ACC sues Maryland, seeking payment of its exit fee
By Barry Svrluga and Alex Prewitt,
The Atlantic Coast Conference has filed suit against the University of Maryland, asking that the school be forced to pay an exit fee of more than $52 million — a penalty Maryland officials have questioned since announcing last week the school’s plans to join the Big Ten.
In the suit, filed Monday in Greensboro, N.C., the ACC is pursuing a declaratory judgment, essentially asking the court to impose the rules its members have established. In September, the ACC’s Council of Presidents — the leaders of the league’s 12 schools — voted (with Maryland and Florida State dissenting) to raise its exit fee to three times the league’s operating budget, which this year is $17,422,114, according to the complaint.
“There is the expectation that Maryland will fulfill its exit fee obligation,” ACC Commissioner John Swofford said in a statement.
Swofford said the ACC’s Council of Presidents, minus Maryland’s Wallace D. Loh, voted unanimously last Friday to “file legal action to ensure the enforcement of this obligation.”
In the suit, the ACC alleges that Loh has questioned the validity of such an expensive penalty. The suit alleges that, in September 2011, Loh proposed increasing the exit fee to an amount equal to one-and-a-quarter times the conference’s operating budget. That increase was implemented following a unanimous vote of the council. A year later, the council decided to increase the penalty further. Loh this time dissented, citing “legal and philosophical” reasons. The penalty now totals now totals $52,266,342.
“Dr. Loh has distanced Maryland publicly from any commitment to pay the withdrawal payment as set forth” in the ACC constitution and bylaws, the suit reads. The suit says Loh has “refused to provide assurance” that it will pay the fee.
“Additionally, through public and private statements, defendant Maryland has indicated that it does not intend to pay the amount provided by the ACC’s constitution,” the suit says.
A Maryland spokesman said Tuesday that the school had no comment on the suit. On Nov. 19, at a news conference announcing Maryland’s departure for the Big Ten, which is planned for the 2014-15 academic year, Loh said the penalty is “a very large sum” and “that is something we will discuss in private with the ACC.”
Monday’s action, which ACC officials view as a show of solidarity among the conference’s remaining members, means private discussions are unlikely. In an interview with The Post on Monday, Loh said he had considered the ramifications of paying the entire amount.
“It is the responsibility of the University of Maryland; it is not the responsibility of the Big Ten,” Loh said. “And we will deal with it. . . . In doing my calculations, you know, the financial aspect — obviously I have taken that into account.”
Big Ten Commissioner Jim Delany said Tuesday that his conference is not prepared to help Maryland financially extract itself from the ACC.
“That’s their deal,” Delany said during an interview at the Big Ten offices in Park Ridge, Ill.
“I think the ACC’s position has always been a good one: that the member and the conference are the ones who have [to deal with] that.”
According to the ACC’s bylaws, Maryland would owe the entire amount within 30 days of its official departure, now set for June 30, 2014.
The ACC’s exit fee dwarfs the penalties issued by other conferences for departing schools. West Virginia is paying a $20 million penalty to the Big East after leaving for the Big 12, though the Big 12 reportedly is paying a portion of that sum. Syracuse and Pittsburgh owe the Big East $7.5 million each for leaving for the ACC.
Jenna Johnson contributed to this report from Washington. Prewitt reported from Park Ridge, Ill.
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