Rutgers Sues Big East Over Exit Fees

[ge1974]

You have to be kidding me. The reason the Big East has not collected the exit fees is because Syracuse, PITT, Louisville and ND have not left the Big East yet. These schools may end up staying in the BE after the ACC commits suicide with many of their schools ready to leave soon.

TCU is being sued by the Big East so the league can collect their $5 million promised. In its the courts. I thought that West Virginia already paid their $20 million early exit fee.

http://espn.go.com/new-york/college-sports/story/_/id/8713564/rutgers-sues-big-east-exit-fee-wait-time

[TheSultan]

They are just finding whatever legal hole they can find and are driving a truck through it. Par for the course these days.

[IWB]

Rutgers could have at least waited until the ink on the initial announcement had dried.

[Goose85]

Hey Rutgers - your exit fee is $10 million and you need to stay 27 months. Want to leave early, do like WVU did and pay an increased exit fee (with the help of the Big 12).

Rutgers wants out after next year - the cost is $20 mil.

[TulsaWarrior]

If you can't pay the price don't do the dance.

[TheSultan]

Hey Rutgers - your exit fee is $10 million and you need to stay 27 months. Want to leave early, do like WVU did and pay an increased exit fee (with the help of the Big 12).

Rutgers wants out after next year - the cost is $20 mil.


There is no chance that happens. Syracuse got out early and paid $7.5M. My guess is Rutgers will probably pay about the same.

[Goose85]

There is no chance that happens. Syracuse got out early and paid $7.5M. My guess is Rutgers will probably pay about the same.

Isn't the Syracuse amount based on the $5 million exit fee, so they paid 150% of the exit fee. Syracuse never sued and initially agreed to stay the 27 months so the Big East was inclined to cut them a deal. For the extra 50%, they let them out in two years not three. Not sure what Pitt's deal is.

If Rutgers wants to leave after 1 year instead of 2, I'd say if Syacuse paid 150% to leave after 2, the Rutgers should pay 200% to leave after 1 year.

[TheSultan]

Isn't the Syracuse amount based on the $5 million exit fee, so they paid 150% of the exit fee. Syracuse never sued and initially agreed to stay the 27 months so the Big East was inclined to cut them a deal. For the extra 50%, they let them out in two years not three. Not sure what Pitt's deal is.

If Rutgers wants to leave after 1 year instead of 2, I'd say if Syacuse paid 150% to leave after 2, the Rutgers should pay 200% to leave after 1 year.

You are correct. I thought the basis was the same $10M.

[bleedbluegold03]

that's the one place that I think the Big Easy messed up on something that is completely in there control; the ACC charges $50M for someone leaving early and we let someone out at $7.5M?

and people wonder why we're treated like a joke...

[The Reptile]

that's the one place that I think the Big Easy messed up on something that is completely in there control; the ACC charges $50M for someone leaving early and we let someone out at $7.5M?

and people wonder why we're treated like a joke...

And yet it did not keep Maryland from leaving. Mostly because the think they'll end up paying less. Regardless if a $50 million exit fee doesn't work, what will?

[IWB]

The only reason why they will play less than the $50 is because they voted against it, will argue that it was forced upon them and that they are leaving because that rule was forced on them - a legit argument

[bleedbluegold03]

I am not implying a higher fee would've kept the dogs at bay. i am arguing make it more so that the teams left can get as much money as possible. $7.5 M vs $50 M is a joke. The difference just for Marquette is staggering

[Gato78]

Bylaws, to which they are signatories, require compliance with league rules, regardless of vote. No organization can allow a member an exemption from rules if the member voted against the rule.

QUOTE=Jim Ganzer, "IWB";16587]The only reason why they will play less than the $50 is because they voted against it, will argue that it was forced upon them and that they are leaving because that rule was forced on them - a legit argument[/QUOTE]

[TheSultan]

Bylaws, to which they are signatories, require compliance with league rules, regardless of vote. No organization can allow a member an exemption from rules if the member voted against the rule.


In membership organizations, that isn't always the case. Organizations cannot simply vote in punitive rules without giving members a chance to respond. They would have been much better off voting in the new exit fees with a six month waiting period. That way the members have six months to make a decision. The immediacy of the new fee is probably what is going to cost the ACC some cash.

[TheSultan]

that's the one place that I think the Big Easy messed up on something that is completely in there control; the ACC charges $50M for someone leaving early and we let someone out at $7.5M?

and people wonder why we're treated like a joke...


Two thoughts. First, the reason they fees aren't higher is because a majority of the members don't want to do something that could bite them in the ass should another conference come calling. You think schools like UConn, Cincy, etc are going to limit their options? You think Marquette should?

Second, I actually philosophically disagree with huge exit fees like those of the ACC. If a school want to leave, I don't think an excessively punitive exit fee should be the reason to keep them around. Let them pay enough to make them think about it. $10-20M IMO is more appropriate.

[BLT]

Sultan, I disagree with your assessment on lower exit fees. Because of the damage done to the remaining schools via a harmed product, diminished national publicity and exposure, lower valued TV deals, harmed recruiting and enrollments, negative publicity, and higher travel costs for all sports over the long term, I would argue the cost of a strategic partner getting up and leaving is potentially more than agreed, especially when split numerous ways. An exit fee agreement also diminishes the risk of each remaining school filing their own law suits on those breaking a legal partnership.

[TheSultan]

Is replacing Maryland with Louisville really causing the ACC $50 million in damages? I don't think it is even close to that - I mean it really isn't *that* much more expensive for Georgia Tech to travel to Louisville than Maryland. The fee is simply punitive.

[BLT]

Is replacing Maryland with Louisville really causing the ACC $50 million in damages? I don't think it is even close to that - I mean it really isn't *that* much more expensive for Georgia Tech to travel to Louisville than Maryland. The fee is simply punitive.

The ACC media deal goes though 2026-2027 with much of it backloaded and dependent on the strength of the ACC in the future...which by Maryland's departure has caused other strong schools to consider fracturing off and further damaging the conference brand...with 14 schools now in the ACC in the future after Maryland's departure. So, does $250k damage per school per year seem too high when you divide that pot and consider the life of that deal? I think a good lawyer could argue otherwise. The exit fee raise to $50mm wasn't just for the next year, but for the future value of that media deal after it was enacted.

[MUMac]

In membership organizations, that isn't always the case. Organizations cannot simply vote in punitive rules without giving members a chance to respond. They would have been much better off voting in the new exit fees with a six month waiting period. That way the members have six months to make a decision. The immediacy of the new fee is probably what is going to cost the ACC some cash.

Not necessarily true. There already was a penalty in place. The by-laws state how a change is implemented - I believe the ACC is a 3/4 vote. They signed the original by-laws and have to abide by those. The change included.

[TheSultan]

I think Maryland ends up paying something close to the previous penalty...not the new one.

[BLT]

I think Maryland ends up paying something close to the previous penalty...not the new one.

The $12mm, $14mm or $20mm one? I think the ACC fights this one hard...the lawyer fees and years of appeals may cost Maryland $14mm. The ACC has everything to lose and everything to gain by playing hard ball with them. WVU said the same thing and wound up paying the $20mm just to get out early as the B12 needed them or their media deal would blow up.

[TheSultan]

Maryland will likely use state attorneys so there won't be legal fees. Which brings up issues over which court the battle will be fought and how quickly the ACC can actually collect if a court rules against them.

[MUMac]

Maryland will likely use state attorneys so there won't be legal fees. Which brings up issues over which court the battle will be fought and how quickly the ACC can actually collect if a court rules against them.

I would suspect the by-laws address which court would be the one to hear any appeal or suit.

[BLT]

Maryland will likely use state attorneys so there won't be legal fees. Which brings up issues over which court the battle will be fought and how quickly the ACC can actually collect if a court rules against them.

In North Carolina?
http://espn.go.com/college-sports/story/_/id/8683350/maryland-terrapins-sued-acc-exit-fee-big-ten-departure

And, state lawyers are not free...there are opportunity costs. Using public resources to defend this verus working on endangered children, or battered women or defending the state versus false claims is more of a proper use of public lawyers...not defending a money grabbing move by a university president. Not likely to end well in a pr sense in a state and athletic department struggling fiscally...or legally. As I said, the Big East, in the midst of media negotiations were more apt to settle quickly and get on with their future. The ACC already has their media deal and they will fight Maryland to the bitter death as indicated by their first strike versus Rutgers who went to court first against the BE.

[TheSultan]

I fully understand opportunity costs, but the University of Maryland won't have to write a check for opportunity costs. But the North Carolina location is probably exactly what Mac said it was.