ACC vs. Maryland: Mediation Must be Before July 10, 2014

[arbitragegls]

Unfortunately I have been muzzled...not many jacks & coke going down lately...but an ear to the ground (STEALTH side if you will) has indicated that the court forced Mediation between The ACC and Maryland will take place/has taken place prior to July 10th, 2014.

The Whisper I hear is that the ACC fully expects to keep the $30,000,000+ in distribution that Univ of Maryland was due for the past two years distribution...and that the ACC is going for more.

As background here are two articles that lay the groundwork--both written in June this year in case you missed them. Basically the ACC has a home court advantage...importantly a Court of Appeals panel, rejected unanimously Univ Maryland attempt to throw out the case...Implication is that Univ of Maryland cannot go to NC State Supreme court to appeal to dismiss the case since the Appeals panel voted unanimously...although the NC Supreme court could hear the case if it wanted to...secondly there was no submission made--that anyone knows of--requesting a stop to or date in future for the mediation meeting--that notification needed to be sent to the court in late June. As such the mediation meeting will take place.

Note that the B1G is providing University of Maryland with a $30,000,000 travel advance...is that a coincidence to the fact The ACC is withholding roughly this amount...I do not believe in coincidence and neither Rutgers nor Nebraska received this travel advance...I believe that the B1G had projected a loss in the range of $30,000,000+ to settle the case. Several of us have previously projected the cost to end this suit would be approximately $33,000,000 or more.
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"According to a source, no meeting date has been finalized yet, but the order mandates it must happen before July 10, nine days after Maryland officially migrates from the ACC to the Big Ten, a move announced in November 2012. Shortly thereafter, the ACC filed suit against its longtime member institution, seeking enforcement of a withdrawal payment worth approximately $52 million".

http://www.washingtonpost.com/blogs...mediator-assigned-in-maryland-vs-acc-lawsuit/
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"A state Court of Appeals panel rejected Maryland's bid to dismiss the lawsuit. It was filed in Greensboro, where the ACC is headquartered. The three-judge panel's unanimous decision means Maryland has no automatic right to a state Supreme Court appeal. But the higher state court could choose to hear an appeal".

http://msn.foxsports.com/collegefoo...eserves-acc-lawsuit-over-maryland-exit-111913

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Bottom line appears that if a settlement is not negotiated, the trial will begin in North Carolina within the next 3 months...The ACC is expected to win...although then Univ Maryland can try Federal Court appeal...and if taken, lots of dirty laundry from both sides will come out...Univ Maryland, The ACC and B1G...although that would be interesting, it potentially causes more headaches...I hear whispers that the ACC and Univ of Maryland--supported by B1G interests...will settle. What do you think (other lawyers please respond)?

It's Good to be 'Cuse!! The Order of the 'Cuse Orange..

 

[Chris02M]

long time no hear thought something happened to you. Both sides will settle at slightly less than 52 mil owed like 40(double prior exit fee)

 

[SyracuseMiami]

Great to hear. Keep the info coming. Ready to see this come to conclusion so we can move on as a league.

 

[SU2NASA]

I'm hearing that it's also the deadline for the announcement of Oklahoma to the Big Ten.

Unless things change, of course.

 

[HtownOrange]

Thanks, Arb. Good to see you back.

The ACC has leverage, so long as UMD goes into mediation with intent to settle, the ACC may oblige, probably north of $45MM. Withholdings for the last two years is in the neighborhood of $40.3MM (2013: approx. $19.5MM = 2014: approx. $20.8MM). If UMD comes in with no intent to settle, there is little impetus on the ACC to do so. As the money is in escrow, neither side can touch it until the issue is resolved and a court orders distribution.

The big issue for the ACC is the cost of litigation with is probably in or near the millions of $$$. At some point, it is economically better to settle. If the case were to move through the State courts and head to the Federal courts, based on the document requests to date, costs could easily hit $5MM - $10MM per side.

At some point, UMD will have to cut their losses, too. UMD already voted for the previous exit fee of 1.5 X annual revenue and they probably cannot avoid this in any court. Regarding the increase, UMD failed to win the dismissal of the vote on procedural grounds (the claim was the ACC vote was invalid because ACC bylaws dictated one procedure to bring items forward for votes, they blatantly ignored the exception clause for items needing immediate resolution and the court spanked them for it holding the vote was valid). They will likely have to pay some exit fee and racking up legal fees on what is becoming more of a longshot only hurts them more than a fixed resolution.

I honestly believe the B1G would force a settlement in State court (possibly adding some additional "travel expense") to ensure the settlement is reached before going to Federal court. Neither the ACC nor the B1G truly wants their respective activities revealed publicly. Even though both sides would seek an injunction from releasing the documents to the public, there will be little protection from an open court room and then the media public records requests that would follow. And when one considers that the B1G is primarily big state public schools, they would likely be unable to protect many documents (Northwestern excepted). If there is no Federal case, there will be far less FOIA requests. Just an opinion, nothing more.

 

[Crusty]

Thanks Arb,
Nobody needs non-binding mediation to settle a case. They could have had settlement negotiations any time they liked and probably did have back channel feelers. Apparently, one or both didn't want to settle or couldn't reach a number on which they would settle. This isn't so much about the amount of money the ACC nets - it is about the cost to Maryland - that argues to continuing until they say uncle or lose in court.

The ACC would love to get a decision that would prevent any other member from pulling a Maryland. On the other hand they also risk a bad decision that would have the opposite effect. I think the ACC is more willing to roll the dice with the NC court. Will be interesting to see how it plays out from here.

 

[cmr27]

If there is a $30m-$50m settlement, does Syracuse see any of that money?

 

[TexanMark]

If there is a $30m-$50m settlement, does Syracuse see any of that money?

Pretty sure they would since they were harmed by Maryland leaving.

 

[Scooch]

It's wonderful that we really don't need to care at all about this stuff.

 

[Lou_C]

My gut feeling is that they'd settle for right around what the ACC could withhold.

That just about splits the difference more or less between the $17M exit fee that was in place before and the new exit fee. I don't see either party cutting a substantial check to the other.

To me, that more or less makes sense and is fairly reasonable, although in principle I'm ethically opposed to conferences being able to impose these onerous exit fees by majority vote, basically enslaving some members.

The GOR is different, because every member has to sign, I've got no problem with that.

 

[HtownOrange]

... in principle I'm ethically opposed to conferences being able to impose these onerous exit fees by majority vote, basically enslaving some members.

Were you opposed to the original exit fee of 1.5 X annual TV deal which was unanimously approved of? Just asking because no school was against the exit fee and I am wondering what your insight was at that time.

Also, FSU did not oppose the increase to 3X the annual TV deal, they opposed the procedure by which the vote was made (the court has since upheld the procedure and thus the vote and increase). I have requested elsewhere links to FSU officials denouncing the increase and have not been able to find one, please provide if you are able (seriously, if FSU officials were against the increase on record, it would be interesting to see the whole story).

That leaves UMD who was in talks with the B1G to stand alone against the increased exit fee, but I think everyone sees there is some self dealing in their vote and the following legal actions prove this as they sought to overturn the original exit fee, which they voted for!

I am not looking to stir the pot but I did not hear of any one against the original exit fee, UMD officially against the increased fee and too many bloggers and posters that were speaking of wishful fantasies rather than realities. Think the Dude and promises that if FSU and Clemson jumped to the Big 12 that each Big 12 team would get a $20MM increase annually.

 

[rrlbees]

My gut feeling is that they'd settle for right around what the ACC could withhold. That just about splits the difference more or less between the $17M exit fee that was in place before and the new exit fee. I don't see either party cutting a substantial check to the other. To me, that more or less makes sense and is fairly reasonable, although in principle I'm ethically opposed to conferences being able to impose these onerous exit fees by majority vote, basically enslaving some members. The GOR is different, because every member has to sign, I've got no problem with that.

The ACC will come across as a weak conference if they don't see this through and try to get as much as possible. Settling for something less is weak.

 

[orange79]

My gut feeling is that they'd settle for right around what the ACC could withhold.

That just about splits the difference more or less between the $17M exit fee that was in place before and the new exit fee. I don't see either party cutting a substantial check to the other.

To me, that more or less makes sense and is fairly reasonable, although in principle I'm ethically opposed to conferences being able to impose these onerous exit fees by majority vote, basically enslaving some members.

The GOR is different, because every member has to sign, I've got no problem with that.

You don't have to sign anything to join the conference and agree to abide by the rules (including majority vote)?

 

[syr02esq]

The ACC has to hold firm with its $52MM demand. To offer less is to show weakness. The ACC needs to make a statement to any other ACC team who would think to exit the conference.

 

[Scooch]

The ACC has to hold firm with its $52MM demand. To offer less is to show weakness. The ACC needs to make a statement to any other ACC team who would think to exit the conference.

Why does a "statement" need to be made?

Given the GOR it's unlikely that any member is going to contest the legality of such an agreement and attempt to leave the conference.

I'm not clear as to how the previous exit terms are enforced sets any precedent for the GOR.

 

[Lou_C]

Were you opposed to the original exit fee of 1.5 X annual TV deal which was unanimously approved of? Just asking because no school was against the exit fee and I am wondering what your insight was at that time.

Also, FSU did not oppose the increase to 3X the annual TV deal, they opposed the procedure by which the vote was made (the court has since upheld the procedure and thus the vote and increase). I have requested elsewhere links to FSU officials denouncing the increase and have not been able to find one, please provide if you are able (seriously, if FSU officials were against the increase on record, it would be interesting to see the whole story).

That leaves UMD who was in talks with the B1G to stand alone against the increased exit fee, but I think everyone sees there is some self dealing in their vote and the following legal actions prove this as they sought to overturn the original exit fee, which they voted for!

I am not looking to stir the pot but I did not hear of any one against the original exit fee, UMD officially against the increased fee and too many bloggers and posters that were speaking of wishful fantasies rather than realities. Think the Dude and promises that if FSU and Clemson jumped to the Big 12 that each Big 12 team would get a $20MM increase annually.

I don't think this is correct. They voted against the increase, along with Maryland. They were the only two.

In fact, the previous exit fee, which was what, $17M, FSU voted for that, but only after they and a couple others (Maryland was one) argued it down from what some other schools wanted.

FSU has been pretty consistently against high exit fees all along the way. None of it matters though, now that they signed the GOR.

 

[Lou_C]

You don't have to sign anything to join the conference and agree to abide by the rules (including majority vote)?

Well, sorry, I don't believe the majority should be able to vote whatever they want. I don't believe that the majority should be able to vote to give Syracuse a half revenue share if Clemson and FSU demand it. I don't think the majority should be able to vote to cut scholarships from one program if they decide they want to punish it. If majority simply rules, then there's not end to the possible abuse. Ask Clemson about a certain probation.

Whether these things CAN be done is irrelevant to me...they shouldn't be done. And at some level, conference affiliation should be voluntary. I'm all for compensation, and some teeth to force schools to give an appropriate amount of notice, but I think there's a point where you're trying to hold a team against their will.

Obviously, turns out that limit wasn't reached in the Maryland case, because they left anyway, so I'm not feeling sorry for Maryland. But the intention was clearly to make it so high it's impossible to leave, and I don't think that's appropriate.

It's not just the ACC, the Big 12 exit fee is just as big, and probably the B1G and PAC as well. I just don't think it's right, but it's become less relevant since the GORs, so it's not something that keeps me up.

 

[orange79]

Well, sorry, I don't believe the majority should be able to vote whatever they want. I don't believe that the majority should be able to vote to give Syracuse a half revenue share if Clemson and FSU demand it. I don't think the majority should be able to vote to cut scholarships from one program if they decide they want to punish it. If majority simply rules, then there's not end to the possible abuse. Ask Clemson about a certain probation.

Whether these things CAN be done is irrelevant to me...they shouldn't be done. And at some level, conference affiliation should be voluntary. I'm all for compensation, and some teeth to force schools to give an appropriate amount of notice, but I think there's a point where you're trying to hold a team against their will.

Obviously, turns out that limit wasn't reached in the Maryland case, because they left anyway, so I'm not feeling sorry for Maryland. But the intention was clearly to make it so high it's impossible to leave, and I don't think that's appropriate.

It's not just the ACC, the Big 12 exit fee is just as big, and probably the B1G and PAC as well. I just don't think it's right, but it's become less relevant since the GORs, so it's not something that keeps me up.

You must not like the fact that one vote can elect a president.

Are you really saying that EVERY vote should be unanimous? How would anything get done?

 

[HtownOrange]

I don't think this is correct. They voted against the increase, along with Maryland. They were the only two.

In fact, the previous exit fee, which was what, $17M, FSU voted for that, but only after they and a couple others (Maryland was one) argued it down from what some other schools wanted.

FSU has been pretty consistently against high exit fees all along the way. None of it matters though, now that they signed the GOR.

I am willing to review any l inks to an FSU official. I do recall reading where FSU's position was that they disagreed with the procedure (not the regular procedure but an alternative procedure used only when necessary) and that is why FSU voted no. Again, I have posted this request for FSU officials stating they were against the increase on this board and others and have yet to read any credible source that FSU was against anything other than the procedure of the vote. As for being against high exit fees, with GORs, exit fees are small potatoes.

 

[Phillymoose]

And at some level, conference affiliation should be voluntary.

This.

If you are relying on exit fees and GORs to hold your conference together, then you are in trouble anyway. These things are reinforcements -e.g. a way to pledge commitment, but at the end of the day if schools, teams, companies, people, etc. want to leave, they should be able to do so.

This is 'murica, dammit.

 

[HtownOrange]

Well, sorry, I don't believe the majority should be able to vote whatever they want. I don't believe that the majority should be able to vote to give Syracuse a half revenue share if Clemson and FSU demand it. I don't think the majority should be able to vote to cut scholarships from one program if they decide they want to punish it. If majority simply rules, then there's not end to the possible abuse. Ask Clemson about a certain probation.

Whether these things CAN be done is irrelevant to me...they shouldn't be done. And at some level, conference affiliation should be voluntary. I'm all for compensation, and some teeth to force schools to give an appropriate amount of notice, but I think there's a point where you're trying to hold a team against their will.

Obviously, turns out that limit wasn't reached in the Maryland case, because they left anyway, so I'm not feeling sorry for Maryland. But the intention was clearly to make it so high it's impossible to leave, and I don't think that's appropriate.

It's not just the ACC, the Big 12 exit fee is just as big, and probably the B1G and PAC as well. I just don't think it's right, but it's become less relevant since the GORs, so it's not something that keeps me up.

Respectfully, the majority cannot willy nilly vote for this or that. The increase was negotiated and put in place so that the TV deal would have some stability (pre GOR). The deal was necessary and the exit fee is far less than what a B1G or Pac12 team would lose if they left their respective conference. The Big 12's deal was upheld in principle but rejected in the court because there were multiple methods of calculating the exit fee so Colorado and UNL were able to negotiate a perceived better deal. TAMU and Mizzou were not, the B1g 12 had corrected the bylaws by then.

Using UMD as a no vote when they were double dealing is not a good argument. They were trying to minimize their losses and voted no, that is self dealing and not in the interest of the conference. In truth, the ACC could be pushing a fraud claim v. UMD.

The intent of the increase was to provide stability of the conference for the new TV negotiations, not to make it so expensive that it is impossible for a team to leave. This is an important issue and what UMD has essentially argued but has failed to date to win in court. Teams are free to leave as they wish; however, there are third parties that have vested interests in the conference make-ups and leaving one conference has an effect that causes damages. Exit fees are simply liquidated damages clauses making life easier on each party and the court to determine the value in place of extended litigation over actual damages. The GORs are making the exit fees of less importance.

 

[HtownOrange]

This.

If you are relying on exit fees and GORs to hold your conference together, then you are in trouble anyway. These things are reinforcements -e.g. a way to pledge commitment, but at the end of the day if schools, teams, companies, people, etc. want to leave, they should be able to do so.

This is 'murica, dammit.

Teams have the freedom to leave and associate where they like, no one or no thing is stopping them. However, third parties have vested interests, which make the conferences valuable in the first place. As such, there need to be consequences to breaking these agreements. Remember, exit fees and GORs are self imposed and agreed upon. Any school can leave when they wish.

 

[Scooch]

Isn't college athletics awesome?!?!

It's all about the student-athletes, right?!?!

 

[HtownOrange]

Isn't college athletics awesome?!?!

It's all about the student-athletes, right?!?!

Once upon a time, there was a college sports team made up entirely of academically inclined student athletes...

Would the SEC be able to field teams?

 

[CousCuse]

Respectfully, the majority cannot willy nilly vote for this or that. The increase was negotiated and put in place so that the TV deal would have some stability (pre GOR). The deal was necessary and the exit fee is far less than what a B1G or Pac12 team would lose if they left their respective conference. The Big 12's deal was upheld in principle but rejected in the court because there were multiple methods of calculating the exit fee so Colorado and UNL were able to negotiate a perceived better deal. TAMU and Mizzou were not, the B1g 12 had corrected the bylaws by then.

Using UMD as a no vote when they were double dealing is not a good argument. They were trying to minimize their losses and voted no, that is self dealing and not in the interest of the conference. In truth, the ACC could be pushing a fraud claim v. UMD.
r
The intent of the increase was to provide stability of the conference for the new TV negotiations, not to make it so expensive that it is impossible for a team to leave. This is an important issue and what UMD has essentially argued but has failed to date to win in court. Teams are free to leave as they wish; however, there are third parties that have vested interests in the conference make-ups and leaving one conference has an effect that causes damages. Exit fees are simply liquidated damages clauses making life easier on each party and the court to determine the value in place of extended litigation over actual damages. The GORs are making the exit fees of less importance.

A fraud claim against UMD , The B1G and other "business interests" that perpetrated it.