at MSG)?”
The MSG agreement currently runs to 2026.
The agreement warns that litigation issues with withdrawing Big East football members (such as Rutgers) may arise that could affect the separation of the Catholic 7. If that happens, the counsel will coordinate with each group.
Zern's email was sent to Aresco, Genshaft, Southern Methodist president Gerald Turner and San Diego State president Elliot Hirshman, who had been appointed to join a “small negotiating team” for the separation. Hirshman's Aztecs officially left the conference 26 days later.
The email says both groups have flexibility to retain or transfer the Big East name without harming NCAA men's basketball automatic qualification status.
In a separate email Dec. 24, Zern reached out to Big East presidents and athletic directors about the league's understanding that Notre Dame “reached out directly to the group of seven basketball schools to discuss the timing and terms for Notre Dame's departure.”
“Mike (Aresco) intends to send a letter to the basketball schools today in order to make sure the record and facts are clear regarding the discussions with Notre Dame and their obligations to the conference,” Zern wrote.
Zern urged members to keep information about Notre Dame confidential as “any discussions with them are extremely sensitive.”
Notre Dame reached an agreement to join the ACC in September, but Big East bylaws require 27 months notice before leaving. That would keep Notre Dame in the league until 2015.
In a text message, Notre Dame athletic director Jack Swarbrick said the email “reflects our interest in understanding what the Catholic 7 are thinking in terms of a timetable. Risk we are trying to manage is the possibility that they leave earlier than expected.”
The league was working to schedule meetings with Catholic 7 reps for late January, according to Genshaft's emails.