ACC grant of rights deal might weaken ACC’s exit-fee lawsuit against Maryland

Fifteen ACC presidents formally barricaded the conference doors Monday afternoon, announcing the signing of a grant of media rights agreement that effectively rules out any departures until 2027 and locks down the ACC’s current structure.

“This announcement further highlights the continued solidarity and commitment by our member institutions,” ACC Commissioner John Swofford said in a prepared statement. “The Council of Presidents has shown tremendous leadership in insuring the ACC is extremely well positioned with unlimited potential.”

Persuading all 15 presidents — including incoming members Louisville, Syracuse and Pittsburgh — to agree to this represents a massive victory for a conference long speculated as the target for further conference poaching, especially after Maryland announced plans to flee for the Big Ten beginning in 2014. Unification will carry the ACC forward, free of worry. The Big Ten, Pacific-12 and Big 12 also have grant-of-rights agreements, which give the conferences control of each school’s television rights, even if they choose to leave the conference.

Because Maryland will leave the ACC after the 2013-14 school year, it has been barred from internal discussions about the conference’s future. But Maryland and ACC are still embroiled in legal wrangling over the conference’s exit fee, which figures to drag on for some time.

In November, the ACC filed suit against Maryland in Greensboro, N.C., saying the school is bound by the conference’s bylaws to pay an exit fee in order to join the Big Ten. Essentially, the league is asking the court to enforce the rules its members have established.

But in January, Maryland Attorney General Douglas F. Gansler moved to dismiss the ACC’s lawsuit in Prince George’s County Circuit Court, saying “a North Carolina court has no jurisdiction over the sovereign state of Maryland and its public universities,” according to a news release. According to ESPN.com, there will be a hearing on May 23 to evaluate the ACC’s motion to dismiss the lawsuit in Maryland.

But the grant of rights agreement could make it more unlikely that the ACC will succeed in extracting its full exit fee from Maryland, roughly $52 million or three times the annual operating budget.

Speaking with an individual familiar with the West Virginia-Big East legal battle, which contains similarities to the Maryland-ACC case, it seems the ACC’s lawsuit weakens as the conference itself grows stronger and more stable.

“The grant of rights makes any claim of injury by the ACC more far fetched and thus makes the withdrawal fee seem even more unreasonable,” the individual wrote via e-mail. “That being said, I don’t think the effect on the lawsuit’s result would be significant, just on the margins.

“This ‘grant of rights’ deal, as one of many facts that would be considered in the analysis, would just have a marginal or limited effect on the determination of whether the withdrawal fee is reasonable.”

The ACC has argued that, regardless of future financial security, it would still seek the maximum exit-fee payment from Maryland. But with the additions of Louisville and Notre Dame, virtually swapping the two in for Maryland, how much financial hardship can the conference truly claim?

“Securing Louisville immediately after losing Maryland was a much more important fact in terms of the lawsuit than this [grant of rights] deal,” the individual wrote. “This deal simply forecloses any argument that Maryland’s departure led to an instability/uncertainty that damaged the conference.”

Alex Prewitt covers the Washington Capitals. Follow him on Twitter @alex_prewitt or email him at alex.prewitt@washpost.com.
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Alex Prewitt | April 23, 2013