Valparaiso to join MVC

[Pathfinder]

This is a better article that offers more clarity into the dispute. Horizon League broke their own bylaws by not entering the mandatory arbitration process.

http://www.nwitimes.com/sports/college/ ... f1b7f.html

“There is a true legal dispute here,” Niemi said. “Valpo wants to compromise and never wanted anything litigated. We are surprised and disappointed that the Horizon League has been unwilling to compromise and we had deep regret that they chose litigation over the mandatory arbitration as mandated (in the bylaws).”

The sticking point between the two parties revolves around a document that was signed by then-VU President Alan Harre and then-Horizon League Board Chair and Milwaukee President Carlos Santiago on May 15, 2006.

The document outlines membership conditions for Valparaiso to join the Horizon League and also serves as an initial five-year commitment between both parties that expired July 1, 2012. The document includes a rolling table of liquidated damages that would be paid if Valparaiso were to leave the conference prior to the end of the five-year period. The financial penalties range from a $500,000 charge had Valparaiso left the league prior to the end of the 2007-08 season and depreciated each year to $50,000 had Valparaiso left the league prior to the end of the 2011-12 season.

With the five-year contract expiring July 1, 2012, league bylaws state that, “membership in the League shall be deemed automatically renewed for successive one-year terms.”

While Valparaiso continued to operate in the Horizon League until this year, it did so under the series of one-year terms.

Side Note: It's absolutely pathetic that the Horizon League is suing the MVC... There is many reasons why Valpo wanted to leave the HL and this is just one example. The Horizon League has a lot of bitter feelings losing both their 2 premier programs (Butler/Valpo) within 2 years on top of losing Loyola as well.

This whole thing smacks of pettiness & desperateness from the Horizon League.

The Horizon League bylaws require that the parties meet "for the purpose of negotiating in good faith an informal resolution of the dispute." This is very different from mandatory arbitration. The fact that Valpo is claiming that this requires mandatory arbitration suggests that they really don't have much defense.

I also don't know why you suggest that this is "petty and vindictive" by the Horizon. It's a half-million bucks. Even in the world of modern college athletics, that's real money. It's not a fortune, no, but it's $55K to each of the 9 teams left (or $50K if IUPUI is included), which is a pretty nice boost to the recruiting budget. Plus, if you don't want teams to leave in the future, you have to enforce the exit fee. Otherwise, the exit fee is no deterrent. And the sole reason for having an exit fee is to deter schools from leaving.

[VU2014]

Pathfinder, the arbitration period is actually in the bylaws apparently and my comment towards pettiness was towards the HL suing the MVC specifically. Of course it is understandable to seek the exit-fee. The point is that the HL HQ itself didn't allow for any period of arbitration. Valpo of course owes an exit-fee but the question is how much and if the payment could be amortized over more than one year as they allowed other former members to do. There is no way this isn't settled out of court. There is bad blood here and some hurt feelings in this case.

Just an example of how contentious things got and how many hurt feeling there were: The Horizon League wanted to not allow Valpo student athletes to compete in postseason play and represent the league at the end of the year, so Valpo was forced to not publicly announce or even mention it was leaving for the MVC even though everyone knew we were going to accept the invite.

These lawsuits of former Conferences suing former members during realignment have become fairly common in this era of conference realignment.

[Pathfinder]

Pathfinder, the arbitration period is actually in the bylaws apparently and my comment towards pettiness was towards the HL suing the MVC specifically. Of course it is understandable to seek the exit-fee. The point is that the HL HQ itself didn't allow for any period of arbitration. Valpo of course owes an exit-fee but the question is how much and if the payment could be amortized over more than one year as they allowed other former members to do. There is no way this isn't settled out of court. There is bad blood here and some hurt feelings in this case.

Just an example of how contentious things got and how many hurt feeling there were: The Horizon League wanted to not allow Valpo student athletes to compete in postseason play and represent the league at the end of the year, so Valpo was forced to not publicly announce or even mention it was leaving for the MVC even though everyone knew we were going to accept the invite.

These lawsuits of former Conferences suing former members during realignment have become fairly common in this era of conference realignment.

Well, yes, that's what Valpo's representative says in an interview in the local paper with the Valpo beat reporter (who is a Valpo alum) now that they are being sued for the money they won't pay. But can you actually point to language that says that in the bylaws? The Valpo spokesman isn't quoting or citing to any provision of the actual bylaws. The Horizon's up-to-date bylaws are not on line, but there was no such provision in the bylaws a few years ago (which you can find online). Meanwhile, CBS Sports (unlike the Northwest Indiana Times) purports to quote the actual language of the bylaws: per CBS, the bylaws require the parties to meet "for the purpose of negotiating in good faith an informal resolution of the dispute." Assuming that is a correct quote, that's not binding arbitration, or even close. That means you have to call the other guy up and say, "hey, where's our money?... what? ... you mean you won't pay it? ... On what grounds?
... See you in court, pal."

Of course this will be settled out of court. That doesn't mean that Valpo has any serious defenses. Indeed, it just means they are trying to nickel and dime the Horizon--better to take, say, $425K than to spend $100K to go to trial for $500K. And your last point is pretty silly--the Horizon "forced" Valpo not to announce? Most people would say it's the opposite--Valpo refused to officially announce in order to avoid the penalty of leaving the league, since once you've left, you don't represent the league in post-season play. If there's bad blood, it's because Valpo is welching on its debt.

I presume the MVC was added as a defendant because legally the MVC wanted Valpo to join right away, and because practically, it makes it more likely the HL gets its money in any settlement--Valpo will probably settle high, the MVC low, and together they will make up the entire $500K or close to it.

[BUDude]

Frankly good for the Horizon. Smaller leagues getting pillaged should hold the school leaving to whatever agreements they've made to their former conference schools. Why the MVC has been fleeced by departures with nothing to show for it tells you all you need to know about our administration.

[VU2014]

Pathfinder, From what I've heard this has some to do with allowing amortized payments (which the HL allowed both BU & LU to do previously). I don't begrudge the VU admin for not paying the $500k up front before they enter the arbitration process. That makes absolutely no sense from a business & practical standpoint. Also the bylaws & amendments have never been public record and the only people who actually have seen the fine-print are the lawyers.

As for "Most people would say it's the opposite--Valpo refused to officially announce in order to avoid the penalty of leaving the league". Not sure where you are hearing this from... if I can tell you one thing that is for sure its that the HL HQ was going to pull VU student athletes out of competition (which is morally wrong from my view point. Why punish the student-athletes?). But I guess you can role with "most people" if you actually want to believe that. That was not the case at all.

Frankly I find it strange you are taking such a firm stance on this, even though everyone (including yourself) doesn't have all the facts or details on the situation. VU always intended on paying an exit-fee and yes they will likely settle closer to the $500k than in the middle. Unfortunately it takes 2 sides to come together to talk and the HL didn't come to the negotiating table before filing suit.

[Pathfinder]

From what I've heard this has some to do with allowing amortized payments (which the HL allowed both BU & LU to do previously).

Where do you get this from? Given that the fee at that time was just $50,000, that seems pretty unlikely.

The complaint says the fee was due June 24, which would be 30 days after Valpo announced it was leaving. Of course we don't know, but that sounds like a standard 30 day contract provision for paying liquidated damages.

the bylaws & amendments have never been public record

Actually, the bylaws and operating amendments as they existed in 2009 are readily available with a google search. Of course, all sides agree there have been amendments since, and an up-to-date version doesn't seem to be on-line. But the 2009 bylaws have nothing about arbitration, and the language quoted by CBS, presumably from the current bylaws, talks only about "negotiating in good faith" before filing a suit, not arbitration. An obligation to negotiate is not arbitration. They are very different things. (Note that Valpo's spokespeople aren't pointing to actual provisions or language in the bylaws. Note also that even an obligation to arbitrate, not complied with, still wouldn't excuse Valpo from paying anything it owes. If Valpo has no basis for not paying, demanding any arbitration--or really, it appears, just further negotiation--is just delay, which is poor behavior on VU's part. In other words, the obligation is there to address legit disagreements about the contract terms, not to address one side's desire to renegotiate the contract after the fact.)

everyone (including yourself) doesn't have all the facts or details on the situation.

True, but what we have looks very bad for Valpo, and the stuff about "binding arbitration" seems unlikely, especially if you consider CBS a reasonably good source.

VU always intended on paying an exit-fee

Or not. Maybe VU always figured it could weasel out of the fee. As you say, we don't know for sure. Assuming the basic truth that the fee was due on June 24 and Valpo hasn't paid it, I wouldn't be too quick to assert Valpo's intentions.

My best guess on all this--based on the complaint, reporting, your comments, knowledge of human nature and the legal system--is that Valpo's full exit fee payment was due on June 24, 30 days after they left the league. Valpo said they couldn't or wouldn't pay it, at least in one installment at that time. The two sides talked, with the League being adamant, and then the league sued. Given that the suit was filed June 27, they were probably anticipating having to sue before June 24, likely because the two sides were already in talks--"good faith negotiations"--after May 25 and Valpo was asking for time. My guess is that if Valpo was asking for reasonable terms to get the cash together--for example, collecting on some of those supposed alumni pledges, or just selling assets (an unanticipated one-time payment of $500K will put a crimp in cash flow, even for an organization with Valpo's budget) the league would have been fine. Probably Valpo asked for 5 years or some such thing, or (worst case for Valpo) actually claims they don't owe it, on the grounds that the 2007 letter or understanding was not altered by the later imposition of the higher fee and Valpo's decision to remain in the league after that (which is probably an untenable legal position). But again, even an obligation to negotiate, or even to arbitrate, doesn't change the underlying legal obligations of the contract. If the terms are clear, there's nothing to "negotiate."

We'll see what comes out (probably nothing, actually--they'll settle in a sealed agreement, with the money being paid but no admissions by Valpo or the Valley), but it doesn't look good for VU. Although there's probably a decent enough legal claim against the Valley, I can see why the Valley might be ticked that they've been dragged into this dispute--"what did we do? We just extended an invitation to Valpo to join. It's not like we haven't been raided by other conferences." But I wouldn't be making excuses for Valpo at this point.

[VU2014]

Pathfinder, I feel like you are pretty firmly entrenched in your opinion. All I can say is nobody particularly looks great in this position. VU would have likely much rather dealt with this out of court (& likely still will) & sat down with the Horizon League & worked something out, but it takes two sides to become grown adults & work something out. The Horizon chose to apparently break its own bylaws and proceeded sue before entering the period of arbitration.

It is what it is & its unfortunate these type lawsuits have become common place in the era of realignment. I'm sure it will all be handled out of court & the two side will just settle.

[Pathfinder]

The Horizon chose to apparently break its own bylaws and proceeded sue before entering the period of arbitration.

This is the core of our disagreement. You seem to believe this is true, and it might be--we don't have the bylaws. But you certainly don't know that it is true. And it's not what the Horizon says, it's not in the language that CBS has quoted from the bylaws, and it's not in the bylaws (admittedly old and probably amended) that one can find on line. What is definitely true is that Valpo hasn't paid the fee. And any "negotiation" (or even arbitration) clause doesn't excuse Valpo's failure to pay unless Valpo actually has a substantive defense. Again, the purpose of any such clause is not to allow the breaching party to renegotiate the deal post-breach before being sued. It's to settle a good-faith dispute on what the terms of the contract mean before the parties rush to court. Further, you don't know that the party's didn't negotiate, other than Valpo's spokeswoman claims that. But if the clause is probably not for binding arbitration--which it probably is not-- there is no particular requirement that the parties do anything--it's really an exhortation clause. The fact that Valpo's spokeswoman, commenting on the matter, offered no substantive disagreement on the terms of the contract also weighs against the Crusaders here.

[oklahomacrusader]

Can the rest of the mvc fans do Valpo a favor when playing any HL team. Get the MVC chant going just like the SEC does in football.

[Red]

Can the rest of the mvc fans do Valpo a favor when playing any HL team. Get the MVC chant going just like the SEC does in football.

In theory, good. In reality, not many of us give a crap about the Horizon League to try and insult them.