Bloomberg News

ACC Sues University of Maryland for Quitting Conference

November 27, 2012

The Atlantic Coast Conference sued the University of Maryland for $52.3 million in penalties after the school said its teams would leave to compete in the Big Ten, joining a recent rearrangement of collegiate sports leagues.

A member that withdraws from the conference is subject to a payment three times the organization’s operating budget, the ACC said in a filing yesterday in superior court in North Carolina. The annual operating budget for the 2012-2013 year is $17.4 million, according to the complaint.

“There is the expectation that Maryland will fulfill its exit-fee obligation,” John Swofford, the ACC commissioner, said in a statement.

Dozens of National Collegiate Athletic Association schools have announced conference moves in recent years as athletic departments jockey for financial paydays from television contracts as well as stable affiliations.

The 12 ACC teams voted in September to boost exit fees, with Maryland and Florida State University voting against the increase. Maryland, which is a 59-year charter member of the Greensboro, North Carolina-based ACC, said on Nov. 19 that it would move to the Big Ten on July 1, 2014.

University of Maryland President Wallace Loh said at the news conference announcing the move that the school would discuss the exit payment privately with the ACC.

Crunching Numbers

“As we crunch those numbers, we are able to deal with this issue,” Loh said. In an e-mail, Brian Ullman, a spokesman for Maryland, declined to comment on the ACC’s lawsuit.

Maryland, whose teams are known as the Terrapins, is the first school to exit the ACC since the University of South Carolina left in 1971. Rutgers University, currently in the Big East, is joining Maryland in the Big Ten, the New Brunswick, New Jersey-based school announced last week.

Syracuse University and the University of Pittsburgh are joining the ACC from the Big East next year. Notre Dame University, a Big East member for all sports except football, also announced plans to join the ACC. New Orleans-based Tulane University, along with East Carolina University’s football program, said today that they would join the Big East for the 2014-15 school year, leaving Conference USA.

The ACC said in its complaint against Maryland that the withdrawal payment provision “provides some measure of financial protection against potential damages and losses for members of the ACC that remain after withdrawal by one or more of the members.”

ACC Constitution

Loh “has made it clear that defendant Maryland does not intend to pay the amount provided by the ACC’s constitution,” according to the complaint.

Financial difficulties led Maryland’s athletic department to eliminate seven of its 27 varsity sports this year. Joining the Big Ten and its TV network, which reaches 73 million cable and satellite subscribers, will allow the Terrapins to consider reinstituting some of those sports, the school said.

Maryland, which would earn about $17 million from the ACC after Syracuse and Pittsburgh join, can expect a guaranteed payment of about $24.6 million as part of its new conference affiliation, according to the Washington Post.

The Big Ten, which will renew its television contract in 2017, may become even more valuable with the addition of Maryland and Rutgers, schools that provide an East Coast footprint for the largely Midwestern conference.

Other ACC members include Boston College, the University of Virginia and the University of North Carolina.

The case is Atlantic Coast Conference v. University of Maryland, 12-10736, State of North Carolina, Guilford County, General Court of Justice, Superior Court Division.

To contact the reporters on this story: Don Jeffrey in New York at djeffrey1@bloomberg.net; Mason Levinson in New York at mlevinson@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Michael Sillup at msillup@bloomberg.net


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