FSU v. ACC: Suit sees to invalidate $572M in exit fees, loss revenue rights

Florida State University (FSU) — which was kept out of the College Football Playoff after an undefeated season — is seeking to get out of the Atlantic Coast Conference (ACC) by filing a lawsuit that seeks to invalidate $572 million in exit fees and lost revenue rights.

Filed in Tallahassee circuit court, the lawsuit lambasts the ACC for failing to maximize revenue for its members and accuses the conference of breach of contract and restraint of trade and “chronic fiduciary mismanagement and bad faith.” FSU’s Board of Trustees approved the landmark lawsuit at an emergency meeting.

“Today we have reached a crossroads in our relationship with the ACC,” said Peter Collins, the Chair of FSU’s Board of Trustees. “We have exhausted all possible remedies.”

ACC officials ripped into FSU over the lawsuit, calling it a “clear violation” of the legal commitments made by the university.

“It is especially disappointing that FSU would choose to pursue this unprecedented and overreaching approach,” said ACC Commissioner Jim Phillips and Jim Ryan, the Chair of the ACC’s Board of Directors.

The dispute between the ACC and FSU has been building for months, if not years. Florida State officials and leaders have complained about the ACC’s existing contracts with ESPN, while other conferences such as the Big Ten and the Southeastern Conference have been able to reach much more lucrative deals with ESPN and other networks. FSU maintains that this is creating a sizable revenue gap in athletics that cannot be covered through fundraising.

FSU President Richard McCullough and others publicly complained about these arrangements during a trustees’ meeting held in August.

In early December, the Seminoles were kept out of the College Football Playoff even though the team had an undefeated season and won the ACC. The decision to leave out FSU was seen as yet another blemish on the ACC, as those involved in the snub contended that one reason for the move was that FSU did not play a strong enough schedule.

Trustees at their meeting insisted that the snub was not the reason for pursuing the lawsuit now and that the litigation had been in the works for months. Lawyers representing FSU even visited ACC headquarters in North Carolina to look at the deal between ESPN and the ACC.

But the opening of the lawsuit reads, “the stunning exclusion of the ACC’s undefeated football champion from the 2023-2024 College Football Playoff (‘CFP’) in deference to two one-loss teams from two competing Power Four conferences crystalized the years of failures by the ACC to fulfill its most fundamental commitments to FLORIDA STATE and its members.”

In its lawsuit, FSU seeks to not only have a judge rule that ACC penalties are unenforceable and unconscionable, but also find that FSU’s withdrawal from the ACC was first noticed on Aug. 14, 2023 — a move that would potentially allow FSU to move to another conference ahead of the 2024 football season.

The lawsuit also questions assumptions made about the rights deal between the ACC and ESPN. The suit asserts the deal does not last until 2036, as the conference maintains, and that, in reality, it expires in 2027 unless ESPN agrees to extend it further.

FSU’s snub from the playoffs has already triggered a separate antitrust investigation that was launched earlier this month by Attorney General Ashley Moody.

The litigation between FSU and the ACC is already garnering widespread national attention and could be seen as a pivotal moment for college football going forward as the sport becomes more and more dominated by the SEC and the Big Ten.