ACC Network – Florida State University fans gather for a FSU Seminole football game in Doak Campbell Stadium. — Courtesy: Shutterstock — Ruth Peterkin
In a significant first step toward a possible exit, the Florida State Board of Trustees unanimously decided on Friday to sue the ACC, contesting the league’s grant of rights and withdrawal penalties. The seven-count lawsuit, formally filed in Tallahassee Circuit Court, claims the ACC broke Florida’s antitrust laws and breached the contract by failing to generate sufficient value for media rights. Furthermore, it argues that the staggering $572 million withdrawal penalty—of which $130 million comes from TV revenue—is unenforceable.
The one-hour meeting was open to the public because of the state’s Sunshine Law. “We have exhausted all possible remedies within the conference, and we must do what’s best for Florida State not only in the short term but in the long term,” board chair Peter Collins stated.
The media rights agreement with ESPN, the conference’s media partner, runs through 2027 with a unilateral right to exercise a nine-year option through 2036. Nonetheless, the historic action targets the alleged “ironclad” provision of rights binding members to the ACC through 2036. According to the lawsuit, ESPN allegedly offered the ACC an “ultimatum” in the 2016 contract negotiations, saying that there would be no more talks until the agreement expired.
Florida State was the target of a preemptive lawsuit filed by the ACC on Thursday in Mecklenburg County, North Carolina, alleging the university is not allowed to contest the grant of rights agreement.
The final straw for Florida State may have been their elimination from the College Football Playoff field as the unbeaten Power Five conference champion, but the school has already expressed a desire to look into options outside of the ACC, mainly because of the widening revenue disparity with the SEC and Big Ten. The ACC has made a concerted effort to secure increased remuneration for its elite members. In May, the league implemented “success incentives,” which increased the share of the distribution given to schools that had success in the postseason.
FSU also decided against inviting Stanford, SMU, and California for the upcoming summer. During the meeting, FSU outside council member David Ashburn stated that the ACC’s negotiating leverage in future media rights agreements will be lessened by the remaining conference members and that the three new members of the conference do not offer football with tier-one media value.
“Ultimately, what we are fighting for here is not just for our own best interests at FSU,” said board member and former Seminoles quarterback Drew Weatherford. “I think that we are fighting for true competitive spirit. All we are looking for is an equitable competitive environment where teams that are competing for a championship are waking up and playing by the same rules.”
Difficulties in Departing
With a 20-year deal inked with ESPN in 2016, the ACC holds the longest television contract and grant of rights of any FBS conference. At least seven ACC institutions have examined the protocols for violating the grant of rights, but after examining the specifics, they have all decided to remain in place.
The cost of buying out the TV deal would be about $130 million, and a separate agreement to withdraw from the grant of rights would take the total withdrawal charge above $500 million. Even yet, it’s doubtful that any ACC schools could join one of the two major conferences without accepting a partial share, making it a dubious value, industry insiders told CBS Sports’ Dennis Dodd in May.
Florida State considered using private equity to raise money in August as well. To discuss options, the school communicated with private equity company Sixth Street and JPMorgan Chase. In essence, Florida State may gather funds in advance to cover the cost of a possible rights purchase grant and then reimburse the private equity company with proceeds from sponsorships and future broadcast rights sales. A similar strategy to raise funds was contemplated by the Pac-12 in 2019, but it was ultimately abandoned.
What would become of FSU?
The SEC would be a great place to land. The conference has made a name for itself as the best in college football, and the Seminoles easily fit in. But there are a lot of things going against them. It is highly likely that Florida, an in-state competitor, would take all necessary measures to prevent FSU from joining the league. In terms of recruitment and on the field, adding Florida State would be perceived by many SEC members as more of a threat than a benefit.
The Big Ten is now a possible Hail Mary destination. Maryland, a former ACC partner, is the closest school in the league to FSU, although FSU might be advantageous. Despite the presence of several iconic brands in the Big Ten, only Ohio State and USC, the two prospective league members, have emerged victorious in the national championship era of the BCS/CFP. Conversely, the ‘Noles have two (1999, 2013). Adding a southern power might also provide the Big Ten with another avenue to recruit in Florida, which is one of the top three states for college football recruiting.
On the other hand, Florida State may find itself in a dire situation if the Big Ten shows no interest. The Athletic’s Michael Alford, the athletic director at Florida State, stated in November that independence was “not a true option” due to scheduling conflicts and media contracts. It is an odd destination, given that the Big 12’s media arrangement is similar to the ACC’s.
The difficulty of landing in the key conferences is only increasing. Until the media rights agreement expired, Oregon and Washington received around 50 percent of the shares that they left the Pac-12 for the Big Ten. Notably, SMU is forgoing a seven-year broadcast payout in exchange for joining the ACC. To convince another league, Florida State might need to make a comparable temporary makeover.
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Melissa’s career in writing started more than 20 years ago. Today, she lives in South Florida with her husband and two boys.
