Florida State took its first formal step in seeking to leave the Atlantic Coast Conference on Friday morning filing a complaint against the conference, challenging the league's grant of rights and its withdrawal penalties.
The Seminoles, one of the conference's premier football programs, have been public about their desire to leave the ACC for months, if not longer, as the conference has fallen behind the Big Ten and the Southeastern Conference in revenue distribution driven by massive television contracts.
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"This is certainly not where I would prefer to have ended up," Florida State President Richard McCullough told the board. "I think that I would prefer a different pathway. I feel that we have in many ways exhausted all our options."
But the school faces significant financial penalties for withdrawing, a figure the school estimated at $572 million in exit fees and the forfeiture of media rights. Its counsel argued that figure is "an unenforceable penalty."
"This blows far past any notion of harm to the conference," attorney David Ashburn told the board.
The complaint was filed Friday in Leon County, Florida.
"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," ACC Commissioner Jim Phillips and Virginia President Jim Ryan, chair of the ACC Board, said in a statement Friday.
"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."
The ACC filed a complaint against Florida State's Board of Trustees in Mecklenburg County on Thursday. The ACC is seeking a judgment that "the Grant of Rights signed by Florida State in 2013 and 2016 is valid and enforceable and that Florida State is ... stopped from challenging the validity or enforceability of the Grant of Rights."
The complaint also asks that it be heard in North Carolina, not Florida.
What the complaint says
The timing of Friday's meeting was no doubt influenced by undefeated Florida State being left out of the four-team College Football Playoff in favor of one-loss Alabama from the SEC. The playoff committee, chaired by NC State athletic director Boo Corrigan, pointed to the late-season injury to star quarterback Jordan Travis as the reason to leave the Seminoles out.
Board members insisted it was not about the CFP snub, but about the long-term financial viability of the Seminoles' athletic program.
"Our actions today are less about the events of the last two weeks and far more about the actions of the ACC leadership over the past 10 years," board chairman Peter Collins said. "And what confronts FSU and the ACC over the next 13 years."
But the complaint says that "the stunning exclusion of the ACC's undefeated football champion from the 2023-2024 College Football Playoff in deference to two one-loss teams from competing Power Four conferences crystalized the years of failures by the ACC to fulfill its most fundamental commitments to Florida State and its members."
Grant of Rights
The biggest impediment to Florida State leaving the league is the "grant of rights" agreement that all conference schools have signed. It confers to the ACC the media rights for all home games and it runs through 2036, a concession made to get the ESPN-backed ACC Network up and running.
“We are confident that the Grant of Rights, which has been honored by all other universities who signed similar agreements, 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," Phillips said in his statement.
ESPN owns all of the ACC's television rights with its latest agreement coming in 2016.
Ashburn, Florida State's outside counsel, told the board that ESPN has until February 2025 to exercise a nine-year extension from 2027 to 2036 on the ACC's television rights. That has not been previously known.
Ashburn said the Phillips gave ESPN an extension from 2021 to 2025 to exercise that option.
"The ACC and its members got nothing, no consideration, for agreeing to that additional time to exercise that what we believe to be harsh expansion," Ashburn said.
The current grant of rights contract is kept in Greensboro and has not been made public. WRAL previously obtained a copy of the 2013 agreement, which was updated in 2016.
Florida State's board members made repeated references to the hidden nature of the grant of rights as well as the league's agreement with ESPN.
Without the rights to their athletic events, a school would offer little to no value to another conference.
Other conference affiliation moves, including the demise of the Pac-12, has coincided with the end of grant of rights agreements.
No school has challenged the grant of rights, but Florida State is now poised to try to find a way out. The ACC's deal with ESPN runs through 2036, which at once gives the league stability but has allowed other leagues to soar past it in revenue.
With the SEC and Big Ten soon to be distributing $30 to $40 million more per school, Florida State felt it couldn't wait any longer, even as the ACC moves to a distribution model that will award schools for on-field success.
"It's a simple math problem," athletic director Michael Alford said.
College Football Playoff snub
No undefeated conference champion from a Power 5 league has ever been left out of the four-team College Football Playoff ... until this year.
The four teams that reached the playoff are either current members of the Big Ten (No. 1 Michigan) or SEC (No. 4 Alabama) or will be joining the Big Ten (No. 2 Washington) or SEC (No. 3 Texas) next year.
A 12-team playoff begins next season. And schools from the SEC and Big Ten are expected to garner many of the at-large bids available in the new format. The five highest-ranked conference champions will be assured of a spot in the playoff, virtually guaranteeing that the ACC champ will make it.
Florida State administrators and ACC Commissioner Jim Phillips were livid after the Seminoles were snubbed by the committee.
"The consequences of giving in to a narrative of the moment are destructive, far reaching, and permanent. Not just for Florida State, but college football as a whole," Alford said at the time.
What could it mean for the ACC?
If Florida State is able to find a way out of the grant of rights, it could open the door for other ACC schools to follow.
In addition to Florida State, North Carolina, Clemson and Miami could be sought after. Others like Virginia, NC State, Virginia Tech, Georgia Tech and/or Duke could have options as well.
But only schools that can expect an invite to the SEC or Big Ten are likely to move.
The possibility of departures is, perhaps, the main reason the ACC voted to add Cal, Stanford and SMU in September. Florida State, Clemson and UNC voted against the addition of the western members.
The ACC will have 18 all-sport members when the newcomers join in July. Notre Dame, a proponent of expansion, does not play football in the ACC.
"Some of the vibes and some of the conversations we had with individual institutions, it became apparent that we needed to try to do something financially as well as protect the fortress," Phillips said in October.
Could UNC, NC State split?
UNC's interim chancellor Lee Roberts, who starts next month, told WRAL that it is a trying time in college athletics.
The NCAA faces several lawsuits that could disrupt or destroy its model. NCAA President Charlie Baker has floated a proposal for schools to pay some athletes.
"It's a moment of extreme flux for college sports, possibly the greatest moment of instability that we've seen in a long time," Roberts said. "It's going to be important for the leadership at Carolina, not just me but everyone involved, to make sure that when the dust settles Carolina's better off."
North Carolina is the second most populous state that does not have a school in either the SEC or the Big Ten. New York is the top one. That could make the Tar Heels, a national brand with a stellar men's basketball program and terrific all-around athletic department, a top target despite an often average football program.
North Carolina would be a contiguous state for the SEC. It would be a key move to the South for the Big Ten, which has former ACC member Maryland as its southernmost program in the East.
The UNC System's Board of Governors recently considered a proposal to give it more say over conference realignment decisions. The proposal did not receive a committee vote in October.
The system, which oversees both UNC and NC State, could object if one school were to leave the ACC for a richer conference while harming the ACC and the other school that is left.