Wow! The level of incompetence and / or sheer greed here is breathtaking. Can the PAC12 claw back the payouts to Larry Scott? There should be accountability here. Maybe he has enough in the bank to pay off the $50M obligation. That would be just desserts.
The benefit of the doubt? I have little or no doubt that Scott and his sycophant minions knew what was going on and the cover-up was on.
Audited by one of your best friends? You can't make this 'stuff' up.
The network should file BK. 1-year clawback for preference payments to 'insiders' would be a slam dunk and the one year could go back to when Scott and friends learned of this accounting 'error.' Add fraud to the equation and the clawback could extend from the date Scott et al learned about the overpayment to the time he was terminated.
Does someone need to take the gloves off? Hell yes! But are the Pac/10 conference 'leaders' willing to do so? I doubt it.
They'll bend over and ask the Pac-10 members plus SC and UCLA to refund the money owed. I'm mad as hell but I have no choice but to keep on taking it in the tailpipe.
One form of the B12 or the other is looking long term better and better.
Thank you John for helping to expose and following up on this chicanery.
How do you know the missing money didn’t go to overhead caused by Larry’s mismanagement of the PAC-12 and double billing on his staff’s part. Why we’re the Pac 12 offices stationed by Larry again away from the prime media market LA.
Interesting thought, but is the entity insolvent? Does it actually qualify for bankruptcy.
Also, if these were just normal payments to Scott & friends, they would likely be subject to the ordinary course defense, wouldn't they?
There may be other theories that could be explored, but here is the problem.
If these gentlemen did not cause this problem, but rather just covered it up for whatever reason (and we don't know that they did cover it up), how are they personally liable.
If there were overpayments to the Network, the Network, not the officers/directors, have liability, in particular where there is no suggestion that the officers/directors benefited from this or even caused it.
Jack, I believe the network is functionally insolvent. If not by definition 'insolvent' a Chapter 11 reorganization BK could be filed. The 'clawback' rights exist whether it is a liquidation or a reorganization.
Based upon Wilner's article, there is little to suggest this network is even close to being "insolvent".
Further, upon Chapter 11, money paid out in the year (or even 4 to 6 years prior to bankruptcy, depending upon the legal theory) is not just automatically claimed by the Bankruptcy Estate.
A legal theory has to exist to justify that claim and typically, income paid to executives is paid in the "ordinary course", a defense to preference payment recovery. In other words, it is doubtful this money can be recovered as a preference.
Further, if money is owed, it is owed by the Network and Comcast may have offset rights. It's goal of course will be to collect, via offset, what it is owed, while leaving the Network in a position to operate to repay/permit offset, the sums owed.
Also, and this is the rub. The mere fact that Comcast alleges a $50 million shortfall is just that, an allegation. They might be right, but they have to prove it.
Also, read the Wilner article. It puts the situation in a different light. Comcast calculated these payments based upon its own proprietary subscriber data, not the other way around. The Conference thought it was being underpaid and its audit did not include Comcast's proprietary data, if Wilner is correct.
The Network executives blew it by not telling their bosses.
The network has never met its lowest forecast earnings. Has laid people off and gone off the field for broadcasts.
In other words, the Pac-12 is year after year funding an entity that does not provide a return on investment.
Income paid to 'executives' is far different under the code than the money paid to 'insiders.' If the network Chairman, President, and CFO are not 'insiders' who is an insider?
I never suggested an ipso facto return of money from the insiders. A pleading has to be filed and of course, the alleged insiders would have the right to deny the claims.
I have seen many functionally insolvent companies file for reorganization. IMO, the network is functionally insolvent.
Comcast would of course file a claim in any BK; if, not at the time of filing listed as one of the 10 creditors owed the most money.
Do you believe a better remedy would simply be to file fraud claims against those with knowledge who failed to report? If so as to the choice of remedy, this could be a more effective approach than filing BK?
Of course, both of us are simply projecting possible remedies without knowing all of the facts.
Based on what is 'known' to date. I'd far rather join Comcast in an attempt to recover 'purloined' funds than defend a suit versus Comcast. Regardless, I do not want to see the SOB executives who fouled this up simply walk while the conference takes it in the shorts.
Let’s look at the CEO group that oversees the conference. By and large, they’re purely academic types ill-suited to manage an athletic and media enterprise of this size and scope. Easily bamboozled by a salesman like Larry Scott. He saw hi$ opportunity and took it.
Have you spoken with Ed Ray? I like Ed, but it looks like he bought into the Larry Scott regime, hook, line and sinker? He was a big part of the conference keeping Scott on. Would love to hear what he thinks now? I'm sure he is wearing a muzzle.
Ed Ray, in my opinion was a huge problem. How many times did he come to Scott’s and the PAC12’s defense. But I don’t think he is alone. Basically no one seemed to ask questions on important issues.
Overpayment? Well this explains razor thin production budgets, layoffs, eliminating positions all together. The loss of Mike Yam and other quality on-air personalities. The adoption of remote broadcasts. Oh and the inability to provide stability to the Pac-12 CEO Group. It all makes sense now that the truth has emerged.
I don't feel like we know enough to know if Chief Financial Officer Brent Willman and Pac-12 Networks president Mark Shuken were complicit to the degree that they should be fired, or if they are indeed the scapegoats, because in the corporate world, someone has to be (and Larry Scott and Woody Dixon are long gone), or perhaps this is the convenient excuse to remove them, being holdovers from the Scott era, whether there is an actual reason other than this series of incidents, or just corporate infighting, which is also an all too common practice.
The feeling I continue to have following the seemingly unending series of small to large, and local to conference wide, sub-optimal developments is one of an operation that just doesn't have things buttoned up well at all at hardly any level (though there are occasional positives). A well-organized organization just doesn't have so many things go wrong, and when they do (and some problems are always going to crop up from time to time anywhere), they are addressed quickly and effectively.
Whatever other issues there were with Larry Scott, and therefore the culture of the organization he created and maintained, I've felt all along he was just so out of connect with anything and everybody involved in running the conference that the result has been an ongoing series of issues that just weren't seen coming (by someone), and then there was no clear vision of a correction moving forward.
Much has been made of the fact that Larry just didn't connect, and people from the inside and the outside didn't connect with him. That's a recipe for disasters, even if fully unintentional (which it wasn't always, it seems). Some don't even involve Scott, or Current Pac-12 commissioner George Kliavkoff, for that matter. But perhaps they should.
The results are a long string of things that frequently leave me thinking "This just wouldn't happen in the SEC or B1G. Or the Mt West either, for that matter."
Better call Saul…..
Wow! The level of incompetence and / or sheer greed here is breathtaking. Can the PAC12 claw back the payouts to Larry Scott? There should be accountability here. Maybe he has enough in the bank to pay off the $50M obligation. That would be just desserts.
I'm sure Lavish Larry developed a sudden case of amnesia when that interview occurred.
Going to need a bigger shovel.
It is the Bald-Faced Truth - thank you John
Keep digging. Lots more to uncover.
Canzano and Wilner are the Woodward and Bernstein of Larrygate.
I figure we can either laugh or cry. Since it's not my money, I'll take the former.
The benefit of the doubt? I have little or no doubt that Scott and his sycophant minions knew what was going on and the cover-up was on.
Audited by one of your best friends? You can't make this 'stuff' up.
The network should file BK. 1-year clawback for preference payments to 'insiders' would be a slam dunk and the one year could go back to when Scott and friends learned of this accounting 'error.' Add fraud to the equation and the clawback could extend from the date Scott et al learned about the overpayment to the time he was terminated.
Does someone need to take the gloves off? Hell yes! But are the Pac/10 conference 'leaders' willing to do so? I doubt it.
They'll bend over and ask the Pac-10 members plus SC and UCLA to refund the money owed. I'm mad as hell but I have no choice but to keep on taking it in the tailpipe.
One form of the B12 or the other is looking long term better and better.
Thank you John for helping to expose and following up on this chicanery.
How do you know the missing money didn’t go to overhead caused by Larry’s mismanagement of the PAC-12 and double billing on his staff’s part. Why we’re the Pac 12 offices stationed by Larry again away from the prime media market LA.
Interesting thought, but is the entity insolvent? Does it actually qualify for bankruptcy.
Also, if these were just normal payments to Scott & friends, they would likely be subject to the ordinary course defense, wouldn't they?
There may be other theories that could be explored, but here is the problem.
If these gentlemen did not cause this problem, but rather just covered it up for whatever reason (and we don't know that they did cover it up), how are they personally liable.
If there were overpayments to the Network, the Network, not the officers/directors, have liability, in particular where there is no suggestion that the officers/directors benefited from this or even caused it.
Jack, I believe the network is functionally insolvent. If not by definition 'insolvent' a Chapter 11 reorganization BK could be filed. The 'clawback' rights exist whether it is a liquidation or a reorganization.
Based upon Wilner's article, there is little to suggest this network is even close to being "insolvent".
Further, upon Chapter 11, money paid out in the year (or even 4 to 6 years prior to bankruptcy, depending upon the legal theory) is not just automatically claimed by the Bankruptcy Estate.
A legal theory has to exist to justify that claim and typically, income paid to executives is paid in the "ordinary course", a defense to preference payment recovery. In other words, it is doubtful this money can be recovered as a preference.
Further, if money is owed, it is owed by the Network and Comcast may have offset rights. It's goal of course will be to collect, via offset, what it is owed, while leaving the Network in a position to operate to repay/permit offset, the sums owed.
Also, and this is the rub. The mere fact that Comcast alleges a $50 million shortfall is just that, an allegation. They might be right, but they have to prove it.
Also, read the Wilner article. It puts the situation in a different light. Comcast calculated these payments based upon its own proprietary subscriber data, not the other way around. The Conference thought it was being underpaid and its audit did not include Comcast's proprietary data, if Wilner is correct.
The Network executives blew it by not telling their bosses.
The network has never met its lowest forecast earnings. Has laid people off and gone off the field for broadcasts.
In other words, the Pac-12 is year after year funding an entity that does not provide a return on investment.
Income paid to 'executives' is far different under the code than the money paid to 'insiders.' If the network Chairman, President, and CFO are not 'insiders' who is an insider?
I never suggested an ipso facto return of money from the insiders. A pleading has to be filed and of course, the alleged insiders would have the right to deny the claims.
I have seen many functionally insolvent companies file for reorganization. IMO, the network is functionally insolvent.
Comcast would of course file a claim in any BK; if, not at the time of filing listed as one of the 10 creditors owed the most money.
Do you believe a better remedy would simply be to file fraud claims against those with knowledge who failed to report? If so as to the choice of remedy, this could be a more effective approach than filing BK?
Of course, both of us are simply projecting possible remedies without knowing all of the facts.
Based on what is 'known' to date. I'd far rather join Comcast in an attempt to recover 'purloined' funds than defend a suit versus Comcast. Regardless, I do not want to see the SOB executives who fouled this up simply walk while the conference takes it in the shorts.
John, pretty sure you're not on Larry's Christmas card list anymore!
I'd be suspect around the existing relationship between the Pac 12 and their law firm. Time for a change?
Let’s look at the CEO group that oversees the conference. By and large, they’re purely academic types ill-suited to manage an athletic and media enterprise of this size and scope. Easily bamboozled by a salesman like Larry Scott. He saw hi$ opportunity and took it.
So does this mean I get a rebate on my Comcast bill for the last 10 years?
John,
Have you spoken with Ed Ray? I like Ed, but it looks like he bought into the Larry Scott regime, hook, line and sinker? He was a big part of the conference keeping Scott on. Would love to hear what he thinks now? I'm sure he is wearing a muzzle.
Ed Ray, in my opinion was a huge problem. How many times did he come to Scott’s and the PAC12’s defense. But I don’t think he is alone. Basically no one seemed to ask questions on important issues.
Overpayment? Well this explains razor thin production budgets, layoffs, eliminating positions all together. The loss of Mike Yam and other quality on-air personalities. The adoption of remote broadcasts. Oh and the inability to provide stability to the Pac-12 CEO Group. It all makes sense now that the truth has emerged.
This mess is sleazier than an episode of Succession. Wher'd the $50m go? Follow the money.
Larry is a true snake in the grass in my humble opinion
I don't feel like we know enough to know if Chief Financial Officer Brent Willman and Pac-12 Networks president Mark Shuken were complicit to the degree that they should be fired, or if they are indeed the scapegoats, because in the corporate world, someone has to be (and Larry Scott and Woody Dixon are long gone), or perhaps this is the convenient excuse to remove them, being holdovers from the Scott era, whether there is an actual reason other than this series of incidents, or just corporate infighting, which is also an all too common practice.
The feeling I continue to have following the seemingly unending series of small to large, and local to conference wide, sub-optimal developments is one of an operation that just doesn't have things buttoned up well at all at hardly any level (though there are occasional positives). A well-organized organization just doesn't have so many things go wrong, and when they do (and some problems are always going to crop up from time to time anywhere), they are addressed quickly and effectively.
Whatever other issues there were with Larry Scott, and therefore the culture of the organization he created and maintained, I've felt all along he was just so out of connect with anything and everybody involved in running the conference that the result has been an ongoing series of issues that just weren't seen coming (by someone), and then there was no clear vision of a correction moving forward.
Much has been made of the fact that Larry just didn't connect, and people from the inside and the outside didn't connect with him. That's a recipe for disasters, even if fully unintentional (which it wasn't always, it seems). Some don't even involve Scott, or Current Pac-12 commissioner George Kliavkoff, for that matter. But perhaps they should.
The results are a long string of things that frequently leave me thinking "This just wouldn't happen in the SEC or B1G. Or the Mt West either, for that matter."