As indicated in Friday's Thread: ACC-Maryland moving toward Settlement

[AlaskaSU]

I hope you're right because it'd be a good deterrent to other schools leaving but I wouldn't get overly confident. This could drag out for years if the parties don't compromise. Also, i work with competent attorneys daily and never got a 90% chance of winning on anything, yet alone an issue of first impression.

This is not a case of proving innocence or guilt. It is a contract entered into by all parties with full knowledge and their own attorneys. The typical reason for contract invalidation is fraud either by withholding information or misrepresentation. Since fraud is not an issue there appears to be absolutely no grounds for invalidation. A judge cannot invalidate without reason. The size of the exit fee has no bearing on its legal validity. On the other hand, the ACC has plenty of reason to stand firm.

In addition, Maryland cannot afford to let this drag on. A judge could award payment plus interest. 50 million today is not worth the same as 50 million ten years from now. You better believe that the ACC will ask for interest. Why wouldn't they? The reason for the largest possible exit fee is to create the largest possible barrier against exodus. If they cut it in half for Maryland they would be cutting in half for everyone. Ain't happening.

 

[Alsacs]

This case won't be settled unless Maryland gives the entire amount. The law is on the ACC side. Our Husky fan again doesn't know the law. Its a liquidated damages provision in the bylaws of the ACC. The only way Maryland could have won the suit is if they proved the ACC violated due process when they amended the liquidated damages provision from withdrawal of 1.5 times the annual payout to 3x times the annual payout.

Florida State and Maryland voted no to the increase we know why Florida State voted no and it was legitimate because their President felt the required notice wasn't given by the ACC on the vote to amend the withdrawal thus he was giving his university legal protection because that is what his general council and BoT told him to vote now. We don't know why Maryland voted no whether they felt the same reason or because they were negotiating with the B1G and didn't want to pay more. The fact none of the pleadings that have been leaked by Maryland include this due process violation as their reason for relief would tend to show the courts that it was for monetary reasons they voted no to the increase rather than the due process. The only problem for the ACC is that under civil procedure rule 12 you can't never waive any due process claims in your initial filing and lose the ability to amend them after the fact like you can non-due process claims. Thus, Maryland could and probably has added this due process claim to the complaint. However, I don't know if the ACC actually violated its on bylaws when it scheduled that vote to increase the withdrawal fee/liquidated damages provision. If the ACC had any decent in-house council they wouldn't have, and I would think their lawyers are good.

 

[Btstimpy]

As you know, on Friday I posted this in the thread... "Glimmer of Network and NYC".. at the end of thread:

Additionally, the Maryland law suit is moving forward...and I would not be surprised with something percolating to discussion in a reasonable time frame...and it should be all good.

It's Good to be 'Cuse!! The Order of the 'Cuse Orange..
arbitragegls, Friday at 8:00 PMEditDeleteReport
#1Reply

Obviously the whispers were a bit louder than indicated...and the read between the lines was not too obvious...at any rate, by now you know that the Washington Post broke the story today:
http://www.washingtonpost.com/blogs...maryland-vs-acc-lawsuit/?wpmk=MK0000203&clsrd

What is interesting is that the expectation from within the ACC is it will be a win...Maryland needs to schedule some ACC teams in some sports such as LAX; B1G has set aside nearly $30,000,000 in travel incentive for Maryland (to use as it sees fit); and the ACC is holding nearly $33,000,000 dollars of Maryland ACC monies.

I have heard that both B1G and ACC want to get this finalized prior to Maryland entering the B1G...and especially now since the ACC and B1G are working hand in hand with the other P5 conferences, they don't want this argument to continue...look for a settlement within the next 2 months...both sides claim victory...and Maryland can do that by agreeing to pay less than $52,000,000...I believe as said in much earlier threads that the ACC will get $28,0000,000- $35,000,000...and now, everyone can get back to "peace" at least for a few more days.

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

I've expected for a while that the ACC would call it a day with the amount withheld as offset (i.e. $33 million), but I don't see that as a win at all. The ACC should be paid the entire exit fee. And the idea of scheduling Maryland for LAX or anything else is ludicrous. Tell them to think Denver. And definitely not schedule basketball or football. Think Iowa. There is no reason for anyone in the ACC to schedule Maryland in anything. I realize Syracuse scheduled a football series, but I'm assuming that is out of some relationship with Randy Edsall.

 

[orange79]

I've expected for a while that the ACC would call it a day with the amount withheld as offset (i.e. $33 million), but I don't see that as a win at all. The ACC should be paid the entire exit fee. And the idea of scheduling Maryland for LAX or anything else is ludicrous. Tell them to think Denver. And definitely not schedule basketball or football. Think Iowa. There is no reason for anyone in the ACC to schedule Maryland in anything. I realize Syracuse scheduled a football series, but I'm assuming that is out of some relationship with Randy Edsall.

Agreed about lax, and any other sport. If they want to be in the B1G, let them entertain their fans with Michigan, Penn St, O$U, and Rutgers. They have JHU in the league for a local rival. No need to keep scheduling them. Let's see how their SOS does with a steady diet of Rutgers and Michigan...

 

[Toga]

I've expected for a while that the ACC would call it a day with the amount withheld as offset (i.e. $33 million), but I don't see that as a win at all. The ACC should be paid the entire exit fee. And the idea of scheduling Maryland for LAX or anything else is ludicrous. Tell them to think Denver. And definitely not schedule basketball or football. Think Iowa. There is no reason for anyone in the ACC to schedule Maryland in anything. I realize Syracuse scheduled a football series, but I'm assuming that is out of some relationship with Randy Edsall.

Yes we have a relationship with Randy Edsall - we all pretty much think he is a tool.

 

[Alsacs]

I've expected for a while that the ACC would call it a day with the amount withheld as offset (i.e. $33 million), but I don't see that as a win at all. The ACC should be paid the entire exit fee. And the idea of scheduling Maryland for LAX or anything else is ludicrous. Tell them to think Denver. And definitely not schedule basketball or football. Think Iowa. There is no reason for anyone in the ACC to schedule Maryland in anything. I realize Syracuse scheduled a football series, but I'm assuming that is out of some relationship with Randy Edsall.

Honestly playing Maryland in football is the only sport I would see a benefit. Their program is never going to be good year in and year out and its a game we should win at home and last year we beat them pretty easily at College Park. We scheduled them because of the Edsall relationship plain and simple. I doubt we will play more than 2 per decade.

 

[jgeorge322]

This is not a case of proving innocence or guilt. It is a contract entered into by all parties with full knowledge and their own attorneys. The typical reason for contract invalidation is fraud either by withholding information or misrepresentation. Since fraud is not an issue there appears to be absolutely no grounds for invalidation. A judge cannot invalidate without reason. The size of the exit fee has no bearing on its legal validity. On the other hand, the ACC has plenty of reason to stand firm.

In addition, Maryland cannot afford to let this drag on. A judge could award payment plus interest. 50 million today is not worth the same as 50 million ten years from now. You better believe that the ACC will ask for interest. Why wouldn't they? The reason for the largest possible exit fee is to create the largest possible barrier against exodus. If they cut it in half for Maryland they would be cutting in half for everyone. Ain't happening.

who said this is an issue of innocence or guilt? liquidated damages clauses can be invalidated for a number of reasons, including if they're viewed as excessive or punitive.

 

[Alsacs]

who said this is an issue of innocence or guilt? liquidated damages clauses can be invalidated for a number of reasons, including if they're viewed as excessive or punitive.

This liquidated damages provision most likely won't be seen as either excessive or punitive(especially in an NC court) because Maryland is leaving the B1G because of the alleged increase in TV money they would get from the B1G. Thus, 52 million dollars may seem like a lot, but if Maryland is going to be receiving 45 million a yr from 20s million a yr from the ACC right now its not punitive or excessive. Maryland needs to show the ACC violated its bylaws procedure when it amended the incrase from 1.5x the annual payout to 3x at the annual payout.

 

[jgeorge322]

This liquidated damages provision most likely won't be seen as either excessive or punitive(especially in an NC court) because Maryland is leaving the B1G because of the alleged increase in TV money they would get from the B1G. Thus, 52 million dollars may seem like a lot, but if Maryland is going to be receiving 45 million a yr from 20s million a yr from the ACC right now its not punitive or excessive. Maryland needs to show the ACC violated its bylaws procedure when it amended the incrase from 1.5x the annual payout to 3x at the annual payout.

i think what you are describing is a red herring and irrelevant. if i was maryland, i'd get an economic expert to try and calculate what the actual damages are caused by maryland leaving the conference. my guess is there is an argument the conference isn't damaged at all, especially with the newly negotiated tv contracts. then, id argue that $52 million is punitive based off that calculation.

 

[Alsacs]

i think what you are describing is a red herring and irrelevant. if i was maryland, i'd get an economic expert to try and calculate what the actual damages are caused by maryland leaving the conference. my guess is there is an argument the conference isn't damaged at all, especially with the newly negotiated tv contracts. then, id argue that $52 million is punitive based off that calculation.

The ACC can't sue for the loss of the Baltimore media market or any potential loss of earnings from not having those markets for the ACC network. Thus, the economic expert's analysis would be flawed and the court wouldn't care to be honest if they were trying to be fair. This liquidated damages provision isn't excessive or punitive if the courts looked at the damage that would be inflicted on Maryland if it was enforced. If the B1G's figures are accurate Maryland would be doubling their annual TV money going from the ACC to the B1G what is punitive or excessive in making them pay 52 million dollars or 3x the ACC payout?

The law is on the ACC's side why else would Maryland file that dumb counter-suit to try and force a settlement by scaring the ACC or their ridiculous suit in Maryland when the ACC bylaws state all court proceeding should be filed in North Carolina. Maryland's lawyers trying to forum shop isn't smart when it pisses judges off when their are no merits for such filings and even the Maryland court threw out a portion of the lawsuit and stated the rest would be continued till the proceeding finished up in NC.

 

[jgeorge322]

im telling you how much maryland makes in the big 10 is irrelevant. there is no basis to say that somehow reflects the amount of money the acc loses by maryland leaving.

to say the ACC has lost the baltimore media market is speculative. further, the ACC has gained notre dame, louisville, syracuse and pittsburgh. i think one could argue its a wash. i doubt the ACC would want to admit otherwise.

i just don't get the overconfidence. this article from january 2014 says there may be an argument the exit fee should only be $17 million.

http://www.testudotimes.com/2014/1/15/5310038/maryland-acc-lawsuit-explanation-details-big-ten

i wouldn't call the anti-trust claim without merit. the ad damnum may be high but that doesn't matter. i'm sure both sides have credible arguments on these issues.

 

[Alsacs]

im telling you how much maryland makes in the big 10 is irrelevant. there is no basis to say that somehow reflects the amount of money the acc loses by maryland leaving.

to say the ACC has lost the baltimore media market is speculative. further, the ACC has gained notre dame, louisville, syracuse and pittsburgh. i think one could argue its a wash. i doubt the ACC would want to admit otherwise.

i just don't get the overconfidence. this article from january 2014 says there may be an argument the exit fee should only be $17 million.

http://www.testudotimes.com/2014/1/15/5310038/maryland-acc-lawsuit-explanation-details-big-ten

i wouldn't call the anti-trust claim without merit. the ad damnum may be high but that doesn't matter. i'm sure both sides have credible arguments on these issues.

The anti-trust claim is irrelevant IMO. Again, I think the ACC is going to win this case if it goes to trial we can agree to disagree.

 

[IthacaMatt]

Don't they have to show that the ACC will be out $50 million to award $50 million in damages?

I think one issue is that a trial could end up disclosing some stuff that could be embarrassing or damaging for different parties. I think it will be settle soon and in the $30 to $35 million range.

No, they don't. That's the point of liquidated damages clauses - the amount of damages in the event of a breach must be hard to prove, hard to figure out. If you could easily put a dollar amount on it, then liquidated damages are not appropriate - you would just measure the actual harm caused.

 

[IthacaMatt]

i think what you are describing is a red herring and irrelevant. if i was maryland, i'd get an economic expert to try and calculate what the actual damages are caused by maryland leaving the conference. my guess is there is an argument the conference isn't damaged at all, especially with the newly negotiated tv contracts. then, id argue that $52 million is punitive based off that calculation.

It's hard to measure the damage of conference destabilization. When the Big 10 moved for Maryland, there was talk about them going after UNC and UVA next. That could have destroyed the conference, or at least crippled it like the ACC did to the Big East. That's where the potential harm was the most. And that is certainly hard to quantify, because the gutting of the ACC did not take place. But that's what Maryland's exit potentially set into motion.

 

[AlaskaSU]

It's hard to measure the damage of conference destabilization. When the Big 10 moved for Maryland, there was talk about them going after UNC and UVA next. That could have destroyed the conference, or at least crippled it like the ACC did to the Big East. That's where the potential harm was the most. And that is certainly hard to quantify, because the gutting of the ACC did not take place. But that's what Maryland's exit potentially set into motion.

Exactly. The purpose of the fee is to prevent dissolution.
Outsiders do not know if there was a procedural violation but the ACC knows. If there is no violation Maryland is on the hook for the full amount.

 

[jgeorge322]

It's hard to measure the damage of conference destabilization. When the Big 10 moved for Maryland, there was talk about them going after UNC and UVA next. That could have destroyed the conference, or at least crippled it like the ACC did to the Big East. That's where the potential harm was the most. And that is certainly hard to quantify, because the gutting of the ACC did not take place. But that's what Maryland's exit potentially set into motion.

i agree with your first statement. the rest i think has proven to not have happened, which is relevent in proving that $52 million is a lot of dough when the conference may have suffered no harm. i'd call that anti-competitive.

 

[RandygoCuse]

If I'm the ACC I call BS and go for the full monte. What can they lose? Nothing.

Agreed - I was a little slow on the uptake at first, but I think the precedent is more important than the money. Having Maryland spend as close to 50 million as possible (even if it's legal fees rather than money to the ACC) sends a message should others want to defect.

 

[jgeorge322]

Agreed - I was a little slow on the uptake at first, but I think the precedent is more important than the money. Having Maryland spend as close to 50 million as possible (even if it's legal fees and money to the ACC) sends a message should others want to defect.

sounds anti-competitive.

 

[CousCuse]

Why doesn't the B1G and Under Armor pony up the dough , they are the ones who acquired the Maryland franchise. Actually , 52 million seems too low for one of the P5 semi-professional sports franchises in such a large market as Maryland. 200 million seems closer to its real market value.

 

[IthacaMatt]

i agree with your first statement. the rest i think has proven to not have happened, which is relevent in proving that $52 million is a lot of dough when the conference may have suffered no harm. i'd call that anti-competitive.

Delaney was very public in his discussions about the Big 10's expansion targets, strategy, etc. To say the conference "suffered no harm" is looking in the rear view mirror in the light most favorable to Maryland.

And once again, one does not have to "prove" that the liquidated damages amount is the amount of actual harm suffered. That part is irrelevant. If you could measure the damages, that's what you would do, and liquidated damages would be unnecessary.

 

[IthacaMatt]

sounds anti-competitive.

Why? There are multiple conferences. It's not illegal for conferences to have rules to govern their members. The members agreed to the rules. It's voluntary association.

 

[jgeorge322]

Why? There are multiple conferences. It's not illegal for conferences to have rules to govern their members. The members agreed to the rules. It's voluntary association.

my point was that i don't think the acc wants to argue that the exit fee is a deterrent to other teams leaving. that sounds penal.

 

[Cheriehoop]

i think what you are describing is a red herring and irrelevant. if i was maryland, i'd get an economic expert to try and calculate what the actual damages are caused by maryland leaving the conference. my guess is there is an argument the conference isn't damaged at all, especially with the newly negotiated tv contracts. then, id argue that $52 million is punitive based off that calculation.

My answer would be - if Maryland thought the exit fee was truly excessive and punitive then what was the benefit and thought process in making their decision to leave the ACC?

 

[NKR1978]

Don't they have to show that the ACC will be out $50 million to award $50 million in damages?

I think one issue is that a trial could end up disclosing some stuff that could be embarrassing or damaging for different parties. I think it will be settle soon and in the $30 to $35 million range.

I don't see how the ACC working with it's business partner to obtain the best possible media deal is embarrassing to the ACC. Just like I don't think the B1G trying and failing to poach Virginia and UNC would be embarrassing to the B1G. Only in the delusional world of the Boneyard conference realignment board and other anti ACC jihadists has the ACC done anything wrong in realignment.

Also, the ACC lost the entire state of Maryland and its stranglehold on DC. This is a huge loss of potential revenue for an ACC network. The ACC can easily show losses due to Maryland leaving. Louisville is better on the field, but doesn't bring the cable boxes.

 

[Townie72]

I don't see how the ACC working with it's business partner to obtain the best possible media deal is embarrassing to the ACC. Just like I don't think the B1G trying and failing to poach Virginia and UNC would be embarrassing to the B1G. Only in the delusional world of the Boneyard conference realignment board and other anti ACC jihadists has the ACC done anything wrong in realignment.

Also, the ACC lost the entire state of Maryland and its stranglehold on DC. This is a huge loss of potential revenue for an ACC network. The ACC can easily show losses due to Maryland leaving. Louisville is better on the field, but doesn't bring the cable boxes.

Ahhh, if Maryland's "stranglehold" was so secure, they wouldn't have been in the financial straits they were in that forced them into the B1G.

You are overdoing that. Beside, there is lots of support in the DC area for both Virginia and VT. Maybe not as much as there is for Maryland, but there is still a lot.