Florida State files suit against ACC over exit fee and grant of rights

The Florida State Board of Trustees met Friday morning and voted unanimously to file suit against the Atlantic Coast Conference, challenging the league’s grant of rights and its withdrawal fee, a first step toward the school’s possible departure from the conference. 

The suit is in response to “years of mismanagement that has left its member schools trapped in a deteriorating multi-media rights agreement while preventing them from joining other conferences because of ‘draconian’ withdrawal penalties,” according to the FSU press release. 

It details how the “ACC’s mishandling of negotiations with ESPN has deprived members of tens of millions in annual revenues and put them behind other Power Four schools in the competition for educational advancement and to appear in elite athletic championships.”

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Florida State and other members of the ACC signed a grant of rights through 2036, which gives the conference control over the media rights. 

In the 38-page suit, filed in Leon County Circuit Court, FSU challenged the legality of withdrawal penalties of at least $572 million in fees and forfeited revenues.  

“The underperformance by the ACC has ramped up dramatically in just the last few years,” FSU Board of Trustees Chairman Peter Collins said in the press release “The ACC has also unfairly — and we believe illegally — sought to prevent members from exploring their fundamental right to withdraw by threatening to impose an astounding and pernicious half-billion-dollar penalty. It’s simply unconscionable.”

The lawsuit states that the “stunning exclusion of the ACC’s undefeated football champion from the 2023-2024 College Football Playoff (“CFP”) in deference to two one-loss teams from two competing Power Four conferences crystalized the years of failures by the ACC to fulfill its most fundamental commitments to FLORIDA STATE and its members.”

The ACC responded Friday, saying they are confident the Grant of Rights “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.” 

“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,” reads a statement from ACC commissioner Jim Phillips and Chair of ACC Board of Directors Jim Ryan. 

Conversations over potentially leaving the conference began in August when Florida State President Richard McCullough said remaining in the ACC “under the current situation” would be difficult. 

“Our goal would be to continue to stay in the ACC, but staying in the ACC under the current situation is hard for us to figure out how we remain competitive unless there were a major change in the revenue distribution within the conference,” McCullough said, per ESPN. “That has not happened. Those discussions are ongoing at all times.

“FSU helps to drive value and will drive value for any partner, but we have spent a year trying to understand how we might fix the issue. There are no easy fixes to this challenge, but a group of us have spent literally a year. We’ve explored every possible option that you can imagine. The issue at hand is what can we do to allow ourselves to be competitive in football and get what I think is the revenue we deserve?

“This continues to be a very difficult issue. There’s a lot going on in the world of conference realignment. My current assessment of the situation after very deep analysis is I believe FSU will have to at some point consider very seriously leaving the ACC unless there were a radical change to the revenue distribution.”

The lawsuit accuses the ACC of restraint of trade, breach of contract and failure to perform.