Florida State files legal complaint against ACC, could be precursor to leaving league

After spending the last year voicing discontent with the ACC, Florida State has now taken legal action, which could be a precursor to ultimately leaving the league.

The university’s Board of Trustees voted unanimously Friday to file a legal complaint in Tallahassee circuit court against the ACC, in which it alleges the ACC’s grant-of-rights agreement and associated withdrawal penalties violate Florida antitrust law, represent an unenforceable penalty and that the ACC committed breach of contract with respect to its fiduciary duties.

In the highly anticipated, hastily scheduled Board of Trustees meeting, Florida State attorney David Ashburn notably put a figure on how much he believes it would cost the school to break the grant of rights and leave the league: $572 million.

“Today we have reached a crossroads in our relationship with the ACC,” Florida State BOT Chair Peter Collins said. “I believe this board has been left no choice but to challenge the legitimacy of the ACC grant of rights and its severe withdrawal penalties.”

FSU Board of Trustees Meeting | FSU Football and the ACC | Warchant LIVE | #FSU https://t.co/83E9ZucmKO

— Warchant.com (@Warchant) December 22, 2023

Collins said the decision has less to do with the recent perceived snub of Florida State in the College Football Playoff and much more to do with the actions of the leadership within the ACC.

Florida State President Richard McCullough said, “I feel that we have in many ways exhausted all our options.”

The ACC actually beat FSU to the legal punch, filing a lawsuit Thursday in Mecklenburg County, North Carolina, against FSU’s Board of Trustees. The suit alleges FSU breached its contractual obligations and seeks a court ruling that establishes the grant of rights as “valid and enforceable.”

In a statement released Friday after FSU filed its complaint, the ACC said Florida State’s decision to file legal action against the league is in “direct conflict” with FSU’s longstanding obligations and is a “clear violation” of their legal commitments to other ACC members.

“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,” the statement read. “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 …

“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.” 

In the 38-page complaint filed in Leon County circuit court, FSU alleges it has been damaged by “chronic fiduciary mismanagement and bad faith.” The complaint seeks a declaratory judgment that could enable the school to leave the ACC without having to pay the $572 million in penalty fees.

FSU would owe the league $130 million in addition to $442 million in media rights and broadcast fees if it attempts to leave the ACC, according to the complaint. The Seminoles claim that the ACC’s “punishments are unenforceable under Florida law as unreasonable restraint of trade.”

The development carries enormous significance for several reasons, including the fact that it highlights how, in many ways, college sports has boiled down to a world of two super conferences – the SEC and Big Ten – ruling the ecosystem, at least in terms of revenue.

And membership in one of those leagues is as coveted as it is lucrative.

It also highlights the unusual circumstances surrounding the ACC’s GOR. Not only is the agreement incredibly long, expiring in 2036, but Florida State does not even have a copy of the agreement.

A grant of rights agreement gives conferences the right to broadcast all member schools’ home games for the duration of the media rights deal. In the ACC’s case, the GOR binds the league, schools and broadcast partners until the rights deal with ESPN expires in 2036. 

Interestingly, the complaint asserts, the media rights deal actually expires in 2027 unless ESPN chooses to exercise its “unilateral option” through 2036.

Other ACC schools have examined the document and any wiggle room that may exist if they want to jump to another league. One longtime ACC official told On3 over the summer that the league’s GOR is “ironclad.” Another prominent source with deep ACC ties also stressed that the league believes the grant of rights agreement is virtually unbreakable.

Was CFP snub tipping point for Florida State?

The move to file the complaint comes just weeks after Florida State became the first-ever undefeated Power Five school to be excluded from the four-team College Football Playoff. The perceived snub enraged supporters throughout Florida State’s ecosystem and provided fodder for those who believe the Seminoles’ conference affiliation held it back.

However, the CFP exclusion may have been merely the tipping point. The angst has been simmering, if not boiling over, for about a year.

The Seminoles have watched the revenue gap between the ACC and two super conferences grow ever larger – with even a greater disparity in dollars on the horizon. In the coming years, the SEC and Big Ten are expected to distribute at least $30 million more annually to member schools than what Florida State receives in the ACC.

At a much-publicized meeting in August, Board of Trustees member Drew Weatherford, the former Florida State quarterback, said bluntly, “It’s not a matter of if we leave [the ACC], in my opinion. It’s a matter of who and when we leave.” And McCullough at the same meeting said the school would “very seriously” explore leaving the conference absent significant changes to the ACC’s revenue distribution model.

In the meantime, Florida State has watched the nation’s two super conferences, the SEC and Big Ten, continue to add marquee brands and boatloads of broadcast revenue dollars.

In 2024, the SEC will add Texas and Oklahoma, while the Big Ten will add USC, UCLA, Oregon and Washington. On the revenue front, the Seminoles also know that schools in those leagues will virtually lap the field with schools from the ACC. FSU could fall behind those schools by some $30 million annually in revenue. 

This summer’s realignment madness only highlighted the fissure that exists within the ACC. While the league garnered barely enough membership support to green-light the geographically challenged additions of Stanford, Cal and SMU. FSU voted against the moves, as did Clemson and North Carolina.

In the complaint, FSU asserts the ACC expanded this summer as a proactive move to offset any potential departures by FSU or other schools.

“The additions by the ACC were in fact self-serving and defensive as opposed to strategic,” the complaint states, “in that the addition of these three schools by the ACC was designed to insulate the ACC from falling below the 15 member critical mass required by the 2016 ESPN agreements should any members of the conference exercise their right to exit.”

Neither the SEC nor the Big Ten has signaled further appetite to expand in the near future. But that could change.

FSU needs to notify the ACC by Aug. 15 if it plans to play in another league in 2025.