‘Left no option’: FSU taking legal action against ACC over exit fee

Andrea Adelson, ESPN

• Senior WriterDec 22, 2023, 11:05 AM ET Close ACC reporter.
• Joined ESPN.com in 2010.
• Graduate of the University of Florida.The Florida State board of trustees voted unanimously Friday to take legal action against the ACC to challenge the legality of the league’s grant of rights and its $130 million withdrawal cost, an essential initial step to outline the school’s future and possible exit from the conference.The 38-page lawsuit, submitted in Leon County Circuit Court in Tallahassee,

  Florida, seeks a declaratory judgment versus the ACC to void the grant of rights and withdrawal cost as “unreasonable restraints of sell the state of Florida and not enforceable in their entirety against Florida State.” The university alleges “chronic fiduciary mismanagement and bad faith”in the method the ACC has actually managed its multimedia rights contracts and weakened its members’revenue opportunities. Florida State is also implicating the ACC of breach of contract and failure to carry out.”I think this board has been left no choice but to challenge the authenticity of the ACC grant of rights and its severe withdrawal penalties,”board chair Peter Collins stated.” None of us like being in this position. However, I think that we have exhausted all possible solutions within the conference and we must do what we believe is finest for Florida State not just in the short term however in the long term. “Florida State is now in unprecedented territory. No school has ever challenged a grant of rights in court.ACC officials have formerly used the word” ironclad “to explain the file, which has been the operating assumption from leagues across the nation– thinking the language in the document is so stiff it would avoid schools from leaving. But since no school has ever challenged the document in court, no one in fact knows whether it is, certainly, as ironclad as described.Editor’s Picks ACC commissioner Jim Phillips and Virginia president Jim Ryan, chair of the ACC board of directors, lamented Florida State’s

“unprecedented and overreaching approach”in a declaration.”Florida State’s decision to submit action against the Conference remains in direct dispute with their longstanding commitments and is a clear infraction of their legal dedications to the other members of the Conference,”the statement said.” All ACC members, including Florida State, willingly and purposefully re-signed the current Grant of Rights in 2016, which is entirely enforceable and binding through 2036. Each university has actually benefited from this agreement, receiving countless dollars in revenue and neither Florida State nor any other institution, has actually ever challenged its legitimacy.”The ACC also made a preemptive legal maneuver Thursday by filing a grievance for declaratory judgment against the Florida State board of trustees in state court in Mecklenburg County, North Carolina.At problem in Florida State’s complaint is what the school has explained over the past year as not just growing earnings spaces with the SEC and Big 10, anticipated to be $30 million each year per school, but disagreements over the method media rights cash must be dispersed within the ACC. Although the ACC just recently embraced success initiatives to reward groups for performance in football and guys’s and ladies’s basketball, Florida State has promoted tv cash to be dispersed unevenly based on media value to the conference. The ACC has actually refused.”This is not where I would choose to have actually wound up,” university president Richard McCullough stated.” I would prefer a different path, but I feel in numerous ways we’ve tired all other alternatives, and you can’t wish and hope that somehow they’ll get repaired

.”What took place Friday did not emerge over the past three weeks. Although the College Football Playoff snub earlier this month was seen as a last straw, Florida State’s legal counsel and an outdoors law firm have actually been examining the grant of rights for well over a year and started dealing with legal

arguments this summer season– stimulated forward after an August board of trustees meeting in which trustees demanded a plan of action by the following August.At that conference, Florida State made it clear it would think about leaving the ACC over its concerns.”Our actions today are less about the occasions of the last two weeks and far more about the actions of the ACC management over the previous 10 years and what challenges FSU in the ACC over the next 13 years,”Collins said.Florida State and all other ACC members signed a grant of rights with the league that goes through 2036, the length of its television agreement with ESPN.

The grant of rights provides the conference control over its media rights– including television revenue and home game broadcasts in all sports. In addition, any school that wishes to leave the ACC would need to pay an exit charge of

three times the league’s operating budget, or roughly$130 million.All told, the university approximates the total exit charge, including the loss of tv earnings, would be$572 million.David Ashburn, managing investor of Greenberg Traurig in Tallahassee, the outdoors law firm dealing with the case, strolled trustees through the suit during Friday’s meeting, detailing what the university believes is fiduciary mismanagement in the method the ACC has actually handled its media rights contracts with ESPN

and withdrawal penalties going back to 2010. The university declares that when the ACC reached an extension of its media rights with ESPN in

2016, the agreement gave the network a unilateral option to extend the deal an additional nine years beyond its expiration on June 30, 2027, or until 2036. Florida State also declares the ACC told its members that ESPN had issued an ultimatum: Unless the members extended the grant of rights from 2027 to 2036, ESPN would not participate in additional media arrangements with the

conference. FSU stated it accepted the grant of rights extension based on this representation.In addition, the university declares the 2016 extension secured league members to the exact same rates worked out in the previous 2012 multimedia rights agreement with ESPN. That left league members with the exact same income package for 24 years– all while other conferences had the ability to renegotiate their contracts and increase their revenue.If a judge grants declaratory judgment in favor of Florida State, the school would have the ability to leave the ACC without penalty. The departure would need to be effective Aug. 14, 2023, backdated to ensure Florida State could leave the conference in the event of new bylaws being taken into place. If the judge declines to issue a judgment in favor of either side, Florida State and the ACC might be sent to mediation to negotiate a resolution.On Thursday, the ACC asked a judge to state that the grant of rights signed by Florida State in 2013 and 2016″is valid and enforceable”and will stay so through June 30, 2036.”Florida State made a purposeful option to transfer its media rights to the ACC for a particular term in order to work out different and increasingly profitable multi-media agreements with ESPN, knowing that the transfer of those rights for a particular term would continue even if it ceased to be a Member Organization or chose to withdraw from the Conference,”the ACC’s

problem said.The conference argued in its complaint that Florida State goes through the laws of North Carolina because of “its continuous and organized subscription and governance activities within the ACC.” ESPN’s Mark Schlabach contributed to this report.