— The Athletic’s Nicole Auerbach, Chris Vannini and Mark Puleo contributed to this story.
Florida State continues to mull its options for leaving the Atlantic Coast Conference and has scheduled an emergency meeting of its Board of Trustees for Friday morning, restarting realignment speculation around college sports after a chaotic summer of conference reshuffling took a backseat to the fall’s football season.
Why are the Seminoles looking for an exit strategy, and what do their moves mean for the rest of the ACC? Here’s what to know.
Why is FSU unhappy with the ACC?
The Seminoles are the most vocal of a group of ACC schools that have raised concerns over the past year-plus about the growing revenue gap from the ACC to the SEC and Big Ten. FSU president Rick McCullough in August cited projections showing that the Seminoles will fall behind their peers in the Big Ten and SEC by as much as $30 million per year by the end of those leagues’ current media deals.
Last year, the Big Ten finalized a new set of broadcast rights agreements worth a total of more than $1 billion per year, which are widely expected to push its annual revenue distributions per school toward $70 million per year; the SEC is poised to raise its revenue payouts to a similar level when Oklahoma and Texas join the league in 2024. Meanwhile, the ACC distributed an average of $39.4 million per school for the 2021-22 school year, a number that has steadily increased but still lags well behind those of the Big Ten ($58.8 million in ’21-22) and SEC ($49.9 million in ’21-22). The ACC’s media rights deal with Disney/ESPN was amended in 2016 (to allow for the creation of the ACC Network) and extended from June 30, 2027 through June 30, 2036, well past the lifespan of the current SEC and Big Ten deals.
At the conference’s spring meetings in May, reports emerged that seven ACC schools (Florida State, Clemson, Miami, North Carolina, NC State, Virginia Tech and Virginia) had been thoroughly examining the league’s grant of rights document, exploring ways to leave the league before 2036. But the schools emerged from those meetings projecting unity and later that month endorsed a plan for increased league payouts to schools based on their teams’ performance in revenue-generating postseason play. Commissioner Jim Phillips has repeatedly referenced the ACC’s ongoing search to find additional revenue streams for the conference.
What did the CFP snub have to do with all this?
Although Florida State’s No. 5 ranking by the CFP selection committee that left them out of the semifinals was not directly attributed to FSU’s conference affiliation but rather quarterback Jordan Travis’ injury, it has hung over ongoing conversations among school officials about how to change or improve their conference situation, and it will expedite Florida State’s decision timeline for potential action, multiple sources briefed on such conversations told The Athletic.
In the aftermath of the snub, two Florida State sources expressed their belief that if the resumes and injury situations of FSU and Alabama had been flipped, the Crimson Tide would have gotten the benefit of the doubt, and that Florida State was held to a different standard by the committee compared to any other contending team. The sources also expressed displeasure with Phillips for not stumping for the Seminoles’ inclusion in the Playoff more publicly in the lead-up to the final rankings. (An ACC source pushed back on that characterization, pointing out that there are more ways to advocate for a team than just in public settings.)
How does the ACC’s grant of rights work, and can FSU get out of it?
A grant of rights is an agreement in which schools transfer the media rights of their home games to the conference for a set period. That guarantee of keeping everyone together both provides stability and creates more value for TV partners, who then know they have guarantees in what they’re signing up and paying for. TV partners aren’t part of a grant of rights, but the length of such agreements typically coincides with the length of a TV deal.
The ACC’s current grant of rights, modeled after the Big 12’s, was signed at a time when the league was scrambling for stability, adding Louisville and incorporating Notre Dame (as a non-football member) in 2012 after losing Maryland to the Big Ten. In 2016, the league’s ESPN deal was extended through the 2035-36 season while bringing about the creation of the ACC Network (which launched in 2019).
The ACC’s grant of rights is believed to be ironclad, but that hasn’t stopped lawyers from most ACC schools from examining the document for more than a year in efforts to find a way to successfully challenge it in court. The document is located at ACC headquarters and can’t be removed or copied, so school officials must visit to view it.
Not only would any school have to pay an exit fee of three times the league’s operating budget, or roughly $120 million, upon leaving the league before the grant of rights expires, the ACC would also continue to own the broadcast rights of all of its teams’ home games. The cost of buying one’s rights back could be significantly more expensive than the exit fee. That combined cost has been seen as prohibitive to any conference exodus, but Florida State’s interest in taking legal action indicates a push for an avenue out of the deal without losing all that money.
Where is FSU trying to go?
FSU leaders have consistently cited the Big Ten and SEC as college athletics’ competitive and financial standard-bearers. Following the lead of recent realignment moves around the country, the school’s thinking goes that if it were to free itself from long-term ACC control, an invitation from one of the two leagues would follow.
However, neither the SEC nor the Big Ten has offered any indication that an invitation would be waiting for FSU on the other side of a legal battle. Recent SEC additions have served to expand the conference’s geographic footprint, and the league already has Florida as a member. In the Big Ten’s case, FSU would mark an additional set of logistical hurdles for an 18-team league still working to incorporate its incoming western wing of USC, UCLA, Washington and Oregon.
It’s also not clear how much more money Big Ten and SEC media partners have to offer. The Big Ten only added Oregon and Washington after a commitment from Fox, but those two schools will not receive full conference payouts upon joining. One reason the SEC hasn’t moved to nine conference games is that ESPN won’t pony up more money for it. Meanwhile, ESPN already has FSU’s rights through the ACC.
The Big Ten and SEC would also be very careful not to indicate any interest until FSU is free, lest they be viewed as tampering and face legal trouble of their own for incentivizing FSU to break its grant of rights.
In August, FSU trustees suggested they would support the idea of the school betting on itself in an ACC exit, even if it didn’t know where it would land when it jumped.
One option that appears to be off the table? Joining Notre Dame as an independent and supporting the athletic department entirely on revenue driven by FSU teams’ events and broadcast rights.
“I don’t think it’s an option because of scheduling and everything that comes along with that, and where media contracts are now,” FSU athletic director Michael Alford told The Athletic this fall. “But I’m not going to lie to you and say I didn’t spend 10 minutes on it. … I have a great staff that knows that I want to look at things and know what all my options are but also have analytics and not just throw something up there. It needs to have some support behind it so we can look at it.
“Is that a true option? No, it’s not a true option.”
What would the ACC do if it loses FSU?
The league’s additions of Cal, Stanford and SMU this summer can be viewed as a way to pre-backfill ahead of a possible loss of FSU and other schools. The ACC could afford to lose some schools and still survive, meeting membership requirements with at least 15 schools in the fold. And if the league receives an influx of hundreds of millions of dollars from FSU’s exit, that’s more money for the schools that stay. (FSU, Clemson and North Carolina voted against the additions of the three new schools, so those would be other schools to watch in the weeks and months ahead.)
Could other schools follow FSU’s lead?
It depends on the result of the legal fight. If a court rules that a league’s grant of rights is unenforceable, then not only could other schools follow FSU’s example but similar challenges could be lodged to any other grant of rights and throw future plans into the air for every conference.
If this fight instead results in FSU and the ACC agreeing on a cost of hundreds of millions of dollars to leave ($120 million as an exit fee, plus much more to be let out of the grant of rights), things are less clear. Would other schools have the funding or the desire for such a move? The public revelation this spring of the names of the seven schools involved in conversations about their shared circumstances spooked some.
How attractive is FSU’s brand to other conferences?
A decade ago, Florida State was firmly entrenched in college football’s top tier, with Jimbo Fisher and quarterback Jameis Winston leading the Seminoles to a BCS national championship and a trip to the first College Football Playoff. But then the bottom fell out for the program for most of the following decade.
The Seminoles have made structural changes in an effort to once again carry themselves like an upper-tier national contender under the direction of head coach Mike Norvell, who has led the team to a 23-3 record over the past two seasons. Florida State’s total salary commitment to its football coaching staff now ranks among the top 15 in the nation, and Norvell’s $7.3 million annual salary ranks 15th among public schools, according to the USA Today Sports coaching salary database. And the athletic department has regularly sent out announcements of the Seminoles’ conference-leading broadcast viewership numbers throughout this football season.
The ironic part of all of this is that many industry sources believe North Carolina and Virginia are more valuable commodities than FSU because they’d represent new states and markets (which means higher conference network fees) for either the Big Ten or the SEC. Florida would be a new state for the Big Ten, though FSU is not a member of the Association of American Universities (AAU), a marker of academic excellence. Every school that the Big Ten has added was an AAU member at the time.
Is CFP expansion a factor in this decision?
It was not lost on the Seminoles that had the 12-team Playoff format begun this year, the SEC and Big Ten would have dominated the at-large bids. FSU was the only school not from those two conferences ranked in the top 12 of the committee’s final rankings. And although the expanded Playoff reserves the top four seeds for the highest ranked conference champions, meaning the Seminoles would still have gotten an advantageous path to the title game despite their injury situation, they perceive SEC and Big Ten at-large teams to receive more margin for error from the selection committee.
Timeline of events
Feb. 24, 2023: At a school board meeting, Florida State athletic director Michael Alford tells trustees, “For Florida State to compete nationally, something has to change moving forward.” Alford’s remarks harp on the difference in projected conference revenue distributions between the ACC and the Big Ten and SEC once those leagues’ new media rights deals begin.
March 2: ACC commissioner Jim Phillips tells The Athletic that concerns about the league’s revenue generation are not new and the ACC has been looking for ways to innovate and find new revenue streams to enhance its business.
“I completely understand that there’s some frustration among member institutions, and that is why we’re working together to address these concerns,” Phillips says.
May 15-17: ACC administrators gather in Amelia Island, Fla., for the league’s annual spring meetings and discuss potential revenue-sharing models to be implemented in the new 12-team playoff era. Meanwhile, reports emerge that seven schools are studying the ACC grant of rights and have discussed exploring ways to leave the conference. As plans for additional revenue opportunities take shape within the league meetings, Alford says the Seminoles are “thrilled” to be in the ACC and want to remain a league member. Phillips tells reporters, “What I’ve been told (by athletic directors and presidents) is that we’re all in this together — emphatically.” He adds that he encourages school to come to the ACC headquarters and examine the league’s grant of rights: “That’s not a warning sign to me that something bad may happen, et cetera.”
May 24: The ACC announces that it is launching a “success incentive initiative” starting in 2024-25 that will distribute additional league payouts to schools based on their teams’ performances in revenue-generating postseason play.
Aug. 2: Florida State president Rick McCullough addresses the Seminoles’ Board of Trustees, tells the school leaders, “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.”
McCullough cites projections that Florida State will fall behind its peers in the Big Ten and SEC by as much as $30 million per year by the end of those leagues’ current media deals. “We, along with Clemson and others, help to carry the value of media rights in the ACC,” McCullough continued. “No offense to my colleagues. That’s just the numbers.”
“It’s not a matter of if we leave (the ACC), in my opinion,” says former FSU quarterback and trustee Drew Weatherford. “It’s a matter of how and when we leave. Not everyone may agree with that, but I feel really strongly about it.”
Aug. 15: The deadline for any ACC school to give notice to the conference that it was departing in order to compete elsewhere the following academic year passes without any move from FSU or other members.
Sep. 3: The No. 8 Seminoles open their season with a 45-24 win over No. 5 LSU, a resounding victory for the ACC and a performance that kicks off quarterback Jordan Travis’ Heisman campaign.
Nov. 1: Alford tells The Athletic that leaving the ACC to become an independent in football is “not a true option.”
Nov. 18: Travis suffers a serious left leg injury in the first quarter of No. 4 Florida Sate’s 58-13 win over North Alabama. The program turns to backup Tate Rodemaker and then third-string freshman Brock Glenn to run the offense in the season finale against Florida and the ACC title game against Louisville.
Dec. 3: One day after the Seminoles complete a 13-0 regular season with a 16-6 win against No. 14 Louisville, Florida State is leapfrogged by Alabama for the No. 4 spot in the selection committee’s Top 25 and left out of the College Football Playoff. Coach Mike Norvell says he is “disgusted and infuriated” by the committee’s decision, and Travis writes on social media that “I wish my leg broke earlier in the season so y’all could see this team is so much more than the quarterback.”
Dec. 21: Florida State schedules an emergency meeting of its Board of Trustees for Dec. 22.
Required reading
(Photo: John Byrum / Icon Sportswire via Getty Images)
Source link
credite