University President Wallace Loh has said he will attempt to negotiate an exit fee lower than the ACC’s fee of $50 million. The conference raised its exit fee from $20 million in September, and Loh expressed “legal and philosophical” objections to the hike.
A Prince George’s County judge will decide whether to move forward with the state’s lawsuit against the Atlantic Coast Conference after both parties presented arguments regarding a $52 million exit fee Thursday in Upper Marlboro.
An attorney representing the state argued the ACC’s exit fee is punitive, rather than compensatory for losses the conference will sustain after the university leaves for the Big Ten in 2014. John Kuchno, assistant attorney general, also pointed to the ACC withholding $3 million in conference revenues, according to several news sources, which the ACC said would go toward the university’s exit fee.
Additionally, the suit claims the university is an entity of the state and cannot be sued in a North Carolina court. Kuchno said Thursday the ACC was using the university to prevent other member institutions from switching conferences, according to The Baltimore Sun.
Judge John Paul Davey will decide whether the state’s lawsuit will move forward “as soon as possible.” Meanwhile, a North Carolina judge upheld the ACC’s lawsuit against the university, and the state is appealing that decision.
After university President Wallace Loh announced in November that the university would leave the ACC, the conference quickly filed a lawsuit in North Carolina, where it is headquartered, to ensure the university paid its exit fee in full. Within a few weeks, the state filed its own lawsuit in Maryland arguing the exit fee is a violation of antitrust law and restrains competition by preventing other schools from leaving.
Loh sat through the hearing yesterday, he said, along with Athletic Director Kevin Anderson and University System of Maryland Chancellor Brit Kirwan. Loh declined further comment as the case is ongoing.
The university’s move to the revenue-sharing Big Ten came four months after Loh cut seven teams from the university’s 27-sport athletic department to balance its budget, which has been hemorrhaging millions of dollars for several years. He said he was confident the university could negotiate a lower exit fee and that either way, it would have the money to pay the ACC.
The ACC’s Council of Presidents voted in September to hike up the exit fee from $20 million to $50 million, making it the highest conference exit fee. Loh, along with Florida State President Eric Barron, voted against the increase for “philosophical and legal reasons.”
The Big 12 has a $19 million fee; the Big East has a $5 million fee; the Big Ten and Pac-12 do not have exit fees but have media contracts through 2027 and 2024, respectively; and the SEC does not have an exit fee.
Keep checking The Diamondback for updates on this ongoing story.
