Maryland’s request to dismiss $52 million ACC exit fee denied
A North Carolina appeals court rejected Maryland's request to dismiss the ACC's lawsuit against the school on Tuesday, a lawsuit that is requesting the school pay a $52.3 million exit fee.
Maryland is leaving for the Big 10 along with Rutgers, and the conference wants the record fee, which is three times the size of the conference's operating budget. That fee was calculated by the appeals court.
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.
The $52 million fee is the highest penalty ever assessed on a school for leaving an athletic conference and would be nearly equal to the school's yearly athletic budget, Maryland's attorney general's office said in May. The school's athletic department last year cut seven sports teams as it struggled with multimillion-dollar annual losses.
Maryland voted against the increase of the fee, which was originally calculated at $17.4 million. However, the court ruled that the school was bound by the conference's decision to increase the fee. The university also arguing that the school is an arm of the state, which has sovereign immunity to lawsuits.
Maryland's countersuit to the ACC in Maryland state courts has been on hold until a final judgment in North Carolina is reached.
A Sports Illustrated report in November 2012 said that the school is projected to have $12 million more from the Big 10 in 2014 than it would had from staying in the ACC. In 2017, the school's projected revenue would be $21 million more in the Big 10.
If those figures end up being accurate and the fee is upheld when the legal wrangling is over, Maryland would be able to pay off the lawsuit over the next few years simply with the differences in projected revenue.
And if the fee is upheld, would the decision impact any future conference realignments? While projected revenues five to 10 years down the road have been a monstrous part of the shifting college landscape, could a short-term delay in revenue increases via a potential huge exit fee payout force any other school thinking about leaving its conference to not bolt?
- - - - - - -
is the assistant editor of Dr. Saturday on Yahoo Sports. Have a tip? Email him at nickbromberg@yahoo.com or follow him on Twitter!
Follow @NickBromberg
