Florida State Board of Trustees approves lawsuit against ACC, challenging Grant of Rights

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Florida State Board of Trustees approves lawsuit against ACC, challenging Grant of Rights

Ehsan Kassim, Tallahassee Democrat · Tallahassee Democrat

Fri, Dec 22, 2023 ·

9 min read

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Florida State University held a special board of trustees meeting Friday to discuss its long-term athletics future in the Atlantic Coast Conference .

The Seminoles have strongly voiced their frustrations in the past about the ACC .

FSU enjoyed an undefeated 13-0 season and an ACC Championship but was still being denied a spot in the 4-team College Football Playoffs.

Follow here for live updates.

ACC offers statement in response to FSU lawsuit

Statement from ACC Commissioner Jim Phillips, Ph.D., and Jim Ryan, Chair of the ACC Board of Directors, on Florida State's Board of Trustees Meeting

"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. 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.

"As a league, we are proud of the successes of our student-athletes and that the ACC has won the most NCAA National Championships over the past two and half years while also achieving the highest graduation success and academic performance rates among all FBS conferences, so it is especially disappointing that FSU would choose to pursue this unprecedented and overreaching approach.

"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."

-ACC Press Release

Motion to approve passes

The FSU Board of Trustees has approved the motion to file the complaint without any objections, allowing David C. Ashburn, the Managing Shareholder of the Tallahassee Office and representing FSU, the ability to file the motion today in Leon County courts.

FSU not seeking any immediate relief from the court

If the board approves the complaint, David C. Ashburn, the Managing Shareholder of the Tallahassee Office and representing FSU, said FSU will file a complaint in circuit court in Tallahassee today. The case will likely be available on the court website the day after Christmas.

Then they are hoping for cooperation and a litigation process with the ACC, with a chance to gather additional information and meaningful discussions with the conference and other schools.

"We have not asked for any immediate relief from the court. In other words, there's not going to be a preliminary injunction hearing or anything of that nature that we request we're simply going to pursue the normal course of litigation," Ashburn said.

Carolyn Egan, FSU Office of the General Counsel said the board has not previously seen the agreement

"The conference, the multimedia rights agreement is between the conference and the network only. And there's not a direct participation in that negotiation," Egan said.

Michael Alford calls FSU's future decision a 'math problem'

"It really points to the mismanagement of previous conference administration in stewarding future finances for our best interests," FSU AD Michael Alford said. "The future of college athletics is really at a crossroads of the Chairman and I talk about that a lot. President and I talk about that a lot. Whether it's no via contracts that present financial challenges or proposed recent changes by the NCAA that are going to impact everyone in this industry operation budgets moving forward."

Alford adds this is a "math problem."

Richard McCullough: 'We have in many ways exhausted all our options'

"This is not this is certainly not where I would prefer to end up at," FSU President Richard McCullough said. "I think that I would prefer a different pathway. I feel that we have in many ways exhausted all our options because these things are timing and you can't wish and hope that somehow will get fixed."

A look into FSU's complaint

David C. Ashburn, the Managing Shareholder of the Tallahassee Office and representing FSU, laid out the counts FSU is seeking to challenge the Grant of Rights .

First count: It violates Florida law.

Second count: Unenforceable penalty on the grant of rights penalty. Ashburn said the court can invalidate the fee or set a new, smaller fee for an exit.

Third count:Breach of contract. "So first and foremost, the ACC has failed to appropriately give FSU the value of its athletic program media rights back being diluted those agreements those rights going forward," Ashburn said.

Fourth count: Breach of fiduciary duty. "It tracks in many respects the contractual obligations and the ACC does have fiduciary duties to its members."

Fifth count:Fundamental failure of contractual purpose

Sixth count: Unconscionability and violation of public policy

Ashburn adds: "So we're prepared to file this complaint today. and we're hopeful that you all authorize us to do so."

Additions to ACC hurt conferences' bargaining power for media rights

"On September of 2023, over the strenuous objections of FSU and other ACC members. the ACC added three members. The new members are widely respected academic institutions but not strong tier one need of detail, don't have strong tier one me feel in football, and as the, as the Chairman said, the result of that is to actually diminish the bargaining power of the ACC for its media rights," said David C. Ashburn is Managing Shareholder of the Tallahassee Office.

Penalty of breaking Grant of Rights is $572,000,000.00

The penalty for breaking the ACC Grant of Rights and the severe ACC withdrawal penalty to leave the conference is $572,000,000.00, according to a graphic provided by the Board of Trustees.

'ACC has failed in all those respects'

"First off a fundamental background to this matter is that the ACC has a constitution and bylaws and is also in court filings made commitments. It's committed to generate substantial revenues to foster quality competitive opportunities for student athletes and championships to maximize athletic opportunities and to be at the forefront. In athletic achievement. And unfortunately, the ACC has failed in all those respects," said David C. Ashburn is Managing Shareholder of the Tallahassee Office.

Peter Collins says ACC, FSU at crossroads

"Today we've reached a crossroads in our relationship with the ACC. We are faced with the fact that the ACC is locked into a deteriorating media rights contract at revenues far below other conferences. The ACC leadership is also not interested in further negotiations. on unequal revenue sharing, or larger success initiatives," FSU Board of Trustees Chairman Peter Collins said.

Collins added, "I believe this board has been left no choice but to challenge the legitimacy of the ACC grants of rights and its severe withdrawal penalties."

FSU athletics is under challenge requiring action

"I've asked you here today because I believe FSU athletics is under challenge requiring action on our part," FSU Board of Trustees Chairman Peter Collins said of why this Board of Trustees Meeting is happening three days before Christmas.

"When FSU joined the ACC in 1991, the gap in revenue between teams in some of the 10 power five conferences and the ACC was less than 7 million. Florida State has always been able to overcome any such deficit through internal fundraising to make sure its programs are funded at elite levels. In fact, if you took the value of the various conference TV contracts out of last year's athletic budgets in the NCAA, Florida State's budget was the seventh highest in the nation. Unfortunately at the same time, Florida State's annual payout from the ACC is the smallest and percentage of any school's overall athletic budget and the conference next year the funding gap will between the ACC and the two other conferences will grow to over 30 million per team per year. It's one thing to fundraise and make up 7 million. It's another entirely to make up over 30 to 40 million annually."

No public comments for meeting

No one from the public has requested to speak for public comment.

Only the board of trustees will have a chance to speak about today's agenda.

FSU Board of Trustees Meeting underway

The Florida State Board of Trustees Meeting is underway, as roll call is going on for all the trustees.

As of the start of the meeting at 10 a.m., 1,693 people were watching.

Stay tuned here for live updates.

People already waiting to join YouTube

Roughly 7 minutes before the start of the meeting, already 619 people are waiting to join the video conference and live stream.

Nearly 2,000 who watched the meeting of the Aug. 2 livestream.

'An existential crisis': What FSU President Richard McCullough said in August

Conference realignment, a likely topic for today's board meeting has been brewing for a while with the FSU Board of Trustees.

In an August meeting, FSU President Richard McCullough had some strong comments about the Seminoles' future in the ACC.

"It's an exaggeration but an existential crisis perhaps for Florida State University, as we will be $30 million per school per year. Behind in our gap and conference distribution with our with, you know, contractual with contracts that are said to go through 2036," McCullough said.

"So, this current situation presents a very difficult situation for us. Because we are investing in things like football, football, and basketball, bringing in the most revenue which actually supports all the rest of the sports without increasing revenue will face major challenges and being able to compete in football."

FSU Board of Trustees meeting to start at 10 a.m., virtually

The Democrat is live at the Westcott Building, where public comments can be made. There isn't much expected in terms of attendance.

All of the FSU Board of Trustee members are expected to be calling in on the Zoom Video Conference call, as everyone is spread out for the holidays.

Why does Florida State want to leave the ACC?

After the undefeated ACC champion, FSU Seminoles were left out of the College Football Playoff , and a lot of people (from political leaders to former coaches ) are understandably very mad about it .

It has reignited the preseason firestorm of moving FSU out of the ACC due to a displeasure over the conference's revenue sharing plan. FSU feels it deserves a bigger share with the amount of revenue the school generates.

Most complaints circle around the ACC's TV contract with ESPN, which extends through 2036. Meanwhile, the Big Ten and SEC have signed large contracts and the gap for revenue is growing between the two upper tier conferences and the ACC. The Seminoles don't want to be left behind.

Reach Ehsan Kassim at ekassim@gannett.com or follow him on Twitter at @Ehsan_Kassim. You can also follow our coverage on Facebook (NoleSports), Instagram (tlhnolesports) and YouTube channel (NoleSportsTD).

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This article originally appeared on Tallahassee Democrat: FSU Board of Trustees approves lawsuit to be filed against ACC

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