Maryland to Big Ten: ‘It’s money versus tradition’

December 11, 2012

On the third Saturday in November, more than 100 of the University of Maryland’s most generous donors and ardent supporters were invited to the president’s newly constructed, multimillion-dollar home. The breakfast tailgate party preceded that afternoon’s game against nationally ranked Florida State. But as the guests nibbled on finger foods and wandered through the new home, the school’s top leaders — mainstays at such an event — were nowhere in sight.

Six of those officials — President Wallace D. Loh, his spokesman and his chief of staff; Athletic Director Kevin Anderson and one of his deputies; and the vice president for university relations — gathered around the kitchen table in Loh’s private residence. They were negotiating a deal they knew would, at first blush, anger and upset many devoted Terrapins fans, including many who were just down the hall.

Through a speakerphone at the center of the table came the voice of Jim Delany, the longtime commissioner of the Big Ten Conference. During on-again, off-again negotiations over the previous seven weeks, Delany had wooed Maryland with promises of millions more dollars than the school was earning by belonging to the Atlantic Coast Conference.

By this point, the move seemed to Loh like a “no-brainer.” The athletic department has struggled to attract fans, resulting in deficit problems so severe that, earlier in the year, Loh cut seven varsity sports, a decision he then called one of the most painful of his career. The new revenue could potentially turn around the department’s finances, and therefore its future.

And as jarring as a move from the ACC might be for Maryland, changing conferences had become the norm in college athletics. For the past decade, the regional rivalries that traditionally defined the parameters of and passion for college athletics have been shifting.

The Post Sports Live crew offers ACC and Big Ten perspectives on the University of Maryland’s decision to accept the offer to join the Big Ten conference starting in 2014. (The Washington Post)

In order for Maryland to be part of the shift, Loh knew he would have to convince the school’s influential donors and devoted fans. After all, Maryland helped found the ACC in the 1950s. Along with deep-rooted tradition, it could cost U-Md. as much as $52 million to the leave the league. Loh was already dodging phone calls from the ACC commissioner.

“It’s money versus tradition,” Loh said in an interview. “Everybody knows there would be an outcry and we would have to deal with that. And, do we want to go through that outcry?”

Sitting in the kitchen that Saturday morning, less than two hours before kickoff, Loh decided it was worth the risk. He told Delany they had a deal.

A shifting landscape

In 2003, the ACC convinced three members of the Big East to leave and join its ranks, a move that shook up the landscape of college athletics. Alliances founded on geographic proximity and bolstered by competitive history were cast as relics secondary to television market share. Following the ACC’s bold stroke, other moves were not just probable, but inevitable.

“For years and years and years, this area was somewhat dormant,” Delany said in an interview at his Park Ridge, Ill., office, home to conference headquarters. “The tectonic plates underneath intercollegiate athletics are very warm, as evidenced by all the changes that have happened in the major conferences over the past decade.”

In 2010, the Big Ten lured Nebraska from the neighboring Big 12. But Delany had his eye on the eastern seaboard for years, two Big Ten athletic directors said. He said he regretted not setting up an East Coast office when Penn State came on board in 1990, a lost opportunity to expand the conference’s brand and influence to major commercial and media markets. So for the past five years, whenever the conference’s athletic directors discussed potential expansion — which was often — Maryland was always among the potential targets.

“I remember Maryland coming up as a topic of conversation going back to when I started,” said Michigan Athletic Director Dave Brandon, the former CEO of Domino’s Pizza, who took his job at the start of 2010.

Students are shocked after university President Dr. Wallace D. Loh announced Monday that the Terrapins will join the Big Ten in 2014. After nearly 60 years, Maryland will leave the Atlantic Coast Conference , a conference it helped establish. (Gabe Silverman/The Washington Post)

That summer, Loh, who had been the provost at the University of Iowa, a Big Ten school, was named the president at Maryland. Shortly after accepting his post, Loh attended a meeting of officials from schools belonging to the Association of American Universities, a consortium of research universities that included, at that time, all the Big Ten schools. Loh had not yet delved into the finances of his own athletic department, and wasn’t terribly familiar with the landscape of college sports. But the topic of conference expansion — a popular point of discussion among university leaders, given the constant shift over the previous decade — came up.

“If you guys are ever interested in expanding,” Loh remembers telling them, “I would be interested in hearing what you have to say.”

The conversation lasted less than a minute, and Loh said, “I didn’t give it much thought.” But at the time, his athletic department was ailing, even if Loh didn’t yet know it. One of his first moves was to install Anderson, who came from the U.S. Military Academy at West Point, as athletic director. Together, they faced a dire budget situation. Eventually, the school’s internal projections predicted the athletic department would lose $4.7 million in fiscal 2012, a deficit that was projected to triple by 2017. So together, Loh and Anderson cut those seven sports from Maryland’s program for one reason: to save money.

That set of circumstances fertilized interest not only in College Park, but at schools throughout the Big Ten. When the Big Ten talked of expanding east, Iowa President Sally Mason, Loh’s former boss, recalled Loh’s initial inquiry.

“That conversation came to my mind, certainly,” Mason said, “and to the minds of other Big Ten Conference presidents.”

The power of television

Still, there was no indication Maryland would be willing — or able — to move, and no formal discussions about the possibility. According to a lawsuit against Maryland filed last month by the ACC, Loh introduced a proposal in September 2011 to increase the penalty for departing the conference to one-and-a-quarter times the total operating budget of the league. Maryland officials dispute that claim.

Either way, at the Big Ten offices, there was a sense Maryland could be had, and there was one reason why that mattered: television. The Terrapins themselves don’t command an unusually large following, but access to the Washington and Baltimore markets matters. In 2007, Delany’s brainchild, the Big Ten Network — a cable channel dedicated to the athletic events of the conference’s schools — launched. The reason Maryland might be appealing: a local school would give the Big Ten a better case to get its network on “basic” cable packages in and around Baltimore and Washington. Therefore, the conference could charge cable companies more for each home that receives the network in a market in which it has a member school than it can for homes that are out-of-market.

“That, alone, is a big enough reason to expand,” said a television executive with knowledge of both the Big Ten and ACC television packages.

Last summer, the ACC moved to take two more schools — Syracuse and Pittsburgh — from the Big East. On Sept. 12, it voted to add Notre Dame — long presumed to be in the sights of the Big Ten — in all sports but football. Some Big Ten athletic directors believed Delany grew wary that the ACC would move to grab Rutgers and Connecticut, two Big East schools who provided some semblance of an entry into the New York media market, an unclaimed territory for college sports.

“Conferences were outside of their historical footprint,” Delany said. “The question was: Do we want to go outside ours? The answer was yes.”

On the same day the ACC admitted Notre Dame, though, it made another key move: The conference’s presidents and chancellors voted to expand on Loh’s original idea to increase the penalty for schools who might leave. This time, the ACC changed its bylaws, and a school which left would have to pay three times the operating budget of the conference — which, in 2012, was more than $17 million, making the total penalty more than $52 million.

Loh voted against the increase, though at the time he expressed solidarity with the ACC. But it set a tone. Born in China and raised in Peru with degrees from Cornell, Michigan and Yale, Loh was an outsider to the ACC. A psychologist and lawyer by training, he wasn’t particularly obsessed with college athletics. That made him a wild card.

“There was always an uneasiness about Wallace because of him not voting for the exit fee,” said an ACC official present at the meetings. “You always had that in the back of your mind.”

Big Ten reaches out

During the first week of October, Loh received a call from Delany. The two characterize the contact differently: Loh called it “out of the blue”; Delany considered it merely an extension of conversations Loh had started with Mason and others around the Big Ten.

Either way, Delany suggested a conversation, without commitments, between the conference and the school. Even with those loose parameters, Loh said he was reluctant. In the ensuing days, he called William E. “Brit” Kirwan, who once held Loh’s office and now serves as the chancellor of Maryland’s university system. Kirwan said the Big Ten presidents would have approved such an overture from Delany. Maryland owed the Big Ten the courtesy of a meeting.

“It’s the collegial thing to do,” Kirwan said. “We work with these people all the time.”

Collegial maybe, but in College Park, even the thought of such a meeting was unconventional. When Loh told his athletic director, Anderson responded, “Wallace, you are not serious? You realize this is such a hot issue with our fans. You don’t want to go that direction.”

But acting on Kirwan’s advice, Loh accepted the meeting. On Oct. 12, he, Anderson and two of Anderson’s deputies — Kelly Mehrtens and Nathan Pine — flew to Chicago, where they met Delany and other Big Ten officials at the Hilton at O’Hare Airport.

Before the meeting could take place, the Big Ten asked Maryland officials to sign a non-disclosure agreement. Delany did not want public discourse. A year earlier, when the Big Ten had inquired about several Big 12 schools, conference officials initially wanted transparency in the process. Instead, the public discussion led to mayhem.

“We had media reports confirmed of seven different institutions joining the Big Ten, from Texas to Nebraska to Missouri to schools in the ACC, the Big East,” Delany said. “It was a zoo. It was a circus. It was embarrassing.”

Loh asked Maryland’s lawyers to look at the agreement before he signed. But the tone for the discussions were set: They would include only Maryland’s top administrators. Only some of the department’s most prominent and generous boosters, such as Under Armour founder Kevin Plank, and a few of the state’s most influential politicians, such as senate president Thomas V. “Mike” Miller, would be in the loop.

“They know a president doesn’t decide on his own,” Loh said. “But it makes it very clear that it’s a very restricted circle.”

Discretion assured, Delany laid out his case. “We showed them who we were,” Delany said, and that included revenue from the Big Ten Network, the conference’s contract with ESPN as well as payouts from football bowl games. Delany described the conference’s vision that the future of college athletics involved technology — getting passionate fans not only to buy tickets, but more importantly to subscribe to products that allowed them to watch games online, on mobile devices, anywhere in the world. Loh had spent the summer researching some of the same themes on the academic side, looking at online education.

Delany saw the meeting, which lasted a few hours, as an “introductory interview.” Loh saw something else.

“I mean, I was totally stunned,” Loh said. “Remember, all that I know about the Big Ten and the ACC at this time is that there are games. . . . It really opened my eyes because I’ve never been involved with the details of a conference.”

The Maryland contingent left that day knowing change was possible. There was, internally at least, momentum.

Trying to close the sale

Still, if Loh was to drive Maryland into a new conference, he had a sell job at every turn. The following week, he met with his cabinet — and told the members he had spoken with the Big Ten.

“Their first reaction was, ‘You must be kidding,’ ” Loh said. But Loh passed on the financial information the Big Ten had given him. Provost Mary Ann Rankin, Loh’s second-in-command on the academic side, provided key support. Rankin grew up in the Midwest and was weaned on Big Ten football. During her time at the University of Texas, Rankin had heard of the Committee on Institutional Cooperation, an academic and research partnership among Big Ten schools and the University of Chicago.

The more digging Rankin did, the more impressed she became. It was clear that while the CIC didn’t need to be a driving force for a potential move, it could be an attractive academic element for faculty.

Loh let the idea sink in. At a subsequent meeting, he asked his cabinet members to think about leaving the ACC analytically, not emotionally. He told them that if current trends in the athletic department held — sluggish ticket sales and fundraising — “we will be cutting teams in two to three years.”

“That started to make people think differently,” he said.

As Loh tried to win over his inner circle, Maryland also had to let more of its key decision-makers and supporters know about the discussions. Kirwan called James L. Shea, and Barry P. Gossett, the chair and vice chair of the board of regents. In late October, Shea met with Loh and Anderson.

“My initial reaction was skeptical,” Shea said. “It was a new proposition. The ACC’s a great place. At first blush, it seemed like: ‘Hmmmm. I don’t know if we should do that.’ ”

Miller, the state senate president for 25 years who is also an alum and longtime athletic booster, met with Loh.

“I was initially shocked,” he said.

But Loh was building his case, hiring lawyers and consultants — including, he said, a former television executive and a former conference commissioner — to advise whether such a move might be prudent. That research helped assuage some of the school’s supporters.

Meantime, from the Big Ten: Nothing. “We were thinking,” Delany said. “. . . We were cautious.” But they were also working to get Rutgers University on board as a new member to join with Maryland. The Big Ten was so stealthy in its negotiations that it told officials from both schools that another school was in play, but they didn’t say who.

“I had no idea,” Rutgers Athletic Director Tim Pernetti said. “Am I going to lie to you and say we weren’t speculating? Of course we were. But we’re Jersey people here. We’re good at keeping things under wraps. And discretion was a key component of this.”

Discretion is one thing, silence another. Loh was left wondering: “If they really want us, how come I don’t get a phone call?”

In the last full week of October, Delany called. He wanted another meeting. This time, Loh said, the Big Ten had to come to Maryland.

Marathon negotiations

On Nov. 4, a Sunday, six Maryland officials — Loh, Anderson and Mehrtens; Brian Ullmann, the school’s assistant vice president for marketing and communications; Michele Eastman, Loh’s chief of staff; and Terry Roach, the university’s general counsel — met a four-member Big Ten contingent led by Delany and including representatives from the conference’s legal, financial and communications teams in a conference room at the Willard InterContinental Hotel in downtown Washington, a block from the White House. The Maryland team wore suits. The Big Ten group was dressed more casually. But the business was serious.

Both sides came armed with spreadsheets. Loh and Delany served as the point men. Over the course of a marathon session — Delany remembers it as 41 / 2 hours, Loh as nearly seven — the mutual interest morphed into negotiations about how Maryland could become part of the Big Ten.

As afternoon turned into evening, hotel staff replaced a depleted sandwich tray and cheese plate with a hot dinner. The group worked through what the Big Ten’s divisions might look like, because that would have an impact on the travel for Maryland’s teams. Loh and Anderson needed to hear about plans for lacrosse in the Big Ten, where the sport isn’t a mainstay as it is in College Park. Loh asked his questions about the future of the conference, its expansion plans and mission and the academic perks.

“So what is there left to talk about?” Loh said. “The only thing left to talk about is finances.”

Maryland’s financial concerns were both immediate and long-range, but Loh felt like he had some negotiating room because — even with its problems — his school would be fine staying in the ACC.

In the Big Ten, as in most conferences, each school receives an equal share of the league’s annual revenue. But Nebraska, which entered the Big Ten for competition in 2011, won’t receive the full share of revenue for several years, according to reports. Loh didn’t know it, but the Big Ten also was negotiating a deal to bring in Rutgers that would phase the Scarlet Knights into the conference over time.

“We expect to deliver incremental value,” said Pernetti, the Rutgers AD. “So you should expect to grow incrementally.”

The Big Ten’s desire was to have new members earn a gradually larger piece of the revenue over a six-year period. But Maryland felt its stability in the ACC offered more bargaining leverage than Rutgers had in the crumbling Big East.

“There is no reason for us to leave,” Loh said. “So if we are going to consider, seriously, leaving, it has got to be worth our while.”

Perhaps, if the Big Ten really wanted Maryland, the two sides could figure out a way the Terrapins could receive a larger share of the Big Ten’s pie earlier. The potential solution was to get creative, according to two people with direct knowledge of the deal. By front-loading the deal — moving some money from years well into the future to the Terrapins’ first six years in the conference — Maryland was able to secure the cash it will need to address some of its immediate financial problems.

Neither Maryland nor the Big Ten would provide specifics of the deal. Sports Illustrated reported the Big Ten projects Maryland would make $32 million in 2014-15, a huge increase from the $20 million the ACC is projected to pay out that year.

The Big Ten’s pitch also includes a huge bump in revenue when the conference renegotiates its television deal in 2017, projecting a $43 million payout for Maryland that year, an enormous gap over the $24 million the ACC projects. A person with knowledge of the deal confirmed those were the figures Delany pitched to Loh.

So the two sides left the Willard with significant progress, but without a deal, and without a timetable. And Loh still had one problem: Pacifying a sure-to-be-upset fan base if, in fact, he took the Terrapins to the Big Ten.

A more frantic pace

On the week of Nov. 11, Ullmann told Loh that “some blog” was reporting that Maryland might move conferences. Indeed, word of a potential move — albeit in rumor form — had surfaced on the message boards at InsideMDSports.com, a popular fan Web site. Chatter on sports talk radio wasn’t far behind. All the particulars — Loh, Anderson, Delany and others — knew such talk could upset both fans of the Terrapins, who had such a long association with the ACC, and fans in the Big Ten.

On Tuesday of that week, the Big Ten’s athletic directors met in Chicago. Though the primary focus was to meet with representatives from bowl games, Delany briefed the group on the progress with Maryland. Brandon, from Michigan, and another athletic director left those talks not believing a move was imminent.

The discussion on the Internet took off. Reporters began asking questions. Kirwan took calls from some of the 16 regents, demanding to know what was going on. Kirwan said he would set up a conference call for that weekend to update everyone. He had no idea the movement would come more quickly.

“It was time to do or not do,” Delany said. “. . . I thought everything was ripe, ready to go. Let’s go.”

By Thursday morning, when the eight members of the Board of Regents’ finance committee assembled for a previously scheduled meeting at the University of Maryland University College conference center, several regents learned of the potential plan for the first time. “My first reaction was shock,” said Frank Kelly, the chair of the finance committee.

From the perspective of some regents and others intimately involved, the pace of the negotiations seemed frantic. But others were appeased when they heard whom Loh had been speaking with to gather support, how much research had been done and what the move to the Big Ten could provide Maryland.

“I learned what other people were already on board with this move,” said Miller, the president of the state senate. “And when I discussed the economics with Dr. Loh, you come to understand: This was the best move for the university in terms of athletics and academics and finances. The package that was put together, the ACC could not begin to compete with.”

At 8:30 a.m. Friday, the teams from Maryland and the Big Ten met via conference call for three hours. Delany had a dentist appointment that came and went. They broke, then re-engaged in the afternoon. What had started as a vague idea — something Loh hardly understood when he had that initial conversation with colleagues more than two years earlier — was becoming a reality.

“It finally came down to a proposal put in front of us,” Anderson said. “. . . It came to a point where both parties agreed that this could be a deal that both parties would be more than comfortable with and acceptable.”

At 6:45 p.m., the two sides reconvened by conference call for 15 or 20 minutes. Delany felt comfortable, as did others. But the main sticking point in Loh’s mind — public opposition — bubbled up. He received hundreds of angry e-mails, and the news hadn’t even been widely reported.

Meantime, ACC Commissioner John Swofford called both Loh and Anderson on Friday, hoping to find out their intentions. He called again Saturday. Neither returned Swofford’s calls, according to an ACC official. The silence told them Maryland’s intentions.

Early Saturday morning, Loh was in his own kitchen, joined by Anderson, Mehrtens, Ullmann, Eastman and Peter Weiler, the vice president for university relations. They walked through the deal one more time, and Loh gave his word. On Sunday morning, Delany flew to Washington. At 4:30 p.m., the Board of Regents met by teleconference.

On Monday morning, the regents gathered in secret and without going through the normal formalities — which they have since admitted violated the state’s open meetings act — and voted to endorse the move.

Tom McMillen, a former Maryland basketball player and U.S. congressman, cast the lone dissenting vote.

At 10:40 a.m., the Big Ten’s Park Ridge offices received a fax. Maryland had accepted. Delany gathered all the Big Ten presidents and chancellors by conference call. At 10:44 a.m., they began voting. By 10:46, they were done: 12 “yes,” zero “no.”

And that afternoon, Loh stood in front of a news conference in College Park and said, “I am pleased to announce that we are going to become a member of the Big Ten Conference.”

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