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A major athletic conference has filed a lawsuit against a rival conference, challenging the legality of a “poaching penalty” that requires the paying of millions of dollars if a school switches conferences. The penalty was included in a scheduling agreement signed last December, when two schools from the rival conference were scrambling to fill their 2024 football schedules.

The lawsuit claims that the penalty is anticompetitive and unlawful, as it imposes exorbitant and punitive monetary fees on the conference for accepting schools from the rival conference. The conference argues that the penalty was imposed at a time when it was desperate to schedule games and had little leverage to reject the terms.

When four schools announced their departure from the rival conference to join the plaintiff conference, the penalty jumped to $55 million. The commissioner of the rival conference sent an email to the plaintiff conference’s chief legal officer, noting the obligation to pay the fee within 30 days. However, the plaintiff conference responded by filing the lawsuit, claiming that the fee is unlawful.

The commissioner of the rival conference defended the penalty, stating that it was put in place to protect the conference from losing schools and to ensure its future viability. The commissioner argued that the plaintiff conference had freely entered into the agreement and was now trying to walk back its obligations.

The lawsuit also notes that the departing schools will be required to pay exit fees of around $18 million each to the rival conference. The plaintiff conference argues that these fees provide sufficient compensation to the rival conference and that there is no reason why the schools’ new conference should be responsible for paying additional penalties.

Negotiations between the two conferences to extend the scheduling agreement for the 2025 season broke down due to a significant gap in what the rival conference wanted and what the plaintiff conference was willing to pay. With both conferences now having seven schools, more movement is expected in the future, as the NCAA requires a conference to have at least eight football-playing schools.