Maryland's Countersuit Envisions a Horrific Nightmare of College Football's Future

Patrick McDermott

The University of Maryland filed a countersuit in Guilford County yesterday, in an effort to get the money the ACC is withholding as part of the 52 million-dollar exit fee the Terrapins stand to incur as they leave for the Big Ten. News reports immediately focused on the claim that the ACC sent representatives from Wake Forest and Pittsburgh to recruit two Big Ten schools, but went into no detail as to why that would be relevant in this lawsuit. As the Washington Post has now posted the full filing (PDF) online, we can see the full argument Maryland is making. It's an incredibly depressing view of the college sports landscape, and worth teasing out. And if that doesn't really interest you, there's a fair amount of legal trash-talking of other conferences and universities, too.

The first thrust of Maryland's suit (paragraphs 22-32) simply argues that the ACC's $52 million fee is invalid, and to me (a layman) at least, it's rather strong. Maryland claims the ACC bylaws weren't followed in the vote to raise the exit fee in September of 2012. The issue should have been submitted in writing four weeks before the vote to a particular committee, and to the school presidents 15 days before the vote. It wasn't, thus Maryland should only have to pay roughly $20 million on their way out the door.

Furthermore, although Maryland's Board of Regents voted in November of 2012 to decamp for the Big 10, the paperwork to do so wasn't filed until June 23rd 2013. (The university had until July 1 to do so if they wanted out after the 2013-2014 school year.) Thus as full members in good standing prior to that, the ACC had no cause to withhold Maryland's share ($16 million), despite their announcement that they would not pay the $52 million on their way out the door (paragraphs 39-56). In the filing, this is portrayed as a deliberate attempt to sabotage Maryland's athletic programs. The sabotage will be reoccurring theme in Maryland's versions of events.

Similarly, since announcing their exit Maryland has been frozen out of conference meetings (paragraphs 61-68), including those involving scheduling — just in case you were wondering why Maryland basketball gets no home games against Duke or UNC this year. President Wallace Loh was also denied the opportunity to add topics to the meeting agenda (Suggested topic: Why y'all suck) and generally treated like a school that was about to join the Big 10.

At this point, the suit's arguments seems pretty standard. The ACC has done Maryland wrong, and they would like their $16 million dollars and the $52 million fee kicked to the curb. They also want an extra $10 million for their trouble.

The rest of the suit involves Maryland antitrust law, and here is where the Wake and Pitt representatives as well as a completely screwed-up view of college athletics come in. Their lawyers begin by demonstrating how few conferences are really appropriate homes for the Terps. With their athletic prowess — 4 acrobatic and tumbling championships! — only one of the Power 5 conferences is suitable. (If you're a Connecticut fan who stumbled across this and want to make a similar argument, well, tough.)

What's more, various geographical and academic factors further limit Maryland's options. The Pac-10 and Big 12 are right out; with one exception, neither conference has a member east of the Mississippi. Maryland reveals the ACC, in the process of doing their own internal competitive analysis, has concluded that "the associate travel issues resulting from West Virginia's affiliation with the Big 12 raised questions about the practical long-term viability of that conference affiliation after one year." (paragraph 103)

As for the SEC, well, Maryland has some bad news for you too:

[A] university such as Maryland would not consider an SEC affiliation a reasonably practice substitute for a Big Ten or ACC affiliation... Upon information and belief and as reflected in the ACC's competitive market analysis study, the average U.S. News ranking of conference member institutions for the ACC and the Big Ten is much superior to that of the SEC.

Maryland thus concludes their only homes are the ACC or the Big Ten. And if the ACC is acting to limit Maryland's exit, well, they're acting in an anticompetitive manner. Because consumers benefit greatly from such defections. In fact:

Switching conference affiliation is a method by which an academic institution can enhance its reputation and brand and its ability to attract student-athletes, students, faculty, and coaches. Realignment also presents an opportunity to join conferences with universities with common attributes and missions. The rapid conference realignment that has occurred in recent years (and that is likely to continue, absent unreasonable restraints on competition) has enabled institutions of higher learning to enhance the academic, athletic, and research opportunities available to their students, student-athletes, and faculty through both increased revenues and enhanced visibility and repetitional benefits.

[...]

Conference realignment can create more appealing conferences that promote and increase consumer welfare by allowing the member universities not only to compete more effectively against other universities but also, through major sports programs such as football and basketball, to attract consumers and entertainment spending that might otherwise be spent on professional sports or other forms of entertainment. Thus, a move by a university to another conference can increase the output of the newly-joined conference and its university members in an amount that exceeds any loss to the former conference. Given the benefits offered by the Big Ten and the natural fit of Maryland within the Big Ten, Maryland's move to the Big Ten would be expected — absent the effects of the Withdrawl Penalty — to result in increased output and enhanced consumer benefits compared to the status quo if Maryland remained in the ACC. Upon information and belief, that increase in consumer welfare and competitive benefits would also occur if certain other members of the ACC were to leave the Conference to join the Big Ten or the SEC.

Basically, the nation is much better off if teams switched conferences every few years. Especially if that involves leaving the ACC. And schools totally would, were it not for the patently unjust exit fee. Instead of increasing the consumer welfare, this sounds like a nightmare, where college sports is ripped from the context that makes it enjoyable in the first place, and were left with an uncertain landscape and an ever-contracting number of viable institutions. A "free market" of conference affiliations puts the future of the sport in the hands of a very few commissioners, the sort of antitrust environment Maryland purports to avoid.

Strangely enough, the ACC encouraging schools (presumably Penn State and perhaps Northwestern) to leave the Big Ten was an action "designed by the ACC to enable the ACC (and its member universities) to extract more lucrative terms from potential broadcasters." When we do it, it's increasing consumer welfare, but when you do it it's to line our own pockets.

Maryland also raises a fuss about how no other conference has an exit fee – "no other" being limited to the Big Ten and the SEC, the two east of the Mississippi. This also overlooks the Big Ten's grant of media rights through 2027 which is a much bigger deterrent to schools leaving. And then comes the hammer. Under Maryland antitrust law, victims are to be awarded three times the damages. Remember the previous 146 paragraphs arguing imposing so high an exit fee was anticompetitive and damaging to the university? Well, the Terps would like to be paid three times that, or $157 million dollars in punitive damages. Hence the torturous exclusion of so many other potential conferences. This has to be an antitrust case, because that's where the big money is. This seems like a pretty blatant bluff designed to force a settlement, as I don't see the antitrust argument getting much traction — it already failed to convince a judge in Prince Georges county — but I am in no way a lawyer.

It's obvious Maryland believes, or would like the court to believe, that the ACC is destined for the trash heap, with only the exit fee binding it together. And they seem to be willing to throw a lot of dirt in the process of escaping their own debt, hinting at nefarious moves by ESPN, besmirching a few other conferences, and throwing out random gossip about the ACC's own future. It gets headlines, but I'm not sure it's going to get them off the hook. And both as we've observed and the counterclaim lays out, in paying the full exit fee "Maryland has incurred and will incur substantial damage and injury from any resulting curtailment of its intercollegiate athletic programs and its ability to compete and participate in various markets."

So keep trying to get out from under your debt, Terps. It will if nothing else make for interesting reading.

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