Friday, February 16 update: The ACC is fighting back against Florida State and ESPN’s Andrea Adelson explains the latest developments below.
The ACC just filed its motion to dismiss or stay the lawsuit Florida State filed against the conference in Leon County, Fla.— Andrea Adelson (@aadelsonESPN) February 16, 2024
In its motion, the ACC argues the court should dismiss FSU's amended complaint for 4 reasons:— Andrea Adelson (@aadelsonESPN) February 16, 2024
1. FSU has not presented a "legally cognizable theory" for establishing why a Florida court has jurisdiction over the ACC, based in North Carolina.
2. Venue is not proper
3. FSU's "penalty" claim challenging its contracts with the ACC is "not ripe" because it has not said it is withdrawing from the conference or that it intends to withdraw.— Andrea Adelson (@aadelsonESPN) February 16, 2024
4. FSU does not state a cause of action
Florida State University fired a major shot at the Atlantic Coast Conference on Friday as its board of trustees unanimously voted to file suit against the league over the legality of its grant of rights agreement and $130 million exit fee. The school has made it clear that it wants out of the ACC and while plans for this legal fight were already in motion, the process was exacerbated by the undefeated Seminoles being snubbed by the College Football Playoff committee earlier in the month.
Some of you probably have questions about this entire ordeal and I’ll break down the situation below.
What is a Grant of Rights agreement?
A Grant of Rights or “GOR” is an agreement schools make to sign over their media rights to their conference over a certain period of time. The conference then uses this to negotiate media rights deals through different outlets and the schools each receive a share of the annual revenue. Schools are effectively locked into their leagues for the duration of the agreement and usually have to pay a hefty exit fee to leave, along with forfeiting tv revenue.
In 2016, the ACC extended its media rights agreement with ESPN through 2036. The conference distributed an average of $39.4 million to each conference during the 2021-22 academic year.
Why is FSU upset?
While the ACC does have one of the more lucrative media rights agreements in all of college sports, it pales in comparison to the recent deals signed by the Big Ten and SEC. Located in Tallahassee, FL, Florida State operates within the SEC footprint and considers itself peers with powers like Alabama, Georgia, and rival Florida. Yet, the current ACC deal puts them behind those schools financially, and some have estimated a potential $30 million revenue gap by the time 2036 rolls around.
FSU began making its dissatisfaction with this reality publicly known earlier this year, with other institutions like Clemson, Miami, and North Carolina also looking into ways to break the ACC’s Grant of Rights. The Seminoles have also pushed for unequal revenue sharing, where top football brands like themselves receive more in annual tv revenue than conference peers like, say, Syracuse or Wake Forest.
What is FSU’s legal basis for this?
Tomahawk Nation’s Jon Loesche laid out what Florida State will argue to challenge the ACC’s GOR. They argue that the exit fees violate Florida antitrust law and that the GOR presents an unenforceable penalty, among other points. Both FSU and the ACC are walking into uncharted waters as no school has ever legally challenged a GOR until now. The league’s binding GOR agreement has been described as ironclad, but we’ll see just how ironclad it is when it’s actually tested in a court of law.
Did FSU being left out of the College Football Playoff trigger this?
As mentioned before, Florida State board of trustee members were already pursuing this and the CFP snub only amped up the urgency to make this happen. The committee’s decision to leave the 13-0 ACC champion out of the playoff solidified the perception of the ACC being an inferior league compared to the “Big 2” of the Big Ten and SEC. And as one of the sport’s “blue blood” programs, the Seminoles do not want to be associated with a conference perceived as inferior.
What could it cost FSU to break GOR?
Florida State board of trustees members estimate that it could cost the school $572 million to outright break their Grant of Right’s agreement with the ACC. That includes the steep exit penalty and loss of media revenue from over the course of the deal. The athletic department has considered raising funds through private equity to fill any potential revenue gaps.
What was the ACC’s reaction to this?
The ACC released a statement expressing its disappointment in FSU’s decision to file this lawsuit and expressed its confidence that the Grant of Rights will be held up in court.
The ACC responds to the FSU lawsuit: "We are confident that the Grant of Rights, which has been honored by all other universities who signed similar agreements, will be affirmed by the courts." pic.twitter.com/m2gPvycA8L— Nicole Auerbach (@NicoleAuerbach) December 22, 2023
Where will FSU go if it leaves the ACC?
Assuming that it does manage to break out of their Grant of Rights agreement with the ACC, the earliest Florida State could possibly leave is in 2025. The Seminoles would most likely be courted by both the Big Ten and SEC, as those two power leagues would try to bolster themselves by adding another large brand.
The SEC wouldn’t necessarily “need” Florida State, considering that it already has a presence in the state of Florida with UF. However, it geographically makes sense and the league did heavily pursue the Seminoles back in the early 1990s. Annual marquee matchups like FSU-Georgia, FSU-Alabama, and FSU-Texas would draw massive television audiences and sold out crowds at each venue.
Meanwhile, the Big Ten will become a true coast-to-coast conference with the additions of Oregon, UCLA, USC, and Washington in 2024. However, they have yet to infiltrate the south and the addition of a power like FSU (along with another sought-after school like North Carolina) would expand its reach to literally every corner of the country.