Two weeks ago, Florida State president Rick McCullough issued a threat that was not very veiled. Speaking during a meeting of the Seminoles’ Board of Trustees on Aug. 2, he said the following:
“I believe that FSU will have to, at some point, consider very seriously leaving the ACC, unless there were a radical change to the revenue distribution.”
If they didn’t before that moment, everyone in college sports — both within the ACC and outside of it — now knows that Florida State is unhappy in its current conference. But what can Seminoles leaders do about it? In the days after that board meeting, Arizona, Arizona State and Utah followed Colorado out of the Pac-12 while Oregon and Washington decamped for the Big Ten. By the middle of this week, we’ll know whether the ACC has emerged from this year’s round of realignment rumors unscathed. And it all hinges on what happens in Tallahassee.
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FSU’s ACC unrest and the significance of Aug. 15
The ACC shares the revenue it brings in from its media rights deal equally with all members, and its deal with ESPN runs through 2036. By the end of the decade, ACC schools could be bringing in as much as $30 million less than their peers in the Big Ten and the SEC, the two richest leagues in college sports. And ACC schools have no real opportunities over the next 13 years to renegotiate with ESPN or anyone else to bump up these payouts.
So for the next decade-plus, FSU is set for the same payout from the conference as Boston College, despite vast differences in the two athletic departments’ investment in revenue-generating sports and large gaps in the number of eyeballs they draw for football games. With many CFP hopefuls elsewhere set to draw escalating revenue payouts from their league’s TV deals, that dynamic has led to some angst.
As Florida State athletic director Michael Alford put it in February, “At the end of the day, for Florida State to compete nationally, something has to change moving forward.”
This brings us to an important date on the calendar for all ACC members — and especially FSU and Clemson, the two schools most eager to improve their individual financial situations.
Any ACC school would need to give notice to the conference that it was departing by Aug. 15 in order to compete elsewhere the following academic year. So, if FSU were to tell the ACC it was leaving by Tuesday, it would be able to compete in another league, or as an independent, for the 2024-25 season.
But the formal decision to leave the ACC is just the first step. There’s a $120 million exit fee involved, plus whatever legal battle would follow between the league and the school trying to get out of a grant of rights that stretches until 2036. That grant of rights means the ACC owns the broadcast rights of every home game of each member school for the next 13 seasons.
This has led to a fascinating dynamic. You’ve got a disgruntled ACC member with deep pockets that wants to bet on itself, believing it brings enough value to entice the Big Ten or SEC. But Florida State would have to jump, this week or in a future year, without knowing its landing spot or the exact cost of getting its TV rights back. Though lawyers have educated guesses, no one has any guarantees. And even if the Big Ten and/or SEC are interested, those leagues have to be careful to avoid being dragged into any legal fight. The length of such a legal battle, and whether or not it would impact the Seminoles’ football season as it unfolds, is unknown.
A number of ACC schools have had lawyers examine the grant of rights, and no school has challenged it yet. Some legal experts have described the document as “ironclad.” As Florida State has discussed its options in recent weeks, attention has centered on the school’s financial support for athletics. In an unprecedented move for a public university, FSU is working with JPMorgan Chase to raise capital from institutional investors, and private equity firm Sixth Street is involved in the discussions, as first reported by Sportico and confirmed by The Athletic.
FSU boosters and trustees have not seemed outwardly concerned about the potential costs of breaking the ACC’s grant of rights.
“That’s the least of my worries based on what we know,” FSU board chair Peter Collins said on Warchant TV. “We understand it. We have gotten a lot of counsel on that document. That will not be the document that keeps us from taking action. And I’ll leave it at that.”
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What could happen this week
The most likely outcome is that Tuesday arrives and the Seminoles do nothing, league sources have told The Athletic. FSU would need 24 hours’ notice to call another board meeting, and that hasn’t happened. Time is running out to get everything in place for an ACC exit announcement for next year. Leaving the ACC is still a move that brings with it a massive amount of risk, and although board members and FSU leadership don’t want to let another year pass with a widening gap, they also have to be smart. One trustee suggested earlier this month that FSU give itself a year to figure out its exit strategy from the ACC. That could be the best option right now.
But the ripple effects of a potential FSU departure are already being felt. One of the most compelling reasons for the ACC to consider adding Stanford, Cal and perhaps even SMU was the strategy of adding reinforcements before they’re needed, backfilling in advance in case FSU, Clemson or anyone else ends up leaving in the coming years. Not surprisingly, Florida State and Clemson are among the four schools opposed to these additions, believing that they do not add significant value to the ACC — only logistical and travel headaches. Twelve of the 15 ACC members need to support expansion before it can happen, and right now the league is one vote short. Most of those firm “yes” votes belong to schools that wouldn’t have other options in another Power 5 reorganization and would want to fortify the ACC now.
Don’t be surprised if the end of this week arrives and nothing has changed, with FSU staying put and the ACC opting not to expand westward. Internal angst in this conference is nothing new, although FSU’s peers seem to be getting sick of the Seminoles’ complaints.
“If they want to leave, that’s gonna be their choice, but there are certain obligations that they do have,” North Carolina athletic director Cunningham told 99.9 The Fan earlier this month. “We have an exit fee and we have a grant of rights. I believe that the ACC is a great league. It’s been a great league for a long time. Their frustration about the money, everyone would like to have more money and everyone would like to win more. …
“Quite frankly, I don’t think it’s good for our league for them to be out there barking like that, and I’d rather see them, you know, be a good member of the league and support the league. And if they have to make a decision then so be it. Pay for the exit fee, wait for your grant of rights that you’ve given, and then in 2036, when those rights return to you, do whatever you want.”
This much discontent may not make it all the way to 2036. But the next twists and turns remain to be seen.
(Photo: Chris Graythen / Getty Images)
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