Florida State Accuses ACC of “Self-Dealing” in Latest Complaint

Last Updated on March 20, 2024

Update: Clemson filed its own suit against the ACC in March 2024.

The ongoing legal feud between Florida State University and the Atlantic Coast Conference saw another development on Monday, Jan. 29.

In a 59-page amended complaint against the ACC, filed in Florida’s Leon County Circuit Court, the university added onto its allegation of “chronic fiduciary mismanagement and bad faith” as it seeks a declaratory judgment to void the ACC’s Grant of Rights and withdrawal fee.

FSU filed the initial 38-page complaint in December, asking for a declaratory judgment to potentially leave the conference without receiving penalties of more than $570 million in lost media rights and fees. As part of the complaint, FSU asks the court to rule that the Grant of Rights and withdrawal fee are unenforceable under Florida’s unreasonable restraints of trade statute.

Under the ACC’s Grant of Rights, departing members forfeit annual media revenue until its expiration in 2036, which would amount to $429 million for FSU. Withdrawal would also mean forfeiting $13 million in unreimbursed broadcast fees for the remaining 13 years of the Grant of Rights’ term. Moreover, per the ACC’s Constitution, FSU would have to pay a withdrawal fee of three times the ACC’s operating budget, totaling $130 million. In sum, FSU would be penalized a staggering $572 million.

The amended complaint, notably, aims at John Swofford, who held the position of ACC Commissioner from 1997 to 2021. The complaint details several actions taken by Swofford that allegedly cost ACC-member schools millions of dollars.

In addition, the amended complaint uses the phrase “self-dealing,” which was not included in the original complaint:

“[T]hrough chronic fiduciary mismanagement, bad faith, and self-dealing, the ACC has persistently undermined its members’ revenue opportunities and streams including by demanding counterproductive ‘partnerships,’ locking them into a deteriorating media rights agreement that will soon result in an insurmountable annual financial gap between the ACC and other Power Five [soon to be Power Four] conferences and locking them into the ACC.”

The latest complaint even details the ACC’s partnership with Raycom Sports – a company that John Swofford’s son, Chad, worked for at the time. The university’s lawyers go to great lengths explaining how the ACC’s media rights partnership with Raycom Sports allegedly hurt ACC-member schools financially.

“When the smoke cleared, with the ACC members’ Tier II and Tier III media rights as barter, Swofford cajoled ESPN into entering into a separate ‘sublicensing arrangement’ with Raycom Sports under which ESPN sublicensed to Raycom Sports a package of content in exchange for which Raycom paid to ESPN a reported $50 million a year,” according to the complaint.

“The Raycom Sports Partnership has cost each ACC member several million dollars and continues to depress the value of their media rights, and the cost and success of their prestige network through today,” the complaint added.

Florida State’s amended complaint is only one of the several recent developments in the ongoing legal battle between the two sides.

In December, the ACC filed its own complaint in North Carolina – the state where the conference is headquartered – against the Florida State Board of Trustees, claiming that the university should be barred from challenging the Grant of Rights.

The initial complaints filed by the ACC and FSU – in their respective courts – were both submitted in a period of less than 24 hours from Dec. 21-22. The legal battle was sparked when FSU reportedly wanted out of the ACC after not getting voted into the College Football Playoffs, despite a perfect 13-0 record.

The ACC then followed up by filing a 55-page amended complaint in January. In addition to several other requests, the ACC seeks a permanent injunction against FSU, preventing the university from participating in the management of ACC affairs while there remains a “material conflict of interest” with the conference. On February 2, Chief Judge Louis A. Bledsoe deferred the ruling on the motion to seal files related to the conference’s broadcast agreements for up to 20 days until ESPN could weigh in.

Needless to say, a win for FSU could have a significant impact on the future of conference realignment and media rights.

Author

  • Nick Messineo

    Nick graduated from West Virginia University in 2020 and Michigan State University College of Law in 2023. Since graduating, Nick has written extensively on NIL and the rapidly evolving college athletics industry.

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