Maryland’s $157 million counterclaim: ACC recruited B1G schools

[lv99]

The time difference is approximately 6 months. Maryland departed in November, 2012. The ACC got the GOR in May, 2013, and ESPN revised its numbers over the Summer, 2013. So the time difference is 6-8 months. The revision was based on GOR and not anything to do with membership.

The Exit Fee is intended as liquidated damages as stated in the ACC Constitution. Liquidated Damages is precicely what it is called in the language.

The problem is that they really have to be liquidated damages. They can't just call them liquidated damages. If the true liquidated damages are less, then paying more would be punitive. There are people from the ACC who have publicly said Louisville was an upgrade. That makes it hard to claim a whole lot as true damages.

 

[CL82]

The time difference is approximately 6 months. Maryland departed in November, 2012. The ACC got the GOR in May, 2013, and ESPN revised its numbers over the Summer, 2013. So the time difference is 6-8 months. The revision was based on GOR and not anything to do with membership.

The Exit Fee is intended as liquidated damages as stated in the ACC Constitution. Liquidated Damages is precicely what it is called in the language.

So your position is that the ACC was damaged to the tune of $52M in Nov. 2012 but by May 2013 it had through it's brilliant leadership made up those damages and was actually earning more money. Mmmm, good luck with that.

 

[SouthronCross]

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.

Do you really believe that UNC or UVA would have voted for that amount, if it was so punitive? Both schools had multiple options where CR was concerned. Yeah, they wanted to help keep the ACC together, but, they're not going to vote for something like that if they feel its excessive.

 

[CL82]

Do you really believe that UNC or UVA would have voted for that amount, if it was so punitive? Both schools had multiple options where CR was concerned. Yeah, they wanted to help keep the ACC together, but, they're not going to vote for something like that if they feel its excessive.

I don't think that's the analysis.

 

[SouthronCross]

I don't think that's the analysis.

Oops. My bad.

 

[UConn9604]

Yes. And the Exit Fee is not a set amount because it is not a penalty. It is damages based upon a variable amount relative to the individual school's contribution to operating revenue of the overall league. When that party leaves, it puts a hole in the operating revenue that is their share. So the ACC Exit Fee is designed as damages and not a penalty. It is not designed to be punitive either. The debate on the multiplier is valid. Maryland agreed to 1.25 times operating revenue and not 3.0 times operating revenue. But at the same time Maryland as an active member of the ACC is contractually obligated to follow the ACC Constitution which is controlled by 75% vote of the Council of Presidents. That 75% vote set the multiplier for the operating revenue as the pre-estimate of damages to 3.0. That 75% is also voted on in a much larger quorum than 3 out of 4. It was 10 out of 12 implying that more debate and careful consideration would be required to reach the 75% out of the larger pool of votes.

This bold part makes no sense. From what I understand, the ACC's operating budget is one school's worth of the pie. If they have 12 schools, they divide the total dollars in the door by 13 (12 schools + 1 for the ACC's operating budget). When a party leaves, unless and until a television contract is required to be renegotiated or otherwise changes, there is no "hole" in the conference's revenue.

It is designed as liquidated damages, sure, but it's for the Court to decide whether it serves as such. I'm not sure that's the case.

Let's put it this way: if Maryland's claims in paragraphs 23-32 are correct, the ACC is going to have a very hard time, in large part because it too "is contractually obligated to follow the ACC Constitution":

http://s3.documentcloud.org/documents/1005553/01-14-13-counterclaim-answer.pdf

 

[itgoeslike]

And by denying Maryland's appeal to dismiss, the North Carolina Court of Appeals declared Maryland an assenting member because it had agreed to be bound by the 75% vote of the ACC Council of Presidents as an active member of the league.

Despite Maryland's negative vote on increasing the exit fee, "each member, including the University of Maryland, has agreed to be bound by the vote of the Council," Judge Robert N. Hunter Jr. wrote in the appeals court's decision

http://www.usatoday.com/story/sport...t-fee-52-million-court-appeal-denied/3640547/

I couldn't locate within the article (and it is just an article) where the North Carolina Court of Appeals declared Maryland an assenting member. What they did do was reject MD's appeal for dismissal of the lawsuit in NC. I haven't read the decision, but the Court, by stating that each member has agreed to be bound by the vote of council, wasn't ruling on the case per se, but was likely indicating that there is sufficient grounds for the case to proceed, which is where these final determinations will play out in the event they don't settle.

 

[itgoeslike]

And by denying Maryland's appeal to dismiss, the North Carolina Court of Appeals declared Maryland an assenting member because it had agreed to be bound by the 75% vote of the ACC Council of Presidents as an active member of the league.

Despite Maryland's negative vote on increasing the exit fee, "each member, including the University of Maryland, has agreed to be bound by the vote of the Council," Judge Robert N. Hunter Jr. wrote in the appeals court's decision

http://www.usatoday.com/story/sport...t-fee-52-million-court-appeal-denied/3640547/

As I was drafting my previous response, I also noticed that the article you quoted above includes information that contradicts your assertion that the original exit fee exceeds $20M. The court appears to calculate the exit fee at the time of MD's departure at $17.4 million.

"Maryland's representative on the ACC's Council of Presidents, which has the authority to alter the conference's governing constitution, voted against increasing the penalty from what the court calculated would have been a fee of about $17.4 million."

 

[SouthronCross]

I couldn't locate within the article (and it is just an article) where the North Carolina Court of Appeals declared Maryland an assenting member. What they did do was reject MD's appeal for dismissal of the lawsuit in NC. I haven't read the decision, but the Court, by stating that each member has agreed to be bound by the vote of council, wasn't ruling on the case per se, but was likely indicating that there is sufficient grounds for the case to proceed, which is where these final determinations will play out in the event they don't settle.

Thats indeed what the ACC's first brief was. To see if the case could proceed.

 

[billybud]

An interesting thing about this conversation.....is that the ACC-Maryland case has far more legs on this board and the BGN (WVU) Big 12 board then on the ACC boards that I have perused.

Long off of Warchant and forgotten. GT Hive Sportscenter...forgotten...Hokie Haven..ditto

It seems that the interest in the outcome is heightened here because it may have impact upon a future conference.

 

[WestHartHusk]

An interesting thing about this conversation.....is that the ACC-Maryland case has far more legs on this board and the BGN (WVU) Big 12 board then on the ACC boards that I have perused.

Long off of Warchant and forgotten. GT Hive Sportscenter...forgotten...Hokie Haven..ditto

It seems that the interest in the outcome is heightened here because it may have impact upon a future conference.

If you can't see why it would have more interest on this board than the ACC boards I don't know what to tell you. GT, FSU, VaTech...these programs are "safe" and can focus on athletics. We have been left to die by your conference and cable TV benefactor, so now we have to hope for chaos and this is our best (and unlikely) shot right now.

 

[billybud]

Oh...I see that and acknowledged that...and furthermore acknowledge that the WVU interest is more laced with Schadenfreunde although there is a tinge of that on UConn boards as well.

 

[specialisthusky]

Oh...I see that and acknowledged that...and furthermore acknowledge that the WVU interest is more laced with Schadenfreunde although there is a tinge of that on UConn boards as well.

....Says the guy with over 700 posts on the board of a team the Acc refuses to accept.

 

[WestHartHusk]

Oh...I see that and acknowledged that...and furthermore acknowledge that the WVU interest is more laced with Schadenfreunde although there is a tinge of that on UConn boards as well.

That sounds about right. Although, I think we are hoping for the opportunity to feel Schandefreunde (if that makes any sense).

Which is sad as hell considering we are heading into the part of our AAC schedule that is actually exciting (home against Memphis, Cinci, SMU...road against L'Ville) then the two tourneys.

 

[billybud]

....Says the guy with over 700 posts on the board of a team the Acc refuses to accept.

Yes...says that guy. At least is isn't the 13,000+ posts on the WVU board.

 

[pj]

And by denying Maryland's appeal to dismiss, the North Carolina Court of Appeals declared Maryland an assenting member because it had agreed to be bound by the 75% vote of the ACC Council of Presidents as an active member of the league.

Despite Maryland's negative vote on increasing the exit fee, "each member, including the University of Maryland, has agreed to be bound by the vote of the Council," Judge Robert N. Hunter Jr. wrote in the appeals court's decision

http://www.usatoday.com/story/sport...t-fee-52-million-court-appeal-denied/3640547/

One of the oddities here is that in contracts between entities in different states, lawyers routinely insert clauses saying that lawsuits will be settled in federal court.

If the ACC bylaws state that disputes between a member institution and the league will be litigated in North Carolina state courts, no wonder other schools complain that Tobacco Road has too much power. What are the odds a North Carolina state judge will rule against UNC/Duke/Wake/NC State?

 

[UConn9604]

One of the oddities here is that in contracts between entities in different states, lawyers routinely insert clauses saying that lawsuits will be settled in federal court.

If the ACC bylaws state that disputes between a member institution and the league will be litigated in North Carolina state courts, no wonder other schools complain that Tobacco Road has too much power. What are the odds a North Carolina state judge will rule against UNC/Duke/Wake/NC State?

I'd be far more worried about a jury than a judge.

 

[WestHartHusk]

I'd be far more worried about a jury than a judge.

Then you don't live in an area where judges are elected.

 

[btstimpy]

This bold part makes no sense. From what I understand, the ACC's operating budget is one school's worth of the pie. If they have 12 schools, they divide the total dollars in the door by 13 (12 schools + 1 for the ACC's operating budget). When a party leaves, unless and until a television contract is required to be renegotiated or otherwise changes, there is no "hole" in the conference's revenue.

It is designed as liquidated damages, sure, but it's for the Court to decide whether it serves as such. I'm not sure that's the case.

Let's put it this way: if Maryland's claims in paragraphs 23-32 are correct, the ACC is going to have a very hard time, in large part because it too "is contractually obligated to follow the ACC Constitution":

http://s3.documentcloud.org/documents/1005553/01-14-13-counterclaim-answer.pdf

It makes a lot of sense. And Maryland's 22 and 23 will be dismissed in 5 seconds or less. The ACC has never prevented anyone from leaving. In fact the terms and conditions for leaving are explicitly spelled out in the Constitution. And for 23, a number of schools didn't get together to do anything. The Council of Presidents voted to amend the Constitution by 75% vote bindng all members to the amendment including Maryland. And the North Carolina Court of Appeals has explicitly told Maryland this.

 

[btstimpy]

As I was drafting my previous response, I also noticed that the article you quoted above includes information that contradicts your assertion that the original exit fee exceeds $20M. The court appears to calculate the exit fee at the time of MD's departure at $17.4 million.

"Maryland's representative on the ACC's Council of Presidents, which has the authority to alter the conference's governing constitution, voted against increasing the penalty from what the court calculated would have been a fee of about $17.4 million."

The reporter has that amount incorrect. It is $17.4 times 1.25.

 

[btstimpy]

An interesting thing about this conversation.....is that the ACC-Maryland case has far more legs on this board and the BGN (WVU) Big 12 board then on the ACC boards that I have perused.

Long off of Warchant and forgotten. GT Hive Sportscenter...forgotten...Hokie Haven..ditto

It seems that the interest in the outcome is heightened here because it may have impact upon a future conference.

It's on all good realignment boards. It's here. It's on that 750 page realignment thread on Shaggy Bevo. It's on the CSNBBS board. But I can't get anyone on the UVA board to give a flip about it. We're too self absorbed with football recruiting and this basketball team to care at all about Maryland's lawsuit with the ACC. We just beat Maryland's basketball team this week for the sixth time in a row, and the ACC chants were loud. All we got was a crass tweet from Scott Van Pelt "Everyone will chant ACC at Maryland this year. It's ironic for UVA though. Where do they think they would be without the grant of rights?".

Well Mr. Moron. The answer is right where we are. I wonder if he's still being paid to put positive spin on the Maryland move?

 

[UConn9604]

It makes a lot of sense. And Maryland's 22 and 23 will be dismissed in 5 seconds or less. The ACC has never prevented anyone from leaving. In fact the terms and conditions for leaving are explicitly spelled out in the Constitution. And for 23, a number of schools didn't get together to do anything. The Council of Presidents voted to amend the Constitution by 75% vote bindng all members to the amendment including Maryland. And the North Carolina Court of Appeals has explicitly told Maryland this.

I think you are misunderstanding the holding of the Court of Appeals. Appellate courts generally don't do what you've described, and North Carolina's didn't break the rule this time, either.

Did you read paragraphs 27 and 28? How about 40 and 41? If those are true, the ACC has a major problem.

Does anyone know when the ACC is due to file a response to the Answer and Counterclaims? The N.C. court system's online records are hardly clear on this.

 

[mrhandyman]

Fishy...while there are business reasons for going to the mats...as a deterrent if others think it will be an easy settlement and backslap..

I believe that it is also personal...

Swofford was PO'd that Maryland dodged his calls for 48 hours before the announcement. PO'd that the Maryland team had snookered him in by professing loyalty and that they were in it for the long run while working out the details of the conference switch.

Swofford, I think, has little incentive to make it any easier for Maryland...on a personal as well as business basis.

Where have we heard this before? Oh yeah, when he was doing it to the Big East. Karma!

 

[CL82]

An interesting thing about this conversation.....is that the ACC-Maryland case has far more legs on this board and the BGN (WVU) Big 12 board then on the ACC boards that I have perused.

Long off of Warchant and forgotten. GT Hive Sportscenter...forgotten...Hokie Haven..ditto

It seems that the interest in the outcome is heightened here because it may have impact upon a future conference.

Interestingly, it is visitors that drive this thread. Not complaining though, for most part the view points are interesting.

 

[SouthronCross]

One of the oddities here is that in contracts between entities in different states, lawyers routinely insert clauses saying that lawsuits will be settled in federal court.

If the ACC bylaws state that disputes between a member institution and the league will be litigated in North Carolina state courts, no wonder other schools complain that Tobacco Road has too much power. What are the odds a North Carolina state judge will rule against UNC/Duke/Wake/NC State?

Seeing as how the ACC was incorporated in the State of NC, and, is bound by NC corporate law, isn't it only natural that the case be adjudicated in NC?

You keep saying that Tobacco Road has too much power. Well, TR's wishes on expansion were overruled in 2003, again in 2011, and, in 2013. Nobody held a gun to the heads of other ACC schools, and, forced them to vote with TR in the past. That is fallacy.