Florida State Sues ACC, Setting Stage For Fight To Leave Over Revenue Concerns
Dec 23, 2023, 2:27 PM
(Photo by Mike Ehrmann/Getty Images)
TALLAHASSEE, Fla. (AP) — Florida State sued the Atlantic Coast Conference on Friday, challenging an agreement that binds the school to the league for the next 12 years with more than half a billion dollars in fees for leaving and taking the first step in a lengthy and uncertain process toward a potential exit.
“Today we’ve reached a crossroad in our relationship with the ACC,” Florida State Board of Trustees chairman Peter Collins said during a trustees meeting to approve the legal action.
After months of threats and warnings from Florida State, the lawsuit was filed in Leon County Circuit Court. The suit claims the ACC has mismanaged its members’ media rights and is imposing “draconian” exit fees. Breaking the grant-of-rights agreement and leaving the ACC right now would cost Florida State $572 million, according to the lawsuit.
The Florida State board of trustees voted unanimously to file suit against the ACC to challenge the legality of both the league's grant of rights and $130M withdrawal fee, a necessary step to plot its future and potential exit from the conference.
— ESPN (@espn) December 22, 2023
In a preemptive counter attack, the ACC filed a lawsuit in North Carolina against the Florida State Board of Trustees, claiming the school could not challenge the grant of rights that it had signed and that these issues should be decided in the state where the conference is located.
ACC Commissioner Jim Phillips and Virginia President Jim Ryan, chairman of the conference’s board of directors, said Florida State’s actions are “in direct conflict with their longstanding obligations and is a clear violation of their legal commitments to the other members of the conference.”
“All ACC members, including Florida State, willingly and knowingly re-signed the current Grant of Rights in 2016, which is wholly enforceable and binding through 2036,” their statement said. “Each university has benefited from this agreement, receiving millions of dollars in revenue and neither Florida State nor any other institution, has ever challenged its legitimacy.”
Here’s a copy of Florida State’s lawsuit. 38 pages worth
Florida State University Board of Trustees v. Atlantic Coast Conference. FSU opens as a 3-point favoritehttps://t.co/AoKOcuBYRL
— Brett McMurphy (@Brett_McMurphy) December 22, 2023
David Ashburn, an attorney representing Florida State, said during the board meeting the ACC’s grant of rights violates antitrust law, has unenforceable withdrawal penalties and is not even a valid contract. The lawsuit also accuses the ACC of breach of contract by not upholding conference bylaws and violation of public policy.
“It’s hard to handicap where those claims will go,” said Mit Winter, a Kansas City, Missouri-based sports attorney. “And I think Florida State knows that as well. I think they threw in anything they could potentially think of as a colorable argument to get them out of the grant-of-rights agreement.”
Florida State is looking for a way out of a conference it has been a member of since 1992. During its time in the ACC, Florida State has won three football national championships, the most recent in 2013, and made the first College Football Playoff in 2014.
The Seminoles were left out of this year’s playoff, despite an unbeaten record. Florida State President Richard McCullough said the playoff snub did not prompt the lawsuit.
From the FSU Board of Trustees' presentation — Florida State believes it would cost $572M to get out of the ACC right now: pic.twitter.com/3bymUfi4ub
— Nicole Auerbach (@NicoleAuerbach) December 22, 2023
“This is not a reaction, but something we’ve done a lot of due diligence on,” he said.
The first sentence of Florida State’s claim is: “The stunning exclusion of the ACC’s undefeated football champion from the 2023-2024 College Football Playoff in deference to two one-loss teams from two competing Power Four conferences crystalized the years of failures by the ACC to fulfill its most fundamental commitments to FLORIDA STATE and its members.”
Only the Southeastern Conference has placed more teams in the playoff than the ACC. Clemson won two CFP titles for the ACC.
Florida State leaders believe the ACC locked its members into an undervalued and unusually lengthy contract with ESPN that leaves the Seminoles’ athletic programs at a massive disadvantage against schools in the Big Ten and Southeastern Conference, which have TV deals that pay more over a shorter period of time.
“We are faced with the fact that the ACC is locked into a deteriorating media rights contract at revenues far below other conferences,” Collins said. “It’s one thing to fundraise and make up $7 million. It’s another entirely to annually make up over $30 million to $40 million.”
Florida State was one of 15 ACC members to sign the grant of rights, which hands a school’s media rights over to the conference. They are commonly used by college sports conferences to provide stability and certainty to media partners.
No school has ever challenged a grant of rights to exit a conference. In the recent wave of conference realignment, moves were made to line up with the expiration of the grant of rights in the Pac-12 and Big 12.
The Big 12 negotiated at settlement with the Oklahoma and Texas that allowed the schools to leave one year early for $50 million each.
“I guess the one factor here that might not be present in some of the other situations, I think the ACC is really worried if we let Florida State leave there’s going to be like a domino effect and the ACC might not exist anymore,” Winter said.
Florida State leaders also say the ACC refuses to change its revenue distribution model to match FSU’s value.
“It is a simple math problem,” Florida State athletic director Michael Alford said.
Florida State has filed its suit in Leon County Circuit Court against the ACC, accusing the league "of restraint of trade, breach of contract and a failure to perform. It also challenges the legality of its withdrawal penalties," the school says. pic.twitter.com/krcgGpE82b
— Ross Dellenger (@RossDellenger) December 22, 2023
Florida State is not the only ACC school to push for more revenue. Clemson, North Carolina and others have also made the case, but Alford and the Seminoles have been the most vocal.
The ACC has agreed to create a bonus system that would direct more revenue to schools that have postseason success in football and basketball. To add to that pot, the ACC is expanding to include Stanford, California and SMU next year. Those schools have agreed to decreased revenue distribution upon entry for several years. The extra money ESPN is obligated to pay for new members will go to the bonus pool.
Florida State was one of three ACC members, including Clemson and North Carolina, to oppose the expansion, which the lawsuit claims could hurt the long-term value of the ACC’s media rights and did nothing to address the Seminoles’ frustrations.
“It’s time for us to try to do something about it,” McCullough said.