The Atlantic Coast Conference presidents on Monday approved an agreement that basically ensures that the league controls all the schools' media rights through the 2026-27 season. As a result, if any member school decides to leave the ACC, it forfeits its share of revenues received through those media rights.
Maryland and the ACC are battling over Maryland's $50 million exit fee, so it's not known exactly how the new agreement will affect Maryland's cash flow, but according to one source, it could lessen the fee. More from the Washington Post:
In January, Maryland Attorney General Douglas F. Gansler moved to dismiss the ACC’s lawsuit in Prince George’s County Circuit Court, saying “a North Carolina court has no jurisdiction over the sovereign state of Maryland and its public universities,” according to a news release. According to ESPN.com, there will be a hearing on May 23 to evaluate the ACC’s motion to dismiss the lawsuit in Maryland.
But the grant of rights agreement could make it more unlikely that the ACC will succeed in extracting its full exit fee from Maryland, roughly $52 million or three times the annual operating budget.
So what does this mean?
Exit fees had been a deterrent for schools leaving a conference but with all the expansion occurring over the last few years, their effectiveness has been diminished. The exit fee is designed to penalize a departing team since its absence could cause a financial hardship or instability for the league—the former Big East conference knew this all too well.
But the ACC has added Louisville, Notre Dame (sans football and hockey), Pittsburgh and Syracuse, so there's not much, if any, long-term instability in the conference. While Louisville won't be an ACC member until 2014, both Pittsburgh and Syracuse will be new ACC members in a few months. Right now, Maryland's exit fee doesn't appear necessary for the ACC's survival since Louisville will take Maryland's place in 2014. And the ACC still has a sweet contract with ESPN running through the 2026-27 season.
"Starting July 1, the ACC's average annual media rights intake per school will surpass $20 million, according to a league source," a CBS Sports report notes.
Would giving up $20 million be enough incentive to keep all current ACC schools from leaving? In most cases, the answer would probably be yes, but what if a super conference were formed?
More to the point, what if the SEC and Big Ten formed one giant conference? The revenue generated by that super conference would be enough to encourage a school to leave its current conference if the super conference offered a loan as compensation for that school's lost revenue. In that particular scenario, the ACC's media agreement would probably not affect a school's decision to leave for another conference.
At least one school left a conference despite the expected financial woes that came along with it. West Virginia left the Big East for the Big 12 last year and its athletic department is in the red—financial penalties are not always enough to keep a school in a conference.
That brings up another point: Would potential membership in another conference be enough reason for a school to leave the ACC?
Typically, a conference won't actively recruit another school because tortuous interference can incur huge monetary damages via civil court action. Of course, a school would never leave a conference for another conference unless it knew it was going to be invited to the new conference, but it goes without saying that there is some decorum in conference expansion.
But what if the Big Ten or SEC was in play for Miami or Florida State? The schools would probably have a tougher time getting 75 percent of the SEC membership's approval because that conference is looking to expand its footprint, not saturate it in one state. But the very idea of this happening is not without merit.
Remember, Florida State and Maryland were the only two schools that voted against the ACC's $50 million exit fee proposal last year—Maryland will be leaving for the Big Ten next year. Why would a school vote against a proposal that makes it almost fiscally impossible for a team to leave its conference?
To protect itself in case it wants to leave the conference? Well...yeah. Florida State board of trustees chairman Allan Bense called the $50 million exit fee "punitive" last year, but the approval of the recent media rights agreement has elicited some positive responses as well. More from the Orlando Sentinel:
"The positive aspect of it is that we are now committed to letting everyone know that we’re going to be ACC brothers together now and forevermore," FSU coach Leonard Hamilton told the Sentinel on Wednesday.
"In my opinion, any potential realignment of the Atlantic Coast Conference ended with this vote," Miami athletic director Blake James said in an ESPN report.
The ACC has powered up its engines and activated its deflector shields to point "up."
Unless the Death Star comes rolling in—and I'm not betting against that—the planets have aligned and all is back to normal.
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