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Florida State Trustees sue ACC for mismanaging media rights: Seminoles Begin process to exit ACC

Florida State Seminole Pregame
'DSCO2152' Photo Credit Matthew Stinson via Flickr

This morning, the Board of Trustees for Florida State University held an emergency meeting to determine the next steps in the process of leaving the ACC. Beginning this past off-season, the Seminoles were one of a handful of ACC schools that expressed the desire to increase media revenue for member schools to compete with the revenue generated and dispersed to member schools in the SEC and Big 10 Conferences respectively. The result was the first step in a longer process, a unanimous decision to file a lawsuit against the ACC Conference for what is being described as a failure to fulfill the obligations to "generate substantial revenues" and "maximize athletic opportunities" for the ACC members. The Seminoles begin the process of exiting the ACC, let's take a look at what we know so far.

The Florida State Dilemma: Suit vs Suit

As a bit of background in this developing story, in 2016, the ACC and its member schools entered into a Grant of Rights for the conference to pursue media deals for the conference and the member schools. As a result, the ACC entered into an agreement with ESPN on media and associated revenue. That in part led to the creation of the ACC Network for the conference. The issue is that although the guaranteed television revenue is only through the 2027 season, the Grant of Rights runs through 2036. Currently, the ACC generates roughly $30 million per team which is currently fourth among the Power 4 conferences. That gap is expected to only increase in the coming seasons with new deals for the Big 10 and SEC Conferences respectively. As part of the Grant of Rights from the original 2012 agreement and carried into the 2016 amended version it calls for increasingly stiffer penalties for member schools that want to withdraw from the conference.

The ACC Conference did file a lawsuit at Florida State in North Carolina claiming that the university was prohibited from challenging the grant of rights deal that is currently in place. The conference cites that since Florida State and the other members of the conference willingly agreed, the right to challenge the agreement is subsequently waived. With both the ACC and Florida State firing lawsuits, the opening salvos have placed the fate of FSU to leave as well as the feasibility of the ACC remaining a conference in the hands of the respective judges overseeing the two lawsuits.

Florida State claims in its suit, that the ACC has mishandled negotiations with ESPN and left money on the table that would have benefitted its members to be positioned better in athletics (be more competitive) and appear in elite championships as well as put the schools at a disadvantage in educational advancement. The suit also claims that the withdrawal penalties are so severe that they prevent members from exploring their right to withdraw from the conference. The penalty for withdrawal from the conference has only been elevated since 2013. It went from $52 million to $234 million from 2012-2013. Currently, the release from the Grant of Rights and withdrawal from the ACC would incur a penalty of $572 million. Florida State President, Richard McCullough stated "I fully support the Board's decision to take this legal action against the ACC. It is becoming painfully apparent that Florida State's athletic ambitions and institutional priorities are no longer served by the ACC's leadership."

The Seminole Solution(?)

With the unheard-of length of the Grant of Rights being 20 years ending in 2036 and the guaranteed media rights ending in 2027, it certainly raises a question of why the conference would accept such a media deal. With more questions than answers currently and not wanting to jump to any conclusions, we will be waiting to see how both suits play out in the courts. I for one will be looking to see what the explanation of the media deal is for the ACC. The conference should explain why they believed the best action for their conference and its members was to enter into an agreement that was not able to be renegotiated at all.

Now that this has entered the beginning stages of the process with the lawsuits, the process has started. It is a question of when Florida State leaves more so than a question of if they leave. This story is developing, to say the least. Stay tuned to College Football Dawgs and the Dawgs Media Network as this story continues to develop.


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