Florida State vs. the ACC

When Florida State didn't get into the final four-team College Football Playoff, they didn't take it well.  In fact, they said it was the "last straw" in their tenuous relationship with the ACC, and politicians even got involved (which, frankly, was just ridiculous).  Of course, they didn't help their argument at all when half the pissed off team opted out of playing in the Orange Bowl and they got blown out by 60, but that's a whole different conversation!

It's no secret that Florida State's been unhappy in the ACC for a while.  The relationship was strained prior to the Seminoles being left out of the CFP, which I'm not even sure they can actually blame the conference for.  However, for Florida State, it was the "last straw," and the school sued the ACC, claiming they had "no other choice."  Although, while the CFP situation certainly didn't help matters, it wasn't totally the impetus for the lawsuit.  It's something that was already brewing.

This all really goes back to the events set in motion by Texas and Oklahoma joining the SEC that accelerated rapidly over a few weeks last summer as the Pac-12 collapsed.  Florida State sat and watched as the SEC, Big Ten and Big 12 signed lucrative new TV deals that will make their member schools a significant amount of money annually.  They feel that will create a wide enough gap where the ACC teams will not be able to compete with them financially, especially since ACC revenues won't be able to grow because the conference's media rights deal is locked in through the 2035-36 school year.

As a part of the ACC's TV deal, every league member agreed to a "grant of rights," where the conference owns the broadcast rights to all home games.  Even if a school leaves the ACC, the conference retains those rights for the duration of the deal.  And all revenue is distributed equally among the 15 current ACC institutions.  When first signed in 2013 (and amended in 2016), it provided the conference with stability because it essentially locked each school into the ACC for that entire period.

The grant of rights has become the biggest source of contention.  No one is denying that the college sports landscape has changed dramatically since the ACC's original deal was signed.  And not only does Florida State feel like the ACC is being left behind with the SEC and Big Ten agreeing to much more lucrative deals, they also want a bigger piece of the pie.  They don't think it's fair that the revenue is split equally when Florida State football generates more of it than, for example, Boston College basketball.  Instead of equal distribution, they (along with a few other ACC members) want a model that's more proportional.

After everything went down with the Pac-12, Cal and Stanford were the most prestigious schools left in the conference.  Much like Cal and Stanford, the ACC didn't want to get left behind in the realignment shuffle.  So, things moved quickly on ACC expansion into California (with SMU coming along for the ride).  However, when it came time to vote, four schools were against adding Cal and Stanford, enough to prevent it from happening.  Florida State was one of them (along with Clemson, North Carolina and NC State).  NC State eventually changed its vote and the three schools were added, but Florida State remained firm in its opposition.

One of the things that helped change NC State's mind was the three schools agreeing to take a reduced share.  Cal and Stanford will only get a 30 percent share to start, with that amount increasing over time before eventually becoming a full share.  SMU will forego a share altogether for multiple years.  The money those schools are forfeiting will be pooled and go into a "success initiative," rewarding teams financially for their postseason performance in revenue sports (beyond the NCAA Tournament units they earn for the conference as a whole in men's basketball).  Florida State, you would figure, stands to benefit from the "success initiative."

That wasn't enough to satisfy Florida State's Board of Trustees, though, so they filed a lawsuit challenging the conference's grant of rights and exit fee.  Because of the grant of rights, it would cost Florida State $572 million to leave the ACC right now.  Florida State claims that the grant of rights violates antitrust law and is unenforceable.  They also accuse the ACC of breach of contract and believe that the league locked its members into an undervalued and overly long media rights agreement with ESPN.

In the ACC's countersuit, the league claims that Florida State is the one committing breach of contract.  Their main argument is that the exclusive grant of rights is not only binding, but Florida State willingly and knowingly re-signed it in 2016.  The Seminoles haven't just benefitted from the grant of rights agreement, they've never challenged its legitimacy.  Beyond that, the school's lawsuit violates its legal commitments to the other members of the conference.

Florida State issued its lawsuit in Florida, while the ACC filed its countersuit in North Carolina (the conference is based in Charlotte).  The conference amended its complaint earlier this week, adding that the school released confidential information by disclosing details of the TV contract in its Florida court filing.  They've sought a permanent injunction preventing Florida State from discussing the TV contract, while also seeking to bar Florida State from having any role in managing the league's affairs during the litigation.

Both sides are seeking a trial, so it seems like that's certainly where this is headed.  The question is where that trial will be.  Florida State would obviously prefer to have it be in Florida, while the ACC thinks it should be in North Carolina.  Either way, that trial will ultimately decide whether the grant in rights is legally binding or not and, by extension, whether Florida State can leave the ACC prior to its expiration in 2035-36.

No one can predict how this will go because the entire thing is unprecedented.  Every conference has a grant of rights, and no school has ever challenged one.  Florida State seems to know that, too, which is why their suit seems to be throwing everything it can at the fan hoping something will stick.  Really, all they're looking for is to get out of the grant of rights without having to pay the exorbitant exit fee.

You don't have to be a rocket scientist to see what Florida State's ultimate goal here is.  They want to join the SEC, but right now they can't.  So, they want a judge to say they're allowed to leave the ACC early so that they can.  Of course, there's no guarantee that an SEC invitation would be imminent.  But it's also safe to assume that's the likely scenario.  Those conversations have likely already taken place.

And the interest is almost certainly mutual.  Texas and Oklahoma will bring the SEC to 16 members.  The Big Ten will be at 18 after the addition of the four Pac-12 schools.  For that reason alone, you'd have to think the SEC will want to add two more, and Florida State is the most attractive potential option.  So, it's really more of a question when Florida State will leave the ACC for the SEC and who'll join them (Clemson?).

For the ACC, the concern is that this could open the floodgates.  The whole point of the grant of rights is to provide the conference and its members with stability.  If Florida State's able to challenge it successfully, what's to stop other league members leaving for greener pastures?  Then the ACC would conceivably suffer the same fate as the Pac-12.  Can you blame them for trying to avoid that exact scenario?  They didn't want it to come to this, but they also feel like they have no choice.  The ACC's doing this to prevent one disgruntled member from starting a chain reaction that results in the collapse of the entire conference.

I've gotta say, I'm on the ACC's side in this one.  Some of Florida State's points are right.  The college sports media rights landscape is completely different now than it was in 2016, and the ACC's contract isn't as good as the SEC's or Big Ten's.  But that doesn't change the fact they agreed to the deal back then.  They may not like it now, but that's the risk they took.  Willingly.  If they want out, it should cost them.