The two numbers are 1.5 times operating revenue and 3.0 times operating revenue. Maryland voted for the 1.5 times, but Maryland did not vote for the 3.0 times. Those translate to $26 million and $52 million respectively. Don't expect the court to come up with another arbitrary number. The ACC thinks it followed proper procedure to change the multiplier from 1.5 to 3.0. Maryland is arguing that the ACC did not follow proper procedure to change it.
Yep...the loss of different programs may have very different individual damage effects. But the purpose of an agreed upon exit fee as a stand in for actual damage is so that you do not have to go through the painful process of determining an actual damage. Which can be fairly ephemeral.
On an aside, BC football receives the same monetary amount from the conference as FSU football. And Duke basketball the same amount as FSU basketball. The equality goes both ways
Do you have a cite to a source for the 1.5 multiple? I know the current fee is 3.0, but I hadn't heard that the previous one was 1.5.
Revenue sharing doesn't imply actual damages, by the way. Since the ACC has more than 12 members, it can suffer the loss of one and still host a conference championship game for no one to watch -- and the remaining members can actually improve their financial positions. For example, if Wake Forest bolts for the _____ league, and the ACC's TV contract is renegotiated, the size of the ACC's revenue pie probably won't drop, and there will be fewer slices cut from it. Setting aside the exit fee, the question of actual damages is all based on the specific member that leaves.
Now, Maryland's argument will be, look, we stink in everything but lacrosse, and Louisville and UConn were lined up to replace us in an instant; both were the best basketball programs in the Big East, and played in BCS bowls very recently. How was the ACC actually damaged by our departure?
The ACC's argument will be, there's a reason why the B1G wanted a stinky Maryland team -- the Baltimore and D.C. markets. That's how we were damaged.
I just went back and read it. It is 1.25 rather than 1.5, but same point applies. I knew it was more than 1, but it's not 1.5. 1.25 would be $21.77 million using operating revenue from 2012. . On page 5 of the lawsuit, point 22, it states that the ACC Council of Presidents adopted Dr. Wallace Loh of Maryland's amendment to make the damages 1.25 time operating revenue in 2011.
http://www.documentcloud.org/documents/525109-acc-vs-university-of-maryland-college-park.html
That's interesting. What's also interesting is that these meetings happened on September 13 and 14, 2011, and the Syracuse/Pitt invites were leaked to the press that weekend (Sep. 16-17).
I'll never forget driving home from that embarrassing loss to Iowa State and having my cell phone blow up with texts that night.
With that in mind (i.e., the ACC's expansion from 12 to 14), I don't get the ACC's argument in paragraph 23, that "the potential harm to ACC member institutions in the event of the withdrawal of one or more members of the Conference substantially increased." Why? Adding Syracuse and Pitt created a two-team buffer to protect their right to hold a championship game that no one watches.
I'll say it again, the ACC ended up being enriched not damaged by MD's departure. That is an important point that is conveniently ignored by some posters. MD leaves and the ACC ends up making more money, but they want MD to pay a staggering amount anyway even though they weren't damaged. Sure sounds punitive rather than compensatory doesn't it?
The whole key to this is whether or not the ACC violated its own bylaws in implementing it. If they didn't, UMD is on the hook for the full $52M. If they did, then, thats a whole other ballgame. It really is that simple.
Yep...I have thought all along, as does FSU's legal team and BOT Chair, that the $52 million will be judged to be punitive.
The ink was barely dry on it before FSU's BOT Chair declared it to be punitive...
It's a little more complicated than that, according to the North Carolina Supreme Court.
Liquidated damages are a sum which a party to a contract agrees to pay or a deposit which he agrees to forfeit, if he breaks some promise, and which, having been arrived at by a good-faith effort to estimate in advance the actual damage which would probably ensue from the breach, are legally recoverable or retainable . . . if the breach occurs. A penalty is a sum which a party similarly agrees to pay or forfeit . . . but which is fixed, not as a pre-estimate of probable actual damages, but as a punishment, the threat of which is designed to prevent the breach, or as security . . . to insure that the person injured shall collect his actual damages.
Liquidated damages may be collected; a penalty will not be enforced.
Kinston v. Suddreth, 266 N.C. 618, 620 (1966) (citations omitted).
I'll say it again, the ACC ended up being enriched not damaged by MD's departure. That is an important point that is conveniently ignored by some posters. MD leaves and the ACC ends up making more money, but they want MD to pay a staggering amount anyway even though they weren't damaged. Sure sounds punitive rather than compensatory doesn't it?
FSU was also the other 'no' vote in a 10-2 outcome. So, of course, that is his view.
If it was that punitive, don't you believe that there would've been more than just two dissenting votes? I do.
Yep...I have thought all along, as does FSU's legal team and BOT Chair, that the $52 million will be judged to be punitive.
The ink was barely dry on it before FSU's BOT Chair declared it to be punitive...
Not if the assenting universities had a vested interest in keeping the conference together and believed that the higher fee would deter members from defecting.
I don't know why the ACC is going to the mat on this one. I get it for Maryland - they really have nothing to lose - but there's an odd edge to the ACC's pursuit.
The Big East's corpse has been sued by Pitt, Rutgers and West Virginia - all, basically, in an attempt to circumvent the 27-month rule. All, predictably, were quickly settled with a few extra bucks. (Or more than a few in the case of WV who wanted to leave immediately.)
The ACC seems more defensive here, especially given that the conference isn't worried about its imminent demise.
Until Maryland's counter-claim. I suspect that they may be reevaluating that analysisSwofford, I think, has little incentive to make it any easier for Maryland...on a personal as well as business basis.
There was practically no time difference from MD's departure until ESPN ponied up more cash. It will very difficult (read as impossible) for the ACC to show that they were damaged. I wouldn't go to trial if I were the ACC. I sure would if I am Maryland. Now if the ACC offers to settle for a nuisance value, that changes the analysis.The ACC has worked to enrich itself by other means since the Maryland departure such as the offering of membership to Louisville, the extra contributions of Notre Dame, and the Grant of Rights. All of these things are fine and dandy, and they all have absolutely nothing to do with Maryland's departure or the liquidated damages caused by Maryland's departure. The only one even triggered by Maryland's departure was the offering of Membership to Louisville. But that doesn't mitigate any of Maryland's responsibility for the pre-determined liquidated damages.
Until Maryland's counter-claim. I suspect that they may be reevaluating that analysis
There was practically no time difference from MD's departure until ESPN ponied up more cash. It will very difficult (read as impossible) for the ACC to show that they were damaged. I wouldn't go to trial if I were the ACC. I sure would if I am Maryland. Now if the ACC offers to settle for a nuisance value, that changes the analysis.
Is the $20 million punitive? Well it's less egregious, but that doesn't mean that it was intended as liquidated damages.
I never seen someone focus so much effort on consistently expressing clearly deep-seeded animosity for a University....on another school's message board.