Memphis settles bill with C-USA

Final cost for leaving? Zilch

When the University of Memphis gleefully accepted its invitation to the Big East Conference 21 months ago, the potential of a $6.6 million exit fee from Conference USA and a $2.5 million entry fee into the Big East was a footnote. It was the Big East, you know?

Then came the implosion of the Big East and the loss of many of the prizes, including the expected media-rights-deal riches. Sure, the American Athletic Conference, which rose from the ashes, beats the watered-down C-USA, but was it worth all that money?

So here’s good news for Memphis’ pocketbook: C-USA and the U of M reached a settlement this summer by which the school’s total cost of separation from its old league is a tidy and manageable figure: $0.

The Tigers’ relatively recent NCAA tournament success was a big reason. The U of M was able to apply NCAA basketball tournament credits, the amounts the NCAA pays conferences for their members’ performance in the event, to its bill.

“It’s very positive, and a tribute to the 17 seasons that we spent in Conference USA as one of the premier programs, and all of the excitement we brought to the conference and national attention,” athletic director Tom Bowen said. “I believe it’s fair on both sides.”

In fact, the U of M could actually make money from its settlement with C-USA.

Beginning next season and through 2018-19, any men’s basketball game Memphis plays at a C-USA school — or on a neutral site, if the C-USA school owns the rights to broadcast it — will be worth half an NCAA tournament share directly to the Tigers, up to a maximum of two a season.

In 2013, NCAA tournament shares were worth $245,500, according to the NCAA.

Bowen said he’s doubtful the U of M will do this in 2014-15, “but at some point, it’s an option,” he said. “And many of those institutions are longstanding rivals with us.” Though he didn’t name them, logic would suggest games against UAB, or perhaps Southern Miss.

The NCAA distributes money to conferences based on each win in the tournament by a member school. The payouts are made to the conferences on a rolling six-year period, meaning Memphis’ tournament runs in 2008 and 2009 under John Calipari helped pay off its C-USA bill. While the Tigers are forfeiting shares of revenue they would’ve received had they remained members of C-USA, it’s less than what they would’ve had to pay had the shares not been able to be applied to its C-USA exit bill.

The U of M remains on the hook for its $2.5 million entry fee to the AAC, even though it was originally supposed to go to the Big East, an AAC spokesman confirmed last week. The Tigers are paying this by forfeiting $500,000 of their annual revenue distribution from the AAC for the next five years.

Bowen isn’t sure how much to expect from the AAC in revenue sharing, calling that figure a “moving target.” The Houston Chronicle reported in July that the University of Houston is anticipating about $2 million annually from the league.

On that February 2012 day Memphis accepted its bid, C-USA estimated the Tigers would owe them $6.6 million. But that was always viewed by Memphis as a starting point for a negotiation. C-USA staked its position on the amount of revenue it would lose in its next media rights deal directly related to Memphis’ departure, but Memphis was far from the only school that departed C-USA.

The school placed $1.7 million in escrow last summer in anticipation of paying a settlement, but those funds were released back to the U of M after this summer’s agreement was reached.

A clean exit from CUSA is a boon to a department that is operating on a $36.5 million budget that’s essentially the same as the year before.

Maryland, for instance, has been handed a $52 million bill from the Atlantic Coast Conference for its departure for the Big Ten Conference, the Baltimore Sun has reported. It is challenging the sum in court.

The Memphis- Conference USA settlement, signed in August, pledges the school and league not to sue each other. The Commercial Appeal obtained the document through a request under the Tennessee Open Records Act.