The Atlantic Coast Conference sued the University of Maryland in a Greensboro, N.C., court Monday to compel the university to pay the conference’s exit fee of more than $50 million, according to the complaint obtained by The Washington Times.
Last Monday, Maryland announced its departure from the ACC to the Big Ten in the 2014-15 school year. That triggered the ACC’s exit fee, increased in September from one-and-a-quarter times the conference’s annual operating budget to three times the budget. The lawsuit puts the amount at $52,266,342.
Maryland president Wallace D. Loh “has refused to provide assurance” the university will pay and “has made it clear the defendant Maryland does not intend to pay the amount provided by the ACC’s constitution,” according to the 10-page lawsuit filed in North Carolina Superior Court. Maryland told the ACC the fee is “invalid and unenforceable” and indicated privately it does not intend to pay, the lawsuit said.
“There is the expectation that Maryland will fulfill its exit fee obligation,” ACC commissioner John Swofford said Tuesday in an emailed statement. “On Friday, the ACC Council of Presidents made the unanimous decision to file legal action to ensure the enforcement of this obligation.”
Maryland and Florida State objected to the fee’s increase. Loh described his opposition as a “legal and philosophical issue” and, last week, offered no specifics about how Maryland would pay.
“The exit sum of $50 million is, of course, a very large sum,” Loh said last week. “But I said that we have an arrangement under our membership that will assure the future of the Maryland athletics for decades to come. As we crunched those numbers, we are able to deal with this issue.”
A Maryland spokesperson declined comment Tuesday.
Though Maryland touted academics as a driving force behind the conference switch, money permeated the decision. Each Big Ten school received around $23.7 million in television revenues last year compared to $17 million per school with the ACC’s new television deal.
The exit fee, if upheld by the court, would consume a significant portion of the new money for a Maryland athletics department that has struggled to erase a years-long deficit.
The lawsuit keys on Loh’s role in the process, from his successful proposal to increase the conference’s withdrawal fee in 2011 to several public statements opposing this September’s hike. It also referenced Loh’s ominous statement that the issues were “for a court to decide.”
The ACC asked the court to declare the exit fee portion of the conference’s constitution valid, that Maryland is subject to the fee and for Maryland to reimburse its attorneys’ fees.
The ACC’s law firm, Smith Moore Leatherwood LLP, also represented the conference when the Big East sued in 2003 over the defection of Boston College, the University of Miami and Virginia Tech.
Bill Cole and Patrick Stevens contributed.