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Exit Fees Will Have Major Impact on Conference Re-Alignment
Author: Scarinci Hollenbeck, LLC
Date: February 21, 2014
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Conference re-alignment has been plaguing college athletics for a couple years now, with many schools making the jump from one league to another. At one point, it even seemed like the storied Big-12 Conference was going to be disbanded – but that didn’t end up happening.
One of the most recent schools to move is Rutgers University, which made the jump from the American Athletic Conference – formerly the Big East – to the Big Ten. According to ESPN, the school and league recently agreed to an $11.5 million exit fee.
However, other schools have run into legal issues attempting to switch conferences. Both the league and school have to agree to an exit fee, which seems to be difficult between the Atlantic Coast Conference and University of Maryland. These two parties are currently involved in a legal battle over the exit fee, as the league wants $50 million from Maryland, but the school believes it should be much lower.
The decision on this exit-fee could have significant ramifications on future realignment. If it is ruled that Maryland does in fact have to pay the ACC $50 million, it could deter future schools from leaving the conference. However, on the other end of the spectrum, should the exit fee be significantly reduced, schools could bolt from the ACC to other conferences.
The AAC could have this same problem with the much lower exit fee agreed to by the league and Rutgers. With schools such as the University of Connecticut and University of Cincinnati both attempting to get in a different conference, the AAC may want to consider establishing a much higher exit fee.
It appears as though we are a long way before conference re-alignment is in the past, and it will be interesting to see if schools like UConn and Cincinnati are able to make a clean exit in the future.
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