Florida State University initiates legal challenge against Atlantic Coast Conference

by | Dec 22, 2023

  • Florida State University (FSU) filed a lawsuit against the Atlantic Coast Conference (ACC) on Friday, alleging mismanagement of media rights and imposing excessive exit fees.
  • The lawsuit specifically challenges the ACC’s Grant of Rights provision and associated exit penalties, which total more than $500 million.
  • FSU posits that these conditions, which also require forfeiture of media rights through 2036 for leaving the conference, are restrictive and potentially breach contractual obligations.
  • The university’s decision to pursue legal action follows its exclusion from the College Football Playoffs despite an undefeated season.

Florida State University (FSU) initiated legal action against the Atlantic Coast Conference (ACC) on Friday, citing mismanagement of media rights and imposing prohibitively high exit fees.

The lawsuit, filed by the FSU Board of Trustees in a Leon County Circuit Court, represents the first major challenge to the ACC’s operational practices and could have wide-reaching implications in collegiate athletics.

The crux of FSU’s contention is predicated upon allegations that the ACC has failed to generate substantial revenues and maximize athletic opportunities for its member schools. In the lawsuit, the university asserted that the ACC’s handling of its media rights agreement with ESPN has placed its members at a financial disadvantage compared to other major conferences.

This gap in revenue and prestige, FSU argues, is growing and negatively impacting its competitiveness, particularly in elite athletic championships like the College Football Playoff.

Through the lawsuit, FSU is seeking to overturn the ACC’s exit penalties, which totals more than $500 million, and secure more autonomy in its finances.

“Through chronic fiduciary mismanagement and bad faith, the ACC has persistently undermined its members’ revenue opportunities” reads the filing. “Those failures have, by design, coalesced with the ACC’s efforts to effectively deprive ACC members of their fundamental right to withdraw, through the combination of an unconscionable Grant of Rights provision and a prohibitive Withdrawal Penalty that are unparalleled in the history of intercollegiate athletics.”

The lawsuit specifically challenges the ACC’s Grant of Rights provision, which requires members to forfeit their media rights through 2036 should they leave the conference. This stipulation, combined with withdrawal fees totaling $572 million, is argued by FSU to be a restraint of trade and a breach of contract.

“The punitive instruments of the ACC violate [state statute] because they prevent Florida State from competing in the marketplace to obtain the best economic terms for its athletic media rights, its student-athletes, and its athletics programs in the relevant market,” the lawsuit continued.

Concerns regarding the Atlantic Coast Conference’s (ACC) management of its media rights also arose in the challenge, particularly focusing on the extension of its agreement with ESPN through 2036 without securing additional financial benefits.

FSU posits that the agreement effectively placed the ACC at a competitive disadvantage relative to other major conferences. By failing to negotiate for better terms or increased compensation in the extended agreement, the ACC, according to the university, potentially compromised its financial viability and the ability to keep pace with the revenue streams reported by its counterparts.

FSU additionally raises objections to the ACC’s strategy of expanding its membership by adding The University of California, Berkeley; Southern Methodist University; and Stanford University. The lawsuit argues that the inclusion of these institutions, which FSU perceives as having weaker media rights values, could adversely impact the ACC’s ability to negotiate more lucrative media contracts.

“This filing became necessary due to an unwillingness by the ACC and some of our fellow conference members to seriously consider remedies for this situation,” FSU Athletic Director Michael Alford said on Friday. “It is with great regret that we enter this phase, but it has become clear that we have no other recourse.”

In 2011, the ACC established an initial media rights agreement with ESPN, which was subsequently renegotiated in 2012 to include ‘Tier I’ cash payments for nationally broadcast football games through 2027, with ACC members each receiving approximately $33 million annually.

However, instead of seeking better terms in 2027, FSU maintains, the ACC granted ESPN the right to extend their contract until 2036 without additional compensation provisions, concurrent to ESPN securing shorter, more valuable deals with other conferences, leading to a significant revenue gap.

“The ACC has negotiated itself into a self-described ‘existential crisis,’ rendered itself fiscally unstable, and substantially undermined its members’ capacity to compete at the elite level,” the lawsuit says. “In doing so, the ACC violated the contractual, fiduciary, and legal duties it owed its members.”

The filing comes on the heels of FSU’s exclusion from the College Football Playoffs, despite finishing the season undefeated. The Seminoles’ omission sparked controversy surrounding perceived discrepancies in the playoff selection process and expedited the desire for university leaders to exit the ACC, which has experienced a proliferating decline in recent years.


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