Originally Posted by
BigHorns
Ok, the logic makes sense.
A lot of times those exit fees get negotiated/restructured after an announcement is made though, and the revenue increase at a P5 conference can still make the early exit worthwhile.
Eg: If SDSU could negotiate to pay the 33m over 2-3 years, while increasing their payout from $4m -> $30m yearly, it might make sense to leave asap. And even if not negotiable, it may make sense with that type of revenue increase for them to raise funds or finance a move quicker.
It would cost them an additional $16.5 mil to leave a year early, but that is potentially offset by $26m in additional revenue that year. In other words, the financials suggest they should leave early IF the PAC/B12 media deals continue to pay at least $30m or more. The early move would net them approx $10m more that year, even with the exit fee.