Clemson vs. ACC exit costs suit explained

• David Hale, ESPN Staff WriterMar 19, 2024, 02:11 PM ET Close ACC reporter.Joined ESPN in 2012.
• Graduate of the University of Delaware.Clemson ended up being the

second school to take legal action against the ACC in state court in an effort to extricate itself from onerous exit charges and a grant of rights that runs for another 12 years.The lawsuit, filed in Pickens County, South Carolina, on Tuesday, follows a similar plan to the one submitted by Florida State in Tallahassee in December. Both objective to challenge the accuracy of the league’s grant of rights, while the ACC’s countersuit in North Carolina looks to promote the agreement.So, what does Clemson’s newest legal maneuver mean for the ACC and the future of adjustment? ESPN addressed a few of the crucial questions.Read more about the FSU lawsuit here. Why did Clemson submit its claim now?Whereas Florida State foreshadowed its lawsuit for months and revealed it in grand style

in late December 2023, Clemson’s efforts towards a potential exit have mostly taken place in the shadows. However make no error, Clemson has actually been essentially in lockstep with Florida State’s believing all along, and with the current announcement that future playoff shares to the ACC would be nearly half that of the SEC and Big 10, it was yet another domino to fall in Clemson’s journey to this point. Florida State and Clemson understand that discovering an exit method from the ACC will not occur overnight, so both suits are largely about getting a running start towards the door.What exactly is Clemson arguing?Clemson is basically making the same argument as Florida State, which comes down to declaring the punitive damages included with the ACC’s

exit fee(3 times the ACC’s operating budget)are expensive and unreasonable, and the grant of rights(which gives the ACC ownership of each member’s TV media rights through 2036 )unjustly limits Clemson’s right to maximize its brand value.Editor’s Picks 1 Associated According to the claim, Clemson declares the ACC’s exit fee and

grant of rights

“prevents Clemson’s capability to meaningfully explore its alternatives regarding conference membership, to work out alternative revenue-sharing proposals among ACC members, and to get full value for its future media rights. “In other words, Clemson is recommending that a grant of rights is unenforceable and prohibited, a claim that could potentially have massive causal sequences throughout the college sports landscape if a judge concurred. But offered the rapidly changing landscape of college sports, Clemson argues restricting complimentary movement among schools could be a prospective death sentence for its program. “In this litigation, Clemson seeks confirmation of the plain language discovered in the Grant of Rights agreements and the associated media contracts between the ACC and ESPN– that these arrangements, when checked out together, clearly state that Clemson controls its media rights for games played if it is no longer a member of the ACC,”a declaration from Clemson checked out.”Clemson also seeks a judgment regarding the unenforceability of the serious penalty the ACC is seeking to impose upon exiting members and verification that it does not owe a fiduciary duty to the conference as alleged by the ACC. “The ACC’s position regarding the Grant of Rights, the exit charge, and commitments owed by members to the conference, as detailed in its public declarations and other court filings, leaves Clemson with no option but to move on with this lawsuit.” Clemson has not given notice that it is leaving the ACC and remains a member of the conference. “What is a grant of rights again? And why is it so important?The grant of rights is a legal document signed by each member of the ACC that transfers ownership of media rights from the school to the conference. What this implies is that the ACC, not Clemson– or any other member school– owns the rights to broadcasts of games. Schools signed this

in 2013 as a reaction to the departure of Maryland to the Big 10, under the rationale that the grant of rights serves as an insurance plan that would avoid anyone from leaving the league throughout the duration of the arrangement, which in this case is through 2036, because a school without television revenue would have little worth to any other conference or sufficient profits to stand as an independent.In other adjustment circumstances, schools either suffered the grant of rights(the Pac-12’s agreement ends in summer season 2024 )or paid a hefty buyout to leave early(Texas and Oklahoma paid$50 million each to the Big 12 to leave that agreement simply one year early ).

For Florida State, Clemson or any other school looking to leave the ACC, the dollars and period are much more enforcing. With 12 seasons remaining on the existing deal after this school year, a member would require to either wait far longer than they feel is acceptable or pay an almost impossible buyout to get their media rights back. And this remains in addition to the exit fee.Hence, alternative No. 3: Litigate and intend to discover a legal structure for leaving quicker and at a lower cost.Clemson, nevertheless, is alleging the grant of rights just uses to groups in the league and would not bring beyond a school leaving. This, naturally, is the precise opposite of what the grant of rights

was developed to do, however it’s a fascinating legal technique given the school’s reading of its TV arrangement and

grant of rights, which is redacted in public disclosures.Should we expect more schools to follow in Clemson’s and FSU’s steps?There’s a real question about why Clemson would do this at all if Florida State was willing to be the canary in the coal mine. While many other Advertisements– both inside the ACC and out– have stated they’re acutely watching FSU’s efforts to leave the grant of rights, they have actually all sounded more than delighted to let the Seminoles take the heat and, ideally, offer the plan for an exit strategy.Clemson’s claim suggests that the school sees value in assisting set that plan and, in turn, potentially being among the first out the door. If both FSU and Clemson leave the league, others would surely follow– including, maybe, North Carolina, Virginia, Miami and NC State.But there are likewise two huge issues with any departure scenario.First is the money. These suits are efficiently a referendum on the cost of departure.

That dollar figure, whatever it ultimately is, could be excessively high for schools seeking to leave. On the other hand, the high expense could supply an incentive to stay if Clemson and FSU are forced to compose sizable checks that would then be dispersed among the remaining league members.On Feb. 29, the University of North Carolina Board of Governors approved a policy modification that might make it more difficult for public state schools– consisting of North Carolina and NC State– to jump from one conference to another. Under the new rules, any chancellor of a school wishing to change leagues should supply the system president with advance notice and submit a monetary plan. The president has the authority to authorize or turn down the move, and he needs to alert the Board of Governors

, which might vote on the conference shift as well.The second concern is where schools might land. Numerous athletics directors who spoke with ESPN said they did not think the SEC or Big Ten were eager to expand once again at the minute, and even the Big 10’s latest additions– Washington and Oregon– came in at a portion of full value. Leaving the ACC is something. Having a home later is another.What happens now?Clemson’s claim was filed in South Carolina, making it the 3rd various state where some form of lawsuits is ongoing about the ACC’s grant of rights. Choosing who has jurisdiction is the next huge action, and even that is likely months away from a ruling. When any judgment on venue is made, there are likely to be appeals of that judgment, too. Simply put, it’s unlikely we’ll discover anything about the enforceability of the ACC’s exit fees and grant of rights at any time quickly.