Has Conference Realignment at Last Reached a Lull?

[TerryD]

Hey Terry, if the parties don't reach a settlement, do you think that it is more probable that we will see a jury trial or a bench trial?

I would want a jury if I were representing Maryland, not to overtly question the absolute integrity of an elected North Carolina state court judge....

I don't know if either party requested a jury trial or not.

 

[CL82]

I have been predicting a settlement of $27 million or so for over a year now. We shall see.

I think that is will be less, quite possibly significantly less, but we'll see.

 

[06029]

I think that is will be less, quite possibly significantly less, but we'll see.

Besides wishful thinking, why?

The basis of MD's claim is that it was not passed in accordance with bylaws and is punitive in nature. So then the answer reverts back to in a worse case the prior departure fee which was in the $20mm range. And that was something MD voted for.

If the ACC was on shaky ground, this would have been settled a long time ago. Both sides must feel confident or else it would not be dragging on. In MD's case, anything less than $50mm is a win so I can see them dragging it out. If the ACC felt that it was going to be a significant set back to less than $20mm, they would have settled. Going to trial will give all parties, including the B1G, some pretty ugly black eyes. It is never good to watch sausage being made.

 

[Seaa Blue]

Besides wishful thinking, why?

If the ACC was on shaky ground, this would have been settled a long time ago.

On the other hand... If the ACC was on solid ground there would be no punitive exit fee.

 

[06029]

On the other hand... If the ACC was on solid ground there would be no punitive exit fee.

The exit fee is the exit fee. The BE had one as does the AAC and every conference. How it was established is key. If it was established in accordance with bylaws, then MD loses one leg of its defense (See BE vs BC; only part of CR that ever went to trial. The BE lost because it did not follow its bylaws). On the punitive nature, that is something that all of our legal posters have gone on about in many other threads. That is where MD may have a case but if they are going to be making equal money in the B1G (or more), then as a mere lay person, the question of it being punitive is not really clear to me particularly if their media market is as lucrative and key as the B1G intimates that it is. And this is where the ugly parts will unfold if it goes to court. Discovery is a two way tool and could drag a lot of key people, secret meetings, documents, etc, on both sides into the light.

Of course, the money grubbing lawyers want this to drag on as long as possible, because, at the end of the day, they are the only ones that win no matter the result. They only lose if there is a quick settlement.

 

[TerryD]

Besides wishful thinking, why?

The basis of MD's claim is that it was not passed in accordance with bylaws and is punitive in nature. So then the answer reverts back to in a worse case the prior departure fee which was in the $20mm range. And that was something MD voted for.

If the ACC was on shaky ground, this would have been settled a long time ago. Both sides must feel confident or else it would not be dragging on. In MD's case, anything less than $50mm is a win so I can see them dragging it out. If the ACC felt that it was going to be a significant set back to less than $20mm, they would have settled. Going to trial will give all parties, including the B1G, some pretty ugly black eyes. It is never good to watch sausage being made.

Not only did Maryland agree to the increase of the exit fee to $20 million, it was the one pushing hard for it.

Kind of tough to say it is punitive and unenforceable when it was your idea in the first place.

I look at it this way. The ACC wants $52-60 million (current exit fee is 3X revenues). Maryland wants to pay zero but I think that they are estopped from denying the $20 million exit fee is valid since they proposed it.

So, I think that a reasonable settlement is somewhere between $20 million and , say, $52 million. I tend to be a conservative, civil defense oriented attorney so I place it closer to the former than the latter. The ACC has withheld about $30-32 million in conference distributions from Maryland in an escrow fund.

I think that a deal will be struck at around $27 million with the ACC returning about five million of what has been withheld and the parties go home. Time will tell.

 

[TerryD]

On the other hand... If the ACC was on solid ground there would be no punitive exit fee.

On the other hand... If the ACC was on solid ground there would be no punitive exit fee.

The Big 12 has one. The Big Ten has one. The Pac 12 has one. Are they all on shaky ground?

Only the SEC is without an exit fee.

 

[TerryD]

The exit fee is the exit fee. The BE had one as does the AAC and every conference. How it was established is key. If it was established in accordance with bylaws, then MD loses one leg of its defense (See BE vs BC; only part of CR that ever went to trial. The BE lost because it did not follow its bylaws). On the punitive nature, that is something that all of our legal posters have gone on about in many other threads. That is where MD may have a case but if they are going to be making equal money in the B1G (or more), then as a mere lay person, the question of it being punitive is not really clear to me particularly if their media market is as lucrative and key as the B1G intimates that it is. And this is where the ugly parts will unfold if it goes to court. Discovery is a two way tool and could drag a lot of key people, secret meetings, documents, etc, on both sides into the light.

Of course, the money grubbing lawyers want this to drag on as long as possible, because, at the end of the day, they are the only ones that win no matter the result. They only lose if there is a quick settlement.

A redundancy? Lol.

All businesses are money grubbing, including doctors, architects, engineers, bankers, stock brokers, oil companies, etc....

 

[06029]

A redundancy? Lol.

All businesses are money grubbing, including doctors, architects, engineers, bankers, stock brokers, oil companies, etc....

I find that lawyers, from personal experience, don't like to entertain settlement offers to early in the process. They claim they can get more, but 95% of the more is eaten up by their fees. In the mean time, my stress, blood pressure and other life shortening factors including sitting through depositions and hearings take away from my own money grubbing need to do my day job. I have let one or two go after I listened to their advice and chose to settle against their advice. Current legal rep and I are much more in tune on things.

 

[CL82]

The Big 12 has one. The Big Ten has one. The Pac 12 has one. Are they all on shaky ground?

Only the SEC is without an exit fee.

Exit fee isn't the issue. The question is whether the fee accurately approximates damages. The ACC has a big problem in that shortly after MD announced their departure the ESPN sweetened the ACC's TV deal. Tough to show damages when you are making more money after their departure. I can see a judge saying no exit fee is due but limiting it to the circumstances of MD's departure.

 

[Pat125]

Not only did Maryland agree to the increase of the exit fee to $20 million, it was the one pushing hard for it.

Kind of tough to say it is punitive and unenforceable when it was your idea in the first place.

You are correct that Maryland pushed the $20 million exit fee. While I personally think that is high, Maryland should pay the $20 million. But Maryland did not push the grossly punitive $50 million fee.

What should have happened is the ACC presidents should have met and agreed to $20 million and signed a slime proof contract preventing Swofford from withholding any more, wish each other luck, and move on. But now I understand why Maryland held out, since there was no such agreement in the works, and Maryland is out more than $20 million at the moment. Frankly, I wouldn't mind if Maryland gets all there money back.

My prediction is $20 million minus interest on the excess withheld by the ACC.

 

[Calamitous]

Tomorrow (7/10/14) may be a very interesting day if UMCP and the ACC come to an agreement, but I can't see where that settlement will affect CR expansion. But it may cause other conferences to revisit their exit fees or create a GORs if they don't already have one.

But I have a hunch that the top tier schools are getting ready to separate themselves from the smaller FBS universities (officially) this summer. I doubt we see movement by the P5 conferences to expand, but I wouldn't be surprised if we see a new division (not necessarily just for the P5) created in the coming weeks. Other things that may make CR talk pick back up are the SEC's new cable network which should be rolling out any day, the O'Bannon case and NCAA ruling on a football conference championship game.

CR expansion may be winding down, but I think there is much to come that will affect just about every school in the current FBS system. Feels like it has been eerily quiet lately.

 

[upstater]

I still say Virginia has reason to move, but they need a partner.

 

[billybud]

You are correct that Maryland pushed the $20 million exit fee. While I personally think that is high, Maryland should pay the $20 million. But Maryland did not push the grossly punitive $50 million fee.

What should have happened is the ACC presidents should have met and agreed to $20 million and signed a slime proof contract preventing Swofford from withholding any more, wish each other luck, and move on. But now I understand why Maryland held out, since there was no such agreement in the works, and Maryland is out more than $20 million at the moment. Frankly, I wouldn't mind if Maryland gets all there money back.

My prediction is $20 million minus interest on the excess withheld by the ACC.

I think the settlement will be for whatever has already been withheld....In truth, I don't see much actual damage done.

But one could spin damages based on loss of market...If Maryland was sooooo valuable to the Big Ten, then they had to be valuable to the ACC, etc.

 

[Seaa Blue]

The Big 12 has one. The Big Ten has one. The Pac 12 has one. Are they all on shaky ground?

Only the SEC is without an exit fee.

The Pac and Big Ten do not have an exit fee on top of the GoR.

 

[B1GOSU]

In a few short years, Maryland can use the ACC exit fee equivalent as toilet paper. They will be rolling in $$$.

 

[Calamitous]

I still say Virginia has reason to move, but they need a partner.

I'm curious what you and others think UVa's reason might be. It perplexes me, as I live in Virginia and I haven't met a Hoo yet that wants to be in the B1G. Maybe a "Wallace Loh" type will become UVa's president some day and force a B1G move. I know a ton of UMCP alum were completely shocked by their move to the B1G, as they were as much in the dark as Swofford. I guess you just never know.

 

[upstater]

I'm curious what you and others think UVa's reason might be. It perplexes me, as I live in Virginia and I haven't met a Hoo yet that wants to be in the B1G. Maybe a "Wallace Loh" type will become UVa's president some day and force a B1G move. I know a ton of UMCP alum were completely shocked by their move to the B1G, as they were as much in the dark as Swofford. I guess you just never know.

Most northerly of the old ACC, the NoVa region is increasingly invaded by more money and transplants, the school's mission is most similar to B1G schools like Michigan, and the biggest reason of all: $20m more a year.

 

[Calamitous]

Most northerly of the old ACC, the NoVa region is increasingly invaded by more money and transplants, the school's mission is most similar to B1G schools like Michigan, and the biggest reason of all: $20m more a year.

I think Michigan and Northwestern are the only B1G schools similar to UVa.

73% of UVa's students are in-state, many that might be from NoVa. But that's no different than every other State university in Virginia. The best reason I see is the money. Even then, I'm not sure UVa needs it that bad... they're financially loaded as it is.

 

[Plains&Lakes]

I think Michigan and Northwestern are the only B1G schools similar to UVa.

73% of UVa's students are in-state, many that might be from NoVa. But that's no different than every other State university in Virginia. The best reason I see is the money. Even then, I'm not sure UVa needs it that bad... they're financially loaded as it is.

---All of which makes UConn a better fit for the Big Ten than Virginia, which is prime ACC timber. One can say with considerably less conviction are Pittsburg and Syracuse, which were once discussed in the same sentence as Rutgers. Unless Buffalo has time to upgrade and develop, it is hard to find a true 16 to go with UConn. I believe the ACC GOR was not the true impediment for the Big Ten; it was the fact the culture, geography and tradition of the traditional, original ACC teams are more important to its members than Big Ten membership. You could say that the GOR the a "symptom" of the ACC school's value-not the "disease." I am a decades long Big Ten alum, but there are valid reasons for schools to stay in long term quality conferences and yes, they can be more important than money.

 

[Plains&Lakes]

---All of which makes UConn a better fit for the Big Ten than Virginia, which is prime ACC timber. One can say with considerably less conviction are Pittsburg and Syracuse, which were once discussed in the same sentence as Rutgers. Unless Buffalo has time to upgrade and develop, it is hard to find a true 16 to go with UConn. I believe the ACC GOR was not the true impediment for the Big Ten; it was the fact the culture, geography and tradition of the traditional, original ACC teams are more important to its members than Big Ten membership. You could say that the GOR the a "symptom" of the ACC school's value-not the "disease." I am a decades long Big Ten alum, but there are valid reasons for schools to stay in long term quality conferences and yes, they can be more important than money.

I must say that the one thing that causes me to doubt my reasons for Virginia not wanting to come to the Big Ten is that it lists every Big Ten University except Nebraska as its peer. GT, VT, FSU and NCST also list many Big Ten as peers as well. Because the Big Ten can provide extra money and has sound academics and the CIC, one can never totally exclude one ACC school leaving. And there are so many of them. You could say that the law of large numbers and time could work for the Big Ten. On the other hand, it has not yet worked for China with Taiwan.

 

[Adios]

I'm curious what you and others think UVa's reason might be. It perplexes me, as I live in Virginia and I haven't met a Hoo yet that wants to be in the B1G. Maybe a "Wallace Loh" type will become UVa's president some day and force a B1G move. I know a ton of UMCP alum were completely shocked by their move to the B1G, as they were as much in the dark as Swofford. I guess you just never know.

They have statues in Richmond for Confederate heros. What do you expect?

 

[Calamitous]

They have statues in Richmond for Confederate heros. What do you expect?

I'm Switzerland on the Union/Confederate thing (born in Virginia but raised by New Englanders). I always laugh when I see backhanded comments about the south or the north. It's been almost 150 years and we still have the same stereotypes. Some people probably assume I have a stars and bars bumper sticker on my car and carry around a musket waiting for Sherman to make another march. I will say, Virginia is a rapidly growing state and 90% of the growth comes from northern transplants like myself.

 

[IMind]

I think the Big 12 will expand before anyone else will. It will have more to do with college football playoffs and their lack of a playoff game. The rest of college football beat on the Big Ten for years about it.. It'll take a few years though... two Big 12 teams getting into the playoffs would certainly accelerate the scenario though. I know it's a fairly long shot to happen... but I'm hoping two schools catch lightning in a bottle.

 

[btstimpy]

Not only did Maryland agree to the increase of the exit fee to $20 million, it was the one pushing hard for it.

Kind of tough to say it is punitive and unenforceable when it was your idea in the first place.

I look at it this way. The ACC wants $52-60 million (current exit fee is 3X revenues). Maryland wants to pay zero but I think that they are estopped from denying the $20 million exit fee is valid since they proposed it.

So, I think that a reasonable settlement is somewhere between $20 million and , say, $52 million. I tend to be a conservative, civil defense oriented attorney so I place it closer to the former than the latter. The ACC has withheld about $30-32 million in conference distributions from Maryland in an escrow fund.

I think that a deal will be struck at around $27 million with the ACC returning about five million of what has been withheld and the parties go home. Time will tell.

Maryland's Lawyers just got tossed off the case.
http://www.ncbusinesslitigationrepo...sity-of-marylands-lawyers-on-a-pro-hac-basis/

Do you know what the size of the Big Ten Exit Fee is? If it is higher than the ACC's how can Maryland argue that the ACC's is punitive if it signed up for one larger in the B1G? I see zero reason for the ACC to settle for anything below $52 million.