Posted November 19, 2013

University of Maryland loses appeal in lawsuit over $52 million ACC exit fee

NCAAF
The Maryland Terrapins are 6-4 in their final season in the ACC. (G. Fiume/ Getty Images)

The Maryland Terrapins are 6-4 in their final season in the ACC. (G. Fiume/ Getty Images)

A North Carolina appeals court unanimously rejected the University of Maryland’s call to dismiss a lawsuit seeking the $52.3 million exit penalty levied against the school by the ACC, according to the Associated Press.

Maryland incurred the fine when the school said that it would be leaving the ACC for the Big Ten after the 2013-14 season. The ACC brought suit against Maryland shortly after the announcement and sought the largest exit fee in NCAA history.

The university had argued that it is an arm of the state and therefore should be protected against the lawsuit. The Terrapins may still appeal the ruling to a higher court.

The suit in North Carolina is one of two about the school’s exit. The school sued the ACC in January and argued the fee is an illegal penalty. That suit, in Maryland, is on hold until the North Carolina case is resolved.

MANDEL: Bowl Projections: USC’s upset of Stanford creates Pac-12 chain reaction

In an effort to discourage schools from leaving to chase larger TV contracts, the ACC tripled the penalty for leaving shortly before Maryland left the conference.


43 comments
Kam Mac
Kam Mac

I no longer support UMD. They even pay alums to tweet favorable things about a rediculous move.

stabmasterarson21
stabmasterarson21

Yikes....Maryland's athletic program was almost on verge of bankruptcy which is one alleged reason of why they needed to make the B1G move.

JoeScott
JoeScott

Ironic when you consider that the ACC snuck around in the dark for years luring teams away from The Big East.

ll316
ll316

Good. Screw Maryland for jumping ship.  Big 10 fans certainly never wanted them (or Rutgers) anyway.  Heck, as a basketball fan I'd rather watch them play Duke than Michigan.

RandyHayes
RandyHayes

Which all goes to prove that college athletics is all about $$$$$$$'s and NOTHING ELSE.

Keats1821
Keats1821

You have to wonder how much this actually affects the ACC anymore, as it isn't quite in the state of flux that surrounded the initial vote to raise the fee. Both FSU and Maryland voted against the measure, and at the time both were (regardless of what FSU was saying) looking to leave the conference. Maryland is leaving, but the question surrounds the exit fee and whether other ACC schools are paying close attention to it. The addition of Louisville to the conference next year and Notre Dame being added to the schedule (not to mention Swofford's belief that he can get them to commit to full membership) strengthens the conference. FSU, Clemson, Miami and VT are typically strong programs, and the rest of the ACC seems to be improving. So it appears that the conference is gaining strength. But, if Maryland succeeds in showing that the exit fee is in fact illegal, and not just that they should not have to pay it, do other conferences come running back to poach FSU, Clemson, VT, etc?Would any of those schools leave the ACC for the Big 12, Pac-12 or SEC? Is the ACC currently strong enough to retain the larger schools?

dudedadesq
dudedadesq

Judges hearing a lawsuit in Carolina by Maryland is about as fair as referees in Carolina during the ACC tourney....

KidHorn
KidHorn

I don't see how MD can possibly pay the fee. Unless they have a huge jump in alumni contributions, which I don't see happening since their alumni are probably mad about the conference move. The reason behind the move was they weren't profitable in the ACC.

hornfaust1
hornfaust1

To explain to the simpletons.  All this was today was a denial of the dismissal of the lawsuit of Maryland.  They still have to go to trial about exit fee vs. exit penalty.  The exit fee is supposed to represent liquid damages.  The ACC said Louisville is an upgrade, so not sure how they are going to prove damages.  Maryland contends that the fee should only be on damages based on operating costs.  The ACC wants 3 times the operating costs arbitrarily.   Thus making it a exit PENALTY.  A exit FEE is legal so that when you leave to do business elsewhere you aren't hurting the people you were working with.   An exit PENALTY is designed to prevent people from leaving a contract and doing business elsewhere and is ILLEGAL.  

Pretty much what everyone sees the ACC doing, creating a exit penalty so high, no one can ever afford to leave.  Imagine if your phone carrier raised your early termination fee from $200 to $600 because 2/3 of is customers agreed.  You'd say "F-off"

Maryland is not bound to the ACC for life, they should be able to leave to do business as they please and pay a reasonable sum. like all the other schools changing conferences. 


mystafugee
mystafugee

I hate to break it to Maryland alum but the Big Ten took you for the same reason the SEC took Missouri: it's the TV market you're in, has nothing to with your success or lack of.  If the U. of Maryland was located in North Dakota, you seriously think the Big Ten would sniff you?  

357
357

I am from the SEC so I have no bias here.  Seems as though Maryland and another University voted against the exorbitant exit fee.   It is not reasonable that other schools can vote ANY amount of a penalty and collect.  If  $50 million, why not $100 million or $200??  

The SEC has no exit penalty.   If someone wants to leave, so be it.  I relaize that it can mess up a TV contract and future financial obligations but there has to be a reasonable penalty and $50 million is not it.  IMHO

BigBubba
BigBubba

This is as ridiculous as that RichRod suit trying to get out of paying WVU when leaving to go to UMichigan.  It is very clear what the penalty is, and Maryland has to suck it up.  Turns out switching conferences, alienating alumni and fans, ruining rivalries, and tweaking your nose at your traditional fanbase has expensive consequences.  I hope that the courts uphold this.  Big Ten expansion has ruined college sports.

horsley1953
horsley1953

Wait: The ACC changed the penalty after Maryland was already in the ACC? If I'm in the restaurant business, I'm going to start raising prices exponentially after people order. There's legal precedent now :-).

TallPaul
TallPaul

The affirmed the denial of MD's motion to dismiss, not the case in chief.  there will still be a hearing/trial on the matter.   Read more closely  


Rickapolis
Rickapolis

I doubt if anyone is surprised that a North Carolina judge ruled in favor of the ACC. When  Maryland appeals to a court outside of ACC country they will stand a better chance. That said, they are getting what they deserve.  I've lost all respect, not just for the decision, which some excuse for financial reasons, but the dirty, back-room style in which it was carried out.  A secret meeting and a quick decision before any part of it was made public. I've lived in Maryland my entire life, but if no U. of M. team ever wins another athletic contest that would be fine with me. The athletic department was already inept (Randy Edsall instead of James Franklin as head football coach), but now they are all corrupt as well. They've sacrificed all honor. 

hornfaust1
hornfaust1

@ll316 HAHAAHHAHAHAHAHAHAHA  screw Maryland.  Yet is was okay for the ACC to raid the Big East of 7 teams?

hornfaust1
hornfaust1

@Keats1821 That won't matter.  Even if the exit fee goes down to 20-30 million which I think it will.  The Grant of Rights agreement binds the ACC for ten years.

in 2024 we will see how well the ACC is, just like the ACC took 10 years to kill the Big East.  10 years from now the ACC will start to break apart when FSU and Clemson realize how much they carry the conference.

ll316
ll316

@KidHorn The Big Ten Network provides the most revenue of any television network.  They'll be fine.

dallasal10
dallasal10

You obviously don't follow college sports. 4 or 5 years ago Maryland was ranked in the top 15 (11 or 12th I believe) in the NCAA standings for all college sports (not just basketball and football).  I have not looked at it lately.   They'll eventually be very competitive in the Bib 10 in Basketball and Football. I do wish they would have stayed in the ACC - as the ACC will continue to climb in stature in all sports, and the demographic growth is still towards the south.  (Michigan was the only U.S. State to lose population in the Census between 2000 and 2010.).  

hornfaust1
hornfaust1

@mystafugee So what?  We are in a media market and have academics that place in the middle of Big Ten.  We also have a national championship in football and basketball.  So there are 4 programs in Big Ten I'd say are better at athletics.  Other than that we'll be right in middle.  So please tell me your point?  You think anyone would take Purdue or Iowa if they weren't already in?

ll316
ll316

@BigBubba Couldn't agree more.  I'm a Big 10 fan and I hate their expansion.  I didn't mind PSU as much because they were an independant, but I hated Nebraska and I hate Maryland and Rutgers even more.  Stop murdering rivalries with expansion.

hornfaust1
hornfaust1

@BigBubba you are stupid as hell.  The ACC has expanded twice in 10 years?  And now they are mad?

Rickapolis
Rickapolis

@TallPaul "A North Carolina appeals court has upheld the $52.3 million exit penalty levied against the University of Maryland by the ACC". I read most closely. Your sentence makes no sense. And is not supported by the article.

Peter R1
Peter R1

@Rickapolis The move makes little sense to me, the Big 10 must have a much higher guaranteed payout to schools for TV revenue and performance. Academically its about a wash. Recruiting wise I don't see how they are going to compete. But Rick Randy Edsall is a good coach, trust me I know. He won at UConn, a basketball school, have you seen what UConn football has become in the few short years since he left. With Maryland's move to the Big 10 next year he will probably get fired after they regress in 2014 so you won't have to deal with him long.

JordanSchatz
JordanSchatz

@Rickapolis A big time football program corrupt? You don't say. I'm a huge Maryland fan and attended the college but the ACC is just upset that one of its founding members is headed for greener pastures, where more money can be made and the recruiting is better. The Terps had to backdoor it or it wouldn't have had happened when they wanted it to happen. Get off your high horse. The school is poised to make way more money playing in the Big 10 than the ACC. Which in turn, will allow the school to grow even larger, both as an athletic program and as an educational hub. 

dudedadesq
dudedadesq

@dallasal10 You are correct, but the Big 10 doesn't really care about anything except football first, and basketball second.  Tell a Big 10 fan that Maryland soccer and lacrosse are at or near the top yearly, and they could care less. 

KevinAustin
KevinAustin

@dallasal10 Maryland will never be competitive in Big 10 football. Maryland better be worried about competing at basketball, which it has not been doing in the ACC. Maryland hasn't made it past the sweet 16 in 10 years! Maryland has even missed the last two NCAA tournaments. Maryland has had a losing record in the ACC the last 3 seasons. 

blacklips
blacklips

@hornfaust1 @mystafugee 
Maryland can't make the NCAA tourney anymore in basketball and is a bottom feeder in football. Keep harping on the past but your program is a joke.

TallPaul
TallPaul

@Rickapolis @TallPaul I apologize for not being more clear...my comment was directed at the SI writing staff who in my opinion botched the factual accuracy of this article and not at you

JamesMBarnes
JamesMBarnes

@Rickapolis...you must have missed the opening sentence; "  A North Carolina appeals court unanimously rejected the University of Maryland’s call to dismiss a lawsuit seeking the $52.3 million exit penalty levied against the school by the ACC, according to the Associated Press." 

The ACC is suing Maryland for the 52.3 exit fee....prior to trial an Appeals panel rejected Maryland's bid to dismiss the lawsuit......

Rickapolis
Rickapolis

@hornfaust1 I made a clear and succinct comment. Jordan disagreed, but his comment was also clear and succinct. As was blacklips's. And then you come along. With no support for a buffoonish comment. Next time think more and learn from your betters. Maybe you won't embarrass yourself as badly.

blacklips
blacklips

@JordanSchatz LOL - better recruiting pastures? Florida and Georgia are two of the best recruiting states in the country, you won't be finding that in the B1G. Maryland is a bottom feeder in the ACC and is being replaced by a superior school in Louisville. Two of the worst managed athletic departments in the country (RU and Maryland) will rot in the rust belt 10.

ll316
ll316

@dudedadesq @dallasal10 Which is exactly why we don't care about the addition of Maryland.  

That being said, the Big 10 is usually at the top of the conference list when looking at championships in all sports.  Do we care?  Nope.  But it's still nice.

hornfaust1
hornfaust1

@KevinAustin @dallasal10 Most of that due to having zero money due to horrible ACC contract.

But yea Michigan rocks.  Nearly lost to a UConn team we crushed in football.  Things are cyclical.  I am sorry you can only see right now.

blacklips
blacklips

@hornfaust1  

I take it you struggle with reading comprehension. That was in response to him saying the recruiting in the B1G is better. It simply isn't. 

hornfaust1
hornfaust1

@blacklips @JordanSchatz MD and NJ have two of most fertile recruiting grounds in country.  Go check rivals or scout.  MD doesn't recruit Georgia or Florida much at all idiot.