The game’s contract says that failure by either party to take part in the game within 12 months of its scheduled date means the school that can’t play faces a material breach of the agreement and requires liquidated damages of $1.5 million.
However, the contract has a force majeure provision that would allow a party to not pay the penalty if an event occurs beyond reasonable control, like a catastrophe or an order by the government. It remains to be seen whether the COVID-19 pandemic falls under that description.
North Carolina’s game against Auburn, originally scheduled for Sept. 12 in Atlanta as the Chick-Fil-A Kickoff Game, was also ruled out as soon as the SEC announced its plans for a 10-game conference-only schedule.
UNC’s termination clause with the game’s sponsor, Peach Bowl, Inc., calls for liquidated damages of $3 million, although this contract also includes a similar force majeure clause.
North Carolina was given 16,852 tickets, valued at $3.1 million, to sell for the game in Mercedes-Benz Stadium. UNC was guaranteed a total payout of $3 million for selling its ticket allotment.
James Madison’s conference, the Colonial Athletic Association canceled its football season on July 17, and the school suspended all fall sports competition starting Aug. 10.
In October, UNC signed an amendment agreement to its original contract with JMU to move the game to Sept. 19 with a guaranteed $600,000 to be paid to the Dukes for participating.
Like the other contracts, this one also features a force majeure clause that can be used due to “an unforeseen catastrophe or disaster such as fire, flood, earthquake, war, confiscation, by order of government, military or public authority or prohibitory or injunctive orders of any competent judicial or other government authority.”
Although UConn was only expected to receive $1 million in combined guarantees for its games against North Carolina, Virginia, Ole Miss, San Jose State and Illinois, the Huskies’ contract with the Tar Heels calls for a $1.5 million termination clause.
This contract also features a force majeure clause, but because UConn was the first FBS program to suspend its 2020 fall football season due to the COVID-19 pandemic, it’s unclear how that early action would affect a judge’s leniency when reviewing the contract.
Combining these contracts, UNC could be facing over $6 million in damages if the COVID-19 pandemic isn’t found to be covered under all of the force majeure clauses. In the 2018-19 fiscal year, North Carolina football generated $39 million in revenue.
With the uncertainty of how these contracts will be resolved still an issue, this puts even more pressure on UNC athletics following the announcement that the athletic department is furloughing several full-time staff members.
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