Recently, Conference USA announced a new television rights deal with Fox whereby Conference USA will reportedly be paid $43 million, which is nearly twice as much as their previous television rights agreement with ESPN.  ESPN threw a flag and called foul on Conference USA for allegedly breaching their television rights agreement and possibly a subsequent television rights agreement.  ESPN claims in its lawsuit that Conference USA violated its contract with ESPN by failing to provide ESPN with the opportunity to provide the final offer.  Additionally, ESPN believes they had an agreement in principle with Conference USA to renew the television rights deal. 

The right of final offer is a contentiously negotiated and important provision in any contractual agreement.  Indeed, it is a provision that is difficult during negotiations, because the law requires that the party holding the right of final offer be provided with the opportunity to make the last offer.  For example, when selling television rights, the conference office (i.e., Conference USA) shops the rights to all bidders and could ultimately come to an agreement with a bidder (i.e., Fox), but would still have to give the party holding the rights (i.e., ESPN) the opportunity to match or beat the new offer.  This is difficult because Conference USA would have to inform Fox that they are in agreement, but would have to wait until ESPN has been the afforded the opportunity to beat or match the offer.  Clearly, this places a burden on Conference USA and requires Fox to sit back and wait.  These provisions do not help negotiations between a rights holder and new bidder.

I have never reviewed the terms of the ESPN and Conference USA final offer provision, so I cannot offer an opinion on the proper analysis of the specific provision.  The wording and language used is extremely important when analyzing one of these provisions.  This is a clear case of contract construction, interpretation, and use of language.

For any questions, feel free to contact Christian Dennie at cdennie@bgsfirm.com.