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  1. #1

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    Court Preserves Lawsuit over UMD exit Fees


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    Old Line Hokie's Avatar
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    Quote Originally Posted by Frozen Hokie View Post
    Hard to believe it was a year ago that Maryland announced that they were leaving the ACC.

    As for the $52 million exit fee, I doubt they end up paying the whole thing. I still think this case is eventually settled out of court before June with Maryland reluctantly paying just half of the exit fee.

  3. #3
    Quote Originally Posted by Old Line Hokie View Post
    Hard to believe it was a year ago that Maryland announced that they were leaving the ACC.

    As for the $52 million exit fee, I doubt they end up paying the whole thing. I still think this case is eventually settled out of court before June with Maryland reluctantly paying just half of the exit fee.
    So random neuron firing. Let's say UMd can't pay whatever the fee is for a while. Can the ACC take some facilities as collateral? Byrd Stadium of the ACC has a fun ring to it. I know it won't happen, but it's a wacky thought. Like not being able to pay a lawsuit against you so you have to be the other party's butler

  4. #4

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    Quote Originally Posted by Old Line Hokie View Post
    Hard to believe it was a year ago that Maryland announced that they were leaving the ACC.

    As for the $52 million exit fee, I doubt they end up paying the whole thing. I still think this case is eventually settled out of court before June with Maryland reluctantly paying just half of the exit fee.
    From a strategic point of view, why would the ACC allow them to settle out for anything less than the full $52 million? The conference will probably already have withheld close to $25 million from Maryland by the time they actually leave anyway. Having this uncertainty of not knowing exactly how much it will cost to leave the conference will help keep other schools from thinking about jumping ship.

    If they were to settle with Maryland for $25 million, then instantly all the other schools in the conference will know that it will only cost them $25 million instead of $52 million to leave. I think the ACC will just keep this case in litigation for years to send a message to all of the other schools that the conference is serious about collecting the full exit fee if they ever decide to leave. Maybe in another 7 or 8 years the ACC will settle with Maryland right before the jury trial begins, assuming the ACC is in a solid, stable position at that time. But I would not expect a settlement in this case for at least several years.
    Last edited by 133304Hokie; Tue Nov 19 2013 at 06:30 PM.

  5. #5
    BUGGZY's Avatar
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    Quote Originally Posted by HokieDevil View Post
    So random neuron firing. Let's say UMd can't pay whatever the fee is for a while. Can the ACC take some facilities as collateral? Byrd Stadium of the ACC has a fun ring to it. I know it won't happen, but it's a wacky thought. Like not being able to pay a lawsuit against you so you have to be the other party's butler
    i think we're still withholding their TV/bowl/NCAA revenue share from 2012-13 and this year, so that is probably $30-35M right there!
    "This no more resembles that than something unlike something else resembles that." - Loosely quoting PHNC

  6. #6

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    Quote Originally Posted by 133304Hokie View Post
    From a strategic point of view, why would the ACC allow them to settle out for anything less than the full $52 million? The conference will probably already have withheld close to $25 million from Maryland by the time they actually leave anyway. Having this uncertainty of not knowing exactly how much it will cost to leave the conference will help keep other schools from thinking about jumping ship.

    If they were to settle with Maryland for $25 million, then instantly all the other schools in the conference will know that it will only cost them $25 million instead of $52 million to leave. I think the ACC will just keep this case in litigation for years to send a message to all of the other schools that the conference is serious about collecting the full exit fee if they ever decide to leave. Maybe in another 7 or 8 years the ACC will settle with Maryland right before the jury trial begins, assuming the ACC is in a solid, stable position at that time. But I would not expect a settlement in this case for at least several years.
    Good point!

  7. #7
    Old Line Hokie's Avatar
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    Quote Originally Posted by 133304Hokie View Post
    From a strategic point of view, why would the ACC allow them to settle out for anything less than the full $52 million? The conference will probably already have withheld close to $25 million from Maryland by the time they actually leave anyway. Having this uncertainty of not knowing exactly how much it will cost to leave the conference will help keep other schools from thinking about jumping ship.

    If they were to settle with Maryland for $25 million, then instantly all the other schools in the conference will know that it will only cost them $25 million instead of $52 million to leave. I think the ACC will just keep this case in litigation for years to send a message to all of the other schools that the conference is serious about collecting the full exit fee if they ever decide to leave. Maybe in another 7 or 8 years the ACC will settle with Maryland right before the jury trial begins, assuming the ACC is in a solid, stable position at that time. But I would not expect a settlement in this case for at least several years.
    Maybe so? I just see the ACC and Maryland trying to end this before July 1, 2014.

  8. #8

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    Quote Originally Posted by Old Line Hokie View Post
    Maybe so? I just see the ACC and Maryland trying to end this before July 1, 2014.
    We'll have to wait and see, but I doubt the ACC really wants to try to do anything to help Maryland out at this point. If the ACC can withhold $30+ million from Maryland for the next 5 or 6 years while they drag out the litigation, financially crippling Maryland athletics in the process as they enter the B1G, then why wouldn't they? Maryland left the ACC essentially over finances, so the best revenge would be to put their athletics department in an even worse financial situation as a result of their departure.

    This has the added benefit of making it look financially stupid for any other schools to attempt to leave the ACC the way that Maryland did. For the ACC, this isn't really about getting an extra $15-20 million out of Maryland's exit fee, it is about self-preservation and sending the right message to any other schools who might be thinking about jumping ship. The ACC simply can't let Maryland go without paying a high price.
    Last edited by 133304Hokie; Wed Nov 20 2013 at 12:19 AM.

  9. #9
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    Quote Originally Posted by 133304Hokie View Post
    We'll have to wait and see, but I doubt the ACC really wants to try to do anything to help Maryland out at this point. If the ACC can withhold $30+ million from Maryland for the next 5 or 6 years while they drag out the litigation, financially crippling Maryland athletics in the process as they enter the B1G, then why wouldn't they? Maryland left the ACC essentially over finances, so the best revenge would be to put their athletics department in an even worse financial situation as a result of their departure.

    This has the added benefit of making it look financially stupid for any other schools to attempt to leave the ACC the way that Maryland did. For the ACC, this isn't really about getting an extra $15-20 million out of Maryland's exit fee, it is about self-preservation and sending the right message to any other schools who might be thinking about jumping ship. The ACC simply can't let Maryland go without paying a high price.
    Two motives you mention, "best revenge" and "sending the right message" are what The ACC must never do.

    If MD could prove the exit fee was increased to $52 million to punish a school who leaves, or to deter any school from leaving, the the conference has acted illegally. Any school can withdraw from any organization whenever they want to. It is against the law to interfere with that decision. Exit fees are intended to be a reasonable substitute for actual calculated financial damages, not deterrent, nor punishment for exiting.

  10. #10

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    Quote Originally Posted by HokieDevil View Post
    So random neuron firing. Let's say UMd can't pay whatever the fee is for a while. Can the ACC take some facilities as collateral? Byrd Stadium of the ACC has a fun ring to it. I know it won't happen, but it's a wacky thought. Like not being able to pay a lawsuit against you so you have to be the other party's butler
    I have always felt that if Maryland didn't pay the full fee the ACC should basically blackball them in all sporting events going forward. This would include just refusing to even play in any voluntary tournament or bowl or event that Maryland would be a participant . Maryland knew the terms of departure prior to making their decision, I don't feel sorry for them.

    Ultimately the B1G will have to step in and provide Maryland with some help to remedy the situation. They have been silent so far but you know Maryland wouldn't have made the move without some assurance the financial sting wouldn't be totally absorbed by them. That is another reason to insist on full payment, Maryland and the B1G have the means to pay in full.

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