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All-In [30593]
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Why would the ACC sue UMD
Nov 27, 2012, 2:48 PM
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if they were planning to pay the $50 mil?
Exit fee means nothing
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1st Rounder [629]
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Typical ACC.***
Nov 27, 2012, 2:55 PM
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All-In [25476]
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Re: Why would the ACC sue UMD
Nov 27, 2012, 2:59 PM
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They will not pay the 50 million. Not now, not later. It is a punitive fee, designed to punish any team that wants to move. I don't think the ACC can show that it is not. Md. can show that the ACC is denying them the freedom to do what is best for their University and can show that they(Md.) will be better off financially by leaving the ACC. In fact, the case could be made that the ACC is keeping a member from earning the money it is capable of earning by not being tied to an incompetent run organization. In fact, Md should counter sue for damages on the income it has been denied by being a part of the ACC.
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CU Guru [1071]
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Those aren't legal arguments ... Maryland will pay whatever
Nov 27, 2012, 3:34 PM
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the parties agree to when the suit is settled (which may be sooner rather than later). It will be an amount greater than $20M but less than $50M. A safe bet would be that it settles for between $25M and $45M. One factor will be whether MD is looking to depart immediately and not wait until 2014. Another factor of course is whether the Big 10 is willing to chip in to help MD get it done. If the answer to both of those questions is yes, look for MD and the Big 10 to pony up somewhere in the vicinity of $40M. If MD and the Big 10 are willing to wait until 2014 (and if the Big 10 isn't paying a significant part of the freight), it will likely settle for around $30M.
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Orange Blooded [4504]
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Check back when this is resolved. It's called a "contract"'
Nov 27, 2012, 7:52 PM
[ in reply to Re: Why would the ACC sue UMD ] |
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not a "punitive fee". Let us know if any money changes hand.
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Starter [356]
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Re: Check back when this is resolved. It's called a "contract"'
Nov 27, 2012, 7:58 PM
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its a liquidated damages clause and can be invalidated if found to be excessive or penalizing to the party subject to the fee (penal damages).
Punitive is a lot closer to being correct than most of the other assumptions about contract law going on in here. Usually, the plaintiff would get the punitive damages, but the basic assumption that the defense by maryland is that they are excessive and penalizing towards them is close enough for this discussion in my book.
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Walk-On [102]
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Re: Why would the ACC sue UMD
Nov 27, 2012, 3:00 PM
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They voted to sue because Maryland had indicated that they were going to challenge the fee as punitive.
Just getting the jump, it was going to end up in court one way or the other.
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110%er [8008]
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^^^this^^^***
Nov 27, 2012, 3:24 PM
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Orange Blooded [4056]
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Why would MARY ever pay $50M????
Nov 27, 2012, 3:19 PM
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I'd let my lawyers get that sucker lowered substantially. Why pay more $$$ when you don't have to.
MARY's got a great case due to precedence in other conferences AND b/c they didn't vote for it. MARY knew it would limit them/have no benefit in a very uncertain realignment climate. Never understood why CLEM voted for that....its just a cheap PR stunt. Try to save the ACC etc, etc.....but NEVER limit your options.
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Starter [356]
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Re: Why would MARY ever pay $50M????
Nov 27, 2012, 3:44 PM
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A) Precedents from other conferences aren't necessarily court cases, and are not in the same jurisdictions. At best, they would be "persuasive", but not precedents, nor would they be binding.
One of the reasons the ACC filed in NC rather than MD or, well, they could probably get federal jurisdiction on MD in any state the ACC has a school.
B) I don't know the exact rule in NC, but as above, the ACC chose NC for a reason. There is a thing in most contracts, and I am certain this has one, called a merger clause. That says anything that went on before this was signed means nothing and this contract contains all the terms.
What you are suggesting is called "Parole Evidence", and is generally speaking not allowed (unless you are in California).
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Orange Blooded [4056]
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Beyond the legal terms/procedures, etc.....
Nov 27, 2012, 3:48 PM
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I still don't see MARY ever paying the $50M in full. Hasn't happened yet with any team leaving another conference....don't see it here. Plus, don't see this case ever making it to trail.
Message was edited by: JREwing®
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Starter [356]
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Re: Beyond the legal terms/procedures, etc.....
Nov 27, 2012, 7:34 PM
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I agree, but I think it has little to do with the reasons you suggested. It has more to do with a business decision, and the fact that lawsuits at the level of State University vs Big Conference get real expensive, and do so real quick.
This is just the ACC saying, hey, you signed this, don't think we're just going to let you off on the cheap. I honestly believe that the amount we end up seeing Maryland pay will be much higher than any of the previous other payments.
I don't know that I see this as punitive, the clause is a clear liquidated damages, and it can be argued, quite well I believe, that the money the ACC stands to lose by losing the Maryland (Baltimore), probably Delaware, and possibly DC television markets because UMD leaves is not such an amount that a penalty of $50million would seem absurd (which is basically the general rule in contracts). The markets probably aren't worth that much, but they are definitely viable. Not to mention the loss of the ability to market the success of the UMD program (it might be harder than you think to find an equal replacement, yay mitigated damages).
The money adds up fast.
Also, the ACC is not preventing UMD from conducting business, they are more than willing to let UMD stay, the ACC is simply asking that UMD abide by the rules that have been adopted by the league which UMD is a part of.
Unless UMD can show some unconscionable act or undue influence in signing the agreement, I don't know that UMD has much of a leg to stand on, other than having the amount due lowered. But hey, if it costs them $10million in costs and they pay $30million to go, then the whole press about the matter, might be worth it just to say here's $40million, let's call it a day. (Numbers probably a little high, I would imagine the ACC takes $30, definitely $35).
Neither side is "right" or "wrong", that's what the courts are for, but this probably won't be answered. Someone should write a law review article on this.
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Orange Blooded [4504]
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Legend [15749]
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Maryland has already stated publicly that they would
Nov 27, 2012, 3:39 PM
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challenge the Exit Fee and yes, they have a legal argument for doing so.
I wouldn't anticipate them paying $50 million. We'll see where it lands.
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CU Guru [1071]
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Um, surely you know why York ... Are your questions a
Nov 27, 2012, 3:41 PM
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Socratic teaching method?
I'll give the answer: The reason the Council of ACC Presidents voted unanimously to file suit against Maryland now was to get the matter resolved at a mediation as soon as possible. At that point, every ACC school (but particularly UVa, Va Tech, Ga Tech, Clemson and FSU) knows with precision the true cost of leaving (which is very likely somewhere between $30M and $40M) as soon as possible.
Next question, Professor York...
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Starter [390]
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Re: Um, surely you know why York ... Are your questions a
Nov 27, 2012, 3:54 PM
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Very doubtful that the fee, if any, will be above $15 million.
Why, you ask?
$50 million represents three times the ACC's entire annual operating budget.
That would be the definition of a punitive amount, which Maryland and FSU voted against, and which may not be legally binding for a public institution without a vote from their state's legislature.
Excerpts from articles discussing the ACC exit fee:
The (ACC) presidents voted 10-2 to increase the exit fee to three times the operating budget, which would currently translate to about $50 million.
Missouri and Texas A&M technically should have paid more than $20 million each to leave the Big 12 for the SEC, but neither paid more than $13 million.
The Big East has a 27-month exit process that reportedly costs $10 million, but Pittsburgh and Syracuse each paid $7.5 million and shortened the wait by a year. Odds are that Maryland will be able to negotiate a lower fee. In a worst case scenario the school could also take the conference to court, arguing that the $50 million fee is punitive.
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Varsity [224]
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Re: Um, surely you know why York ... Are your questions a
Nov 27, 2012, 4:04 PM
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Also, by filing first, in North Carolina, it makes the case be heard here, rather than waiting for them to file in Maryland, contesting the exit fee. Of course, Justice being blind, the Maryland courts wouldn't have felt prejudicial any more so than those in NC
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Starter [356]
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Re: Um, surely you know why York ... Are your questions a
Nov 27, 2012, 7:41 PM
[ in reply to Re: Um, surely you know why York ... Are your questions a ] |
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I disagree on the punitive parts.
I think this is a liquidated damages question, and unless the amount is totally absurd, it will be honored. The value of the TV markets that UMD brings could mean quite a lot, plus the value of them being a productive member of the ACC in basketball and football (hey, they make the tourney quite often, even won it in the alst decade, and they have had some decent football teams), those $$ add up quick.
The fact that UMD and FSU or whoever voted against it does not matter. That is Parole Evidence, and unless you are in CA (which this isn't), then that information would not be allowed in a court of law if there is a merger clause integrating the agreement.
I can guarantee you that the lawyers for the ACC who drew up the agreement put one of those in the contract.
The fact that the market is becoming hyper-competitive and its incredibly hard to replace a program that has the history and success (lol) of UMD just makes the $50million look that much more reasonable.
The Big East and Big 12 exits you mentioned were between 60% and 75% of the contracted fee. I think that will hold here, the ACC will probably take $30million but want $35million.
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Rock Defender [53]
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Re: Um, surely you know a $50M exit fee is ridiculous.
Nov 27, 2012, 8:02 PM
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The most lucrative conference has a zero exit fee.
I can see this heading to the Federal Courts.
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Starter [356]
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Re: Um, surely you know a $50M exit fee is ridiculous.
Nov 27, 2012, 8:13 PM
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That has no bearing on the matter here.
This is a contract between two consenting parties.
And you see this moving to federal court? You mean, you think UMD wil try to remove this action between diverse parties for more than $75,000 to a constitutionally mandated court that was designed to for this exact type of lawsuit to ensure fairness for all parties involved. Hmm, I wonder if UMD has any room on their legal team for you.
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Rock Defender [53]
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Re: A show of force??
Nov 27, 2012, 7:56 PM
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LMAO!!
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Freshman [2]
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Re: Why would the ACC sue UMD
Nov 28, 2012, 2:31 AM
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What I find funny is that everyone says the ACC's exit fee is punitive, outrageous, etc.
How is that worse than what the Big 12 has done with their Grant of Rights? You want to talk punitive. If a Big 12 team left they would have to surrender TV revenue for 20 years. That's easily 100+ million.
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50
