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'Something has to change.' FSU, ACC continues to fall behind in revenues
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- 'Something has to change.' FSU, ACC continues to fall behind in revenues
Michael Alford doesn't bluff.
When Florida State's director of athletics told the university's Board of Trustees Friday that "something has to change" when it comes to closing the growing gap between the Atlantic Coast Conference with other conferences, you better believe the Seminoles will help force change.
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"It had to be done," Alford said Friday night of his public and powerful message.
Strong words that reflect the situation's urgency and FSU's intentions.
FSU and the ACC are on the verge of falling further behind both the SEC and Big Ten in revenue by about $30 million per year when their respective new television contracts start (Big Ten in 2023, SEC in 2024).
Alford said Big Ten schools will receive about $80 million each year from their television contracts, SEC schools $72 million . He said FSU, when "you throw everything in," including the kitchen sink, receives around $42 million. FSU has calculated revenue projections to 2042 of various models.
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"We have to do something," Alford said.
"Because we are a brand, and we're a very important brand, and we drive the media value in this conference."
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There's a financial disconnect between FSU and ACC
That's where the financial disconnect starts.
FSU is not being fairly compensated by the ACC for its brand value.
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However, the ACC is locked into its television deal with ESPN through 2036. The league also has all schools by the shorthairs with a grant of rights (media payout and media rights) that lasts the length of the contract. This basically means any money FSU makes from a television broadcasts belongs to the ACC for another 13 years.
This narrative isn't new.
Alford pointed out the financial gap between FSU and its peers in the SEC and Big Ten will continue to grow as conferences exercise their flexibility around media rights. In three years, for example, FSU could trail rival Florida by an additional $90 million in revenues.
That's astonishing.
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Each conference, Alford stressed without pounding his fists on the table, will have the chance to return to the top market (some a couple of times) before the ACC deal expires.
Based on a market valuation Alford had commissioned, he said FSU contributes roughly 15% of the value in the ACC's media rights deal.
However, he pointed out the school only receives 7% of the distributions as one of 14 full members of the conference.
Alford said FSU and Clemson combine on around 24% of the value in the conference's media rights deals, and collect a combined 14%.
Currently, the ACC distributes its revenues equally among its members.
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At the league's recent winter meetings, leadership discussed an uneven revenue sharing model.
That simply means schools that invest and bring in the most television revenue will receiver larger distributions each year.
Needless to say, the prospect of less money for less successful ACC schools was a difficult sell to all 14 members.
"We're working with the conference, don't know if we're going to get there," Alford said of the model. "I know Jim Phillips and his staff are working very hard to provide solutions to this issue."
Clemson, which is in lockstep with FSU, also is pushing for change with revenue distribution within the ACC. Tigers Athletic Director Graham Neff told The Post and Courier (Charleston, S.C.) that "Yeah, I've been very active in those conversations within the league and continue to expect to take a leadership role in our desire for that to be a changed circumstance. Urgently."
Florida State University's future is at stake
Alford's verbal posturing Friday was planned because FSU's future is at stake.
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With conference expansion speculation continuing to swirl, Alford and FSU leadership are focusing on options and the ever-changing landscape.
Despite the Seminoles' football struggles prior to their 2022 breakout season under Mike Norvell, FSU is a powerful commodity.
Alford explained FSU represents 70% more television viewers than the ACC average. The Seminoles boast the highest average (3.17 million) and has exceeded 4 million viewers 17 times, an industry benchmark, from 2014-22.
Alford reiterated that FSU's athletic revenue, aside from conference payouts, would rank third in the SEC and third in the Big Ten.
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When Board of Trustees Chair Peter Collins said "it's almost impossible" for FSU to compete nationally with the projected revenue disparity, Alford interjected:
"It's impossible."
It was also explained it would cost FSU about $120 million to leave the ACC today, but that wouldn't account the expected litigation to break the ACC's grant of rights.
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Based on the $50 million Oklahoma and Texas each paid the Big 12 to leave for the SEC, it could cost FSU another $400 million to regain its television rights from the league.
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Regardless, FSU can't afford to sit still and must quickly find financial solutions.
While those answers could still be years away, FSU strategizes daily about its future.
Last August, FSU President Richard McCollough said during a speech at the Tallahassee Chamber of Commerce Conference the school would be very aggressive in its pursuit to remain competitive.
Alford on Friday also proved he's not bluffing.
"At the end of the day, for Florida State to compete nationally, something has to change moving forward," Alford said.
This article originally appeared on Tallahassee Democrat: FSU AD Michael Alford says lagging ACC revenue 'has to change'
