Today’s lawsuit brought by The Atlantic Coast Conference against the University of Maryland is filled with mystery and clarification.
First, the clarifications.
All of the ACC members agreed to the suit. While this has been claimed to be definitive proof of that the ACC will stay together, there is little doubt but that a loss can require a reduction of the amount and that any lawsuit can be settled.
Maryland is not being sued for breach of contract. It is a lawsuit seeking a declaration that its provision is valid and can be enforced against Maryland due to the almost constant comments by Doctor Wallace D. Low that Maryland would not pay the amount required.
The lawsuit also clarified the terms of the withdrawal provision and where it came from. This provision is that the exiting member has to pay three times the total operating budget of the ACC that year. And while Doctor Low agreed to pay an amount equal to one and a half times the amount the shocker is that he was the one who favored that type of calculation. When it showed up again, apparently in the middle of BIG negotiations, Doctor Low voted against the amount despite proof that it was logically related the potential losses, including apparently the new TV deal that had been cut with ESPN and other expenditures.
By the pleadings themselves, it appears certain that the complaint cannot be dismissed from a substantive standpoint.
Now some of the mystery.
First, why did the ACC not sue for anticipatory breach of contract, breach of fiduciary duty, breach of constructive trust, and deceptive trade practices? Such claims appear at first glance by someone not a North Carolina lawyer to be at least viable and could have resulted in punitive damages.
This longtime common law contract concept of anticipatory breach allows the affected party to sue the repudiating party prior to the time breach would actually occurred. The end result is the same, with the party owing what is due, but the legal requirements are different.
Also, Maryland’s position would be very dicey if facing such a claim, especially if they are not permitted any financial relief by the Big Ten, or as they say the BIG. This is because after this lawsuit is filed, retraction is not permitted unless the breaching party shows it can and will perform the contract. Thus, Maryland would have to show it is able to pay and will pay the contract amount before it is allowed to come back into the contract.
Second, did Maryland actually think that its president could go around talking the way he did and not be sued? Or were its lawyers wringing their hands and mumbling like crazy about how Doctor Low does not listen to their recommendations?
Third, why did BIG and Maryland proceed in silence, keeping the ACC completely uninformed about their negotiations until they were announced? Even if this is not a contractual requirement of membership, it is filled with risk. And in fact could have resulted in a lawsuit against BIG and may still do so depending on splitting claims prohibitions in North Carolina.
Fourth, are BIG and the ACC already negotiating their share of liability as to the potential claims against them?
Fifth, why can’t we see the ACC membership contract. It is certainly not easily located if it is available. Surely, disclosure is required by the state records act. I have an older Big East membership agreement, but no ACC contract. Maybe the NCAA should require all of them to be disclosed to the public.
Finally, the biggest mystery of all. If Maryland cannot get up the cash, or agree to pay the $52 million from its alleged $200 million over time with the ACC’s consent which the ACC might not accept given Maryland’s financial status, what happens?