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

[woomba]

Several Big Ten athletic directors have said that they thought that Delany was spooked by the ACC's move on Notre Dame and that he moved to protect Penn State from poaching.

Penn State was seen as an eastern outlier that may be vulnerable to an ACC approach.

Yes and no. You're forgetting that the ND - ACC announcement was many months after Maryland and Rutgers had already announced their intention to join the Big Ten.

The Big Ten originally hoped to be the preferred major sports conference in the Northeast without having a team in that region based on the popularity of Penn State, Ohio State, Michigan and ND in that area. Once the Syracuse + Pitt were added to the ACC and ND rejected Big Ten's proposal, Delany realized that strategy would no longer work and there was a risk of the ACC boxing out the Big Ten in taking that region so he felt that he needed to react.

Penn State wasn't an immediate flight risk but Penn State joined the Big Ten with the intention of being a major player in the Northeast region. If the Big Ten did nothing and the ACC did establish themselves as the premier conference in the Northeast 20-30 years from now Penn State could have been tempted to reconsider.

 

[06029]

"Not MD or RU"..... Respectfully, sorry Southroncross but I know for a fact that the B1G has been working/colluding with RU for over a decade to work them into the B1G under and over the table but needed the right set of circumstances.

This means RU was actively seeking to destroy the BE if they were actively colluding and possibly disclosing proprietary information to the B1G. So was MD colluding too? If RU colluded with the B1G, then MD must have too. Wouldn't that be an interesting twist and dynamic to this story.

Nicky, you better hope RU was not actively colluding or else they are staring at subpoena in this matter too since it would lay bare how stuff really went down. And just wait until the AAC/BE gets hold of that information. If it is a fact, then RU shouldn't spend all of that B1G money. They may need it to pay off some hefty lawsuits.

 

[SouthronCross]

"Not MD or RU"..... Respectfully, sorry Southroncross but I know for a fact that the B1G has been working/colluding with RU for over a decade to work them into the B1G under and over the table but needed the right set of circumstances. I don't think its a big secret to those with their ears towards CR in the NE? SU and Pitt IMO knew this and I surmise ran begging to the ACC quickly to save face. I like you and almost didn't comment but just had too. Md was considered a little later after Tex/ND were found to be no goes as a DC/NYC snatch as option B. If ND or Texas had said yes MD was out with RU as the #1 option/add. Since Md needed appeasement they got frontloads and offered(officially) 1st. We all know Delany love's UNC and desires them but no one thought or expected "in 04" them(UNC) to be on the table.

Nicky, just beacause no one expected them to be on the table back in 2004 does not mean that they weren't. UNC were very much against expanding the ACC beyond 10 teams, and, the powers-that-be in Chapel Hill were VERY disillusioned with how it all played out, and, ended. And, very unhappy with the rest of the ACC.

It is well-known in these parts that Delany had spoken to UNC, at least informally, as early as 2003. Maybe even before. Now, the University would neither confirm nor deny those reports at that time, so, what you say may be 100 percent true. I personally have my doubts, but, I will defer to you on this one, as I cannot disprove what you say.

In closing, I will simply say that is also no secret that UNC and UVA would not be separated, as both consider the other a peer institution, as well as its biggest rival.

 

[SouthronCross]

I don't think that's accurate.

New Jersey and Maryland were logical next steps - hugely populated and near the most major of television markets, excellent recruiting grounds, contiguous and right in Penn State's backyard.

According to UNC scuttlebutt here, it was accurate at the time. But, it was just that.

Take it FWIW. Which isn't much...lol.

 

[husky10]

We are not interested in Mordor. Scott Van Pelt can have it.

I will never understand why this guys has his own radio show, especially during the college football season. He and his partner never say anything but regurgitating things other college football analysists have already said. The SEC is the best college football conference, people in the South care more about College Football, Texas and Florida have the best high school recruits. His show is literally impossible to listen to.

 

[btstimpy]

Yes and no. You're forgetting that the ND - ACC announcement was many months after Maryland and Rutgers had already announced their intention to join the Big Ten.

The Big Ten originally hoped to be the preferred major sports conference in the Northeast without having a team in that region based on the popularity of Penn State, Ohio State, Michigan and ND in that area. Once the Syracuse + Pitt were added to the ACC and ND rejected Big Ten's proposal, Delany realized that strategy would no longer work and there was a risk of the ACC boxing out the Big Ten in taking that region so he felt that he needed to react.

Penn State wasn't an immediate flight risk but Penn State joined the Big Ten with the intention of being a major player in the Northeast region. If the Big Ten did nothing and the ACC did establish themselves as the premier conference in the Northeast 20-30 years from now Penn State could have been tempted to reconsider.

The ND-ACC announcement was September, 2012. It was the same week that the exit fee meeting took place. The Maryland - Big Ten announcement was at the end of November, 2012. Was Maryland talking to the Big Ten before September, 2012? Maryland says that they were not. But their discussions are under non-disclosure.

 

[bobbyinaz]

So to summarize the last 20 pages.

stimpy says they owe $52MM
billy says they owe $20MM
cross isn't sure what the number is

Can we please close this thread & start a new one when something actually happens with this?

 

[woomba]

The ND-ACC announcement was September, 2012. It was the same week that the exit fee meeting took place. The Maryland - Big Ten announcement was at the end of November, 2012. Was Maryland talking to the Big Ten before September, 2012? Maryland says that they were not. But their discussions are under non-disclosure.

Yep - you're right. I was the one confused there. For some reason I thought it was after the season was over.

 

[CAHUSKY]

My favorite part of this thread is people, who clearly have no legal background, making definitive pronouncements about the case only to be made to look silly when an actual attorney chimes in.

 

[NickyNewark]

All this is water under the bridge now outside the legal manueuvering by MD and the ACC so I dont get all this interest? If Md was so bad and was willing to chance a 50+M payout to leave what does that say about the perceived strength of the ACC?

 

[billybud]

Nicky...what it says is more about Maryland.

Maryland was broke and desperate. They had just had to cut athletic programs and their programs were bleeding red ink.

They were desperately looking for a limb to grasp as they sank deeper into the sucking financial quicksand. The Big Ten was that limb.

By accounts, the Big Ten was spurred on to offer that limb by Notre Dame's move with the ACC and their fear that Penn State might be next.

Maryland did what they felt that they had to do. Obviously, they have felt all along that the $50 million may not be enforceable as an exit fee.

 

[itgoeslike]

You appear to be supporting Nicky's position in your response. Essentially Maryland felt that remaining in the ACC was a bad financial decision, even in the face of a potential $50M dollar exit fee. It's hard to imagine that's a good thing for the ACC. Additionally, this is compounded by the zealous actions of the ACC to enforce the fee, which makes me believe the GOR isn't as strong as it is made out to be.

 

[billybud]

Naw...I am not supporting Nicky's somewhat confused position.

I stated what I thought fairly clearly, I had thought.

Has nothing to do with any weakness of the GOR...that is wishful dreaming.

It does have to do with Maryland being so desperate that they had to do something, almost at any risk. And I don't think that they, for minute, believed that they would pay the full ticket exit fee.

In the long run, Maryland may well make more money in the Big Ten. I don't see that as any special weakness for the ACC.

Just as FSU will never bring in as much as Florida..the rest of the Big 12 will never match Texas, UConn will never have the money that Michigan and Ohio State do...the ACC won't bring in as much money as the Big 12.

What is interesting in all of this money discussion is that the media contract money is only 20-33% of the athletic revenue. Most comes from ticket sales, concessions, parking etc,

If Alabama made $50 million per year less then UConn in TV money, they'd still bring in more money. Bama reported $143.4 million in athletic department revenue in 2012-13.

http://bleacherreport.com/articles/...port-1434-million-in-revenue-for-2012-13-year

 

[pj]

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.

Just as a personal note, I've never said that Tobacco Road has too much power. I'm a UConn fan, never concerned myself with ACC politics until recently, and the rivalries between FSU and UNC et al were nothing more than idle entertainment to me. I have always been agnostic on where the power lay, and if there was an imbalance of power, agnostic on whether that was appropriate (should BC be as powerful as FSU? clearly not). But I do think it is quite odd to have disputes among a group of state and private universities that sprawls along the whole eastern seaboard adjudicated in a state court, not federal court.

I happen to do some business in North Carolina and multiple North Carolina businesspeople have told me that there is a good old boy network of North Carolina politicians and leaders with whom they are well connected. If I run into trouble, they tell me, they can contact state legislators and others on my behalf. Fortunately I haven't needed any such interventions, but I am sure they are convinced they can influence government decisions. If medium-sized business executives can do that, what about the combined power of UNC, NC State, Wake, and Duke?

 

[itgoeslike]

If Alabama made $50 million per year less then UConn in TV money, they'd still bring in more money. Bama reported $143.4 million in athletic department revenue in 2012-13.

http://bleacherreport.com/articles/...port-1434-million-in-revenue-for-2012-13-year

If Alabama made $50 million per year less then ***FSU*** in TV money, they'd still bring in more money. Bama reported $143.4 million in athletic department revenue in 2012-13.

http://www.al.com/sports/index.ssf/2013/12/where_do_auburn_and_florida_st.html

But I appreciate you mentioning UCONN, it helps remind me that this isn't an ACC board. . .

 

[billybud]

Huh?

Yep...Alabama will bring in more money...that's my point. I do not really see yours.

But, saying that, Texas has brought in a boat load more money then FSU and has won half the National Championships the last 25 years. My point being that Ohio State, Michigan, and Texas may roll in the dough, but that schools that bring in much less can be as, or more, successful.

 

[woomba]

What is interesting in all of this money discussion is that the media contract money is only 20-33% of the athletic revenue. Most comes from ticket sales, concessions, parking etc.

That's part of the value proposition for the new schools - the bet is that ticket sales will be boosted for Rutgers and Maryland by joining the Big Ten due to the large Big Ten alum base in the area so the revenue projections that they are doing is taking this into account.

I think it makes sense since NYC and DC are #2 and #3 destination cities of Big Ten alumni and it wasn't like those schools were selling out tickets beforehand. At the very worst, I'd imagine it to be a sizable increase over the non-home ACC/AAC turnout for those schools.

 

[itgoeslike]

Huh?

Yep...Alabama will bring in more money...that's my point. I do not really see yours.

But, saying that, Texas has brought in a boat load more money then FSU and has won half the National Championships the last 25 years. My point being that Ohio State, Michigan, and Texas may roll in the dough, but that schools that bring in much less can be as, or more, successful.

The point is that even if you apply your $50M statement to FSU, you get the same outcome—Alabama still makes more money. It's silly to compare Maryland (or UConn) to Alabama, Texas, Ohio State or Michigan with regards to revenue. The bottom line is that Maryland did the math and they determined it would be financially beneficial, in its totality, to depart the ACC, even with a $52M exit fee to contend with. It is what it is.

In defense of UConn, it's been ranked in the top 40 in revenue year after year, even with the old BE's paltry $3.18M in TV revenue. With comparable TV revenue of a P5 conference UConn would likely be ranked in the top 25 in terms of revenue. Of course, based upon Maryland's move, that ranking would be higher if they received an invite from the B1G versus the ACC. . .

 

[SouthronCross]

You appear to be supporting Nicky's position in your response. Essentially Maryland felt that remaining in the ACC was a bad financial decision, even in the face of a potential $50M dollar exit fee. It's hard to imagine that's a good thing for the ACC.

It was a bad financial situation for them because, at least from the outside, it appeared that they spent themselves into a $30M hole without a plan on how to pay for it. Thats nobody else's fault. If our resident UMD fan is around, he can correct me, or, tell me where I was wrong.

The rest of the league seemed to be making out just fine during this time with the same amount of media dollars that they were getting.

Additionally, this is compounded by the zealous actions of the ACC to enforce the fee, which makes me believe the GOR isn't as strong as it is made out to be.

What is the ACC supposed to do? Just let them walk away scott free? No other league has allowed a former member to do that.

And, what does the exit fee dispute have to do with the GOR? They are completely separate agreements.

 

[SouthronCross]

Just as a personal note, I've never said that Tobacco Road has too much power. I'm a UConn fan, never concerned myself with ACC politics until recently, and the rivalries between FSU and UNC et al were nothing more than idle entertainment to me. I have always been agnostic on where the power lay, and if there was an imbalance of power, agnostic on whether that was appropriate (should BC be as powerful as FSU? clearly not). But I do think it is quite odd to have disputes among a group of state and private universities that sprawls along the whole eastern seaboard adjudicated in a state court, not federal court.

I happen to do some business in North Carolina and multiple North Carolina businesspeople have told me that there is a good old boy network of North Carolina politicians and leaders with whom they are well connected. If I run into trouble, they tell me, they can contact state legislators and others on my behalf. Fortunately I haven't needed any such interventions, but I am sure they are convinced they can influence government decisions. If medium-sized business executives can do that, what about the combined power of UNC, NC State, Wake, and Duke?

Completely fair point.

From my own experiences, the good ol' boy network exists everywhere, in some shape, form, or fashion. It may just not be called that.

My post wasn't intended to be aimed at you personally, bro. I was speaking in general terms. Sorry I did not clarify that. My bad.

 

[billybud]

What Maryland has to keep on eye on is that the same water that floats a boat can swallow it.

Maryland will have to build a better football program with their additional monies in order to not be just schedule fodder in the Big Ten, along with Indiana.

Their division mates, Ohio State, Michigan State, Penn State, and Michigan could make it very difficult for the Terps once they go east-west in 2016.

 

[B1GALUM]

What Maryland has to keep on eye on is that the same water that floats a boat can swallow it.

Maryland will have to build a better football program with their additional monies in order to not be just schedule fodder in the Big Ten, along with Indiana.

Their division mates, Ohio State, Michigan State, Penn State, and Michigan could make it very difficult for the Terps once they go east-west in 2016.

The B1G actually goes east-west starting 2014. Maryland will play all the teams you mentioned this fall and will have to visit Wisconsin.
http://grfx.cstv.com/photos/schools...f/2012-13/misc_non_event/future-schedules.pdf

 

[SouthronCross]

The B1G actually goes east-west starting 2014. Maryland will play all the teams you mentioned this fall and will have to visit Wisconsin.
http://grfx.cstv.com/photos/schools...f/2012-13/misc_non_event/future-schedules.pdf

I'd be interested to hear the opinions of B1G fans, the first time Terp fans throw batteries at them on a trip to College Park.

Or, when they complain about B1G officiating the first time they lose a FB or BB game in controversial fashion to the likes of MSU, UM, or OSU. The conspiracy theories will fall like rain.

 

[Pat125]

What is the ACC supposed to do? Just let them walk away scott free? No other league has allowed a former member to do that.

And, what does the exit fee dispute have to do with the GOR? They are completely separate agreements.

Yes, apparently Maryland did make some bad financial decisions, in particular, with their previous AD. The other thing is that Maryland keeps the athletics budget separate. I don't think that finances was the sole issue here. Things have changed, and the ACC is no longer the conference it used to be (it's better or worse depending on one's point of view). Granted, Maryland voted to invite all the teams that were added (including ND), except for Florida State. If, finances aside, Maryland thought that the ACC was still a better fit, they should have stayed. They could have restructured the budget to make it work, especially since there are benefits to having athletics that don't appear on the balance sheet.

Before all this lawsuit stuff happened, I believe that Maryland was bound by the $20 million or so that they agreed to in the past. But if the courts decide that Maryland should get out scot free, then I'm fine with it in light of all that has happened. But I also understand the courts could find the $50 million plus fee was enacted in the correct manner and legal, which Maryland is prepared to do.

The exit fee and Grant of Rights are different, but they may end up being related depending on the conclusion of the lawsuit. If $50 million is found to be punitive, it seems this would be the case for a school who leaves a conference with a GoR. I don't know howo GoRs work, as I've seen experts on this disagree. But if a team who leaves while GoR is still fresh, this may involve forfeiture of revenue in the hundreds of millions. I would imagine courts would also find this punitive.

 

[billybud]

pat125...the thing is that the law, in regards to liquidated damages, does deal with the fact that the damage estimate must not be just a punitive measure.

A Grant of Rights is not a damage...it is the granting of media rights..and has a completely different context and case law.

There just is not much cross over between a GOR and an Exit Fee although they may end up serving the same purpose.