ACC
Florida State to Sue ACC on Media Rights and Withdrawl Penalties
Published
11 months agoon
Florida State Board of Trustees voted unanimously on Friday to file suit against the ACC in order to challenge withdrawal penalties, making it easier for the school to leave the conference.
This is the first step for FSU to try and leave the ACC. The reasoning for the lawsuit is to challenge the media rights agreement, or grant of rights, that the ACC schools signed in 2016. The grant of rights agreement gives the ACC broadcasting rights for its members’ home games through 2036. It also contains extremely high exit fees, in order to provide long term stability for the conference.
The legal group for FSU filed a suit the Second Judicial Circuit in Leon County, Fla., the county where the university resides in Tallahassee. In more legal terms, they filed for a complaint for declaratory judgment against the ACC.
A complaint for declaratory judgment allows the court to decide on responsibilities, obligations and rights in a legal dispute, but also clears up any uncertainty or misunderstanding in a dispute. A main benefit of a complaint for declaratory judgment is that it prevents the party from filing an unsuccessful lawsuit, saving money and time on expensive litigation.
Florida State will seek court guidance to see whether or not the ACC’s withdrawal fees or grant of rights have legal enforcement against the school.
The “draconian” exit fees, along with leaving behind their media rights profit, go up to $572 million, a number FSU lawyers have specified in their statement. The outstanding cost for the school to leave the ACC they consider “restraint of trade,” which is something that inhibits a particular party from engaging in transactions it normally would. FSU says that the exit fees and forfeiting media rights are both something that the ACC can’t enforce.
They also allege the ACC of a breach of contract with the media rights. They believe this occurred with the extension of the conference’s media rights with ESPN in ways that put the members at a disadvantage compared to other conferences, failing to increase the media value to bring in more profit and also with the addition of three new schools in Cal, Stanford and SMU, which they see as having, “weak media rights values, dimming the prospect of the ACC winning significant increases in revenue payments when its contract is up for renewal.”
Florida State lawyers allege that the ESPN deal with the ACC doesn’t extend through to 2036, which is when the grant of rights expires, but rather, in 2027. Essentially, there is no guarantee of any payment past the June 30, 2027 expiration date.
ESPN has a unilateral deal to extend those rights for a nine-year option through 2036. They also alleged that the nine-year option is something that they would have decided upon in 2021, but ACC commissioner Jim Phillips extended the deadline to February 2025, something they allege he did this without two-thirds of ACC membership.
The suit also alleges that the ACC members faced an “ultimatum” and had to sign a deal with ESPN in 2016, extending the grant of rights to 2036, or ESPN would not enter into future discussions on media rights. The requirement for the ACC schools to sign the deal also didn’t mean that ESPN had to guarantee their commitment to the ACC.
The $572 million estimated exit fee, that the Florida State lawyers and media consultants came up with has $429 million coming from releasing their media rights through 2036, which is $33 million per year over 13 years. It also includes the exit fee of $130 million, three times that of the entire operating budget of the conference, and then $13 million for unreimbursed broadcast fees, or $1 million every year for 13 years.
The Florida State Board of Trustees also asked the court, as long as they find the exit fees illegal or unenforceable, to put their leave date as Aug. 14, 2023, which would allow them to leave a year earlier. If this doesn’t occur, Florida State could still leave prior to Aug. 15, 2024, which would allow them to depart the ACC prior to the 2025-26 academic calendar year.
This isn’t the first time that the school or the board of trustees have threatened to leave the ACC or discussed doing so. Most of the talk around leaving began in August, with the school wanting more revenue distributions from the conference, as FSU sees themselves generating more money than the other members.
The ACC changed the way it distributes revenue recently, where they reward teams for success in football and men’s basketball. FSU wants to generate more money in ways outside of team performance, like marketing and television revenue, which again, the school claims to do better than the others in the conference.
Florida State football, despite winning the ACC Championship game and finishing with a 13-0 record, didn’t earn a spot in the College Football Playoff as they received the No. 5 seed. Alabama, a team with a loss, made it in over them with the decision from the committee coming down to FSU quarterback Jordan Travis suffering a season-ending injury weeks prior. Their absence is a major role to the school filing suit against the ACC on Friday.
ACC Filed Suit Against Florida State on Thursday
The ACC also filed a suit against Florida State on Thursday, according to documents Alison Posey of WCTV Sports obtained on Friday.
The lawsuit is 33 pages long, which includes reasons for the ACC filing suit and exhibits to help prove their case during a trial. Some of the major complaints are that Florida State doesn’t have the ability to challenge the grant of rights and that instead of Florida, the case must take place in North Carolina, the state where the ACC has its headquarters at.
It also features examples against Florida State’s case of them missing out on the College Football Playoff, such as the ACC having 20 National Championship, 14 in 2023, more than any other conference. Other arguments from the ACC feature Florida State’s support for the extension of the grant of rights in 2014 and that the conference would suffer if Florida State challenges the grant of rights due to them breaching warranties with ESPN.
ACC Statement on Friday
“Florida State’s decision to file action against the Conference is 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. 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.
“As a league, we are proud of the successes of our student-athletes and that the ACC has won the most NCAA National Championships over the past two and half years while also achieving the highest graduation success and academic performance rates among all FBS conferences, so it is especially disappointing that FSU would choose to pursue this unprecedented and overreaching approach.
“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 and the Conference’s legal counsel will vigorously enforce the agreement in the best interests of the ACC’s current and incoming members.”
What a bunch of self absorbed idiots.
The ACC should kick them out and bring in Tulane.
Is one of FSU’s lawyers, the governor? FSU picked a home “court”, don’t expect that to stick. Maybe they can join the PAC-2 and have a home and home and home series every year.
FSU are a bunch of whiners. I can’t wait to watch Georgia destroy them in the bowl game.
Bye
Cracks me up, constantly bitching about not being able to compete while, at the same time, bitching about not making the college football playoffs.