‘Nole Place Like Home: Florida State University Lawsuit Puts Atlantic Coast Conference on Notice

By: Anthony Ryback*                                                                 Posted: 02/19/2024

An undefeated Power 5 conference champion, and the only undefeated Power 5 conference champion in the ten-year operation of the four team College Football Playoff structure to not be selected to play for a championship.[1]  Unfortunately, in Florida State’s case, both of these situations describe their 2023 college football season.[2]  After its perceived snub in the selection process, Florida State displayed its displeasure with the Atlantic Coast Conference (“ACC”), which it is a member, by filing suit against the ACC.[3]  Florida State is seeking declaratory relief about the terms of the grant of rights and withdrawal fees imposed by the conference.[4]

Financial Implications of Missing Out on the College Football Playoff

The College Football Playoff Committee’s decision to leave Florida State from the top four teams at the end of the college football season directly impacted contractual incentives.[5]  However, these detriments did not represent the beginning of Florida State’s deteriorating relationship with the ACC.[6]  Instead, these were symptoms of a festering dissatisfaction that began with the signing of the grant of rights.[7]

ACC’s Grant of Rights

The grant of rights is a typical agreement made between member schools and the conference, agreeing that the member schools will transfer media rights of their home games to the conference for some time.[8]  Because these agreements serve to keep schools together, they become valuable to TV partners, like ESPN, who know the conference schools will be able to be broadcast for a set amount of time.[9]  Florida State, along with the other members of the ACC, signed their current grant of rights in 2016, and the deal is supposed to run through 2036.[10]  This control given to the conference is significant, and the exit fee punishes any school for leaving to the tune of $130 million.[11]

Florida State’s Lawsuit

On December 22, 2023, the Florida State University Board of Trustees filed suit against the ACC.[12]  Florida State’s complaint alleged that the ACC’s mismanagement has “undermined its members’ revenue opportunities including by locking them into a deteriorating media rights agreement that will soon result in a vast annual financial gap between the ACC and other Power Five (soon to be Power Four) conferences.”[13]  The complaint alleges seven separate counts.[14]  First, Florida State alleges that the withdrawal punishments are an unreasonable restraint of trade under Florida antitrust law.[15]  Second, Florida State alleges the withdrawal penalties are unenforceable.[16]  Third, Florida State alleges that “the ACC materially breached its contracts with Florida State.”[17]  Fourth, Florida State alleges that the ACC breached its fiduciary duty to Florida State.[18]  Fifth, Florida State alleges fundamental failure or frustration of contractual purpose.[19]  Sixth, Florida State alleges that the Grant of Rights is unenforceable for other reasons, including that it is in direct contradiction with the ACC Constitution and the 2016 ACC/ESPN agreement which Florida State believes allows it a “fundamental right to withdraw from the ACC”.[20]  Finally, Florida State alleges that the withdrawal policy is unenforceable because it is unconscionable, calling the withdrawal policy “monstrously harsh”.[21]

What’s Next?

Either Florida State remains in the ACC, or they leave.[22]  However, the two conferences that Florida State keeps holding up as a model: the Big Ten and the Southeastern Conference, have not made any indication that Florida State would become a welcomed member.[23]  But, the landscape is changing and conferences are no longer limited by geography.[24]  Without the assurances by the court that the ACC’s withdrawal penalties are unenforceable, Florida State may just be stuck in the ACC.[25]  But, if Florida State leaves the conference, the dominoes may fall, leading the ACC to become the next conference after the Pac-12 that is left scrambling and throwing a Hail Mary to keep its remaining members together.[26]

*Staff Writer, Jeffrey S. Moorad Sports Law Journal, J.D. Candidate, May 2025, Villanova University Charles Widger School of Law.

[1] See David Rumsey, Florida State is Still Unhappy With CFP Snub. Could Noles Leave ACC?, Front Off. Sports (Jan. 4, 2024, 10:25 AM), https://frontofficesports.com/florida-state-is-still-unhappy-with-cfp-snub-could-the-noles-leave-the-acc/ (explaining rarity that occurred when FSU was not selected to participate in College Football Playoff); see also Jerry Palm, Unprecedented Season Led College Football Playoff To Buck History, But Florida State’s Gripes Are Legitimate, CBS Sports, (Dec. 3, 2023, 3:43 PM) https://www.cbssports.com/college-football/news/unprecedented-season-led-college-football-playoff-to-buck-history-but-florida-states-gripes-are-legitimate/ (“The College Football Playoff Selection Committee had been consistent over the first nine years of the event's existence: Undefeated Power Five conference teams make the playoff; one-loss teams that played each other are ranked winner ahead of loser.”).

[2] See 2023 Florida State Football Schedule (13-1), ACC, https://theacc.com/schedule.aspx?schedule=3662 (last visited Feb. 8, 2024) (detailing FSU’s undefeated regular season, which included unbeaten 8-0 record in ACC conference play).

[3] See Rumsey supra note 1 (describing lawsuit filed against ACC, arguing ACC has fallen short of contractual commitments including generating revenues, creating opportunities for its athletes to compete in championships, and maximizing opportunities for ACC student-athletes).

[4] See id. (explaining grounds of suit, finding severe withdraw penalties of $572 million, also including counts of restraint of trade, breach of contract, and failure to perform).

[5] See Eric Fisher, After Unbeaten FSU’s Snub, Financial and Legal Fallout, Front Off. Sports (Dec. 4, 2023, 8:28 AM), https://frontofficesports.com/after-unbeaten-fsus-snub-financial-and-legal-fallout/ (discussing significant ramifications from lack of inclusion of Florida State in College Football Playoff) Instead of a $6 million payout to ACC for team making College Football Playoff, the payout was reduced to $4 million because Florida State was relegated to Orange Bowl.  See id. (finding recruiting and business operations may be impacted by College Football Playoff exclusion).  Moreover, head coach Mike Norvell missed out on a potential $950,000 bonus if Seminoles had won the National Championship, and instead only received $200,000 bonus.  See id. (describing minimum bonus had FSU made National Championship as $500,000).

[6] See Andrea Adelson & David Hale, How The Rest of The ACC is Reacting to Florida State’s Unhappiness, ESPN (Aug. 6, 2023, 9:00 AM), https://www.espn.com/college-football/story/_/id/38135996/acc-florida-state-college-football-2023-conference-realignment (finding Florida State’s unhappiness was publicly expressed for first time in February of 2023 because Florida State athletic director Michael Alford felt “there was no urgency to address changing ACC revenue distribution”).

[7] See Nicole Auerbach, Chris Vannini & Mark Puleo, Florida State vs. the ACC: What You Need to Know About The Seminoles’ Clash With Their Conference, The Athletic (Dec. 21, 2023), https://theathletic.com/5155214/2023/12/21/florida-state-acc-conference-grant-of-rights-realignment/ (discussing frustration of Florida State, viewing ACC as less supportive of member schools than Big Ten or SEC Conferences are of their respective schools).

[8] See id. (explaining grant of rights and how they operate, including how ACC’s grant was based off of similar grant of rights created by Big 12 Conference).

[9] See id. (talking about benefits bestowed by conference grant of rights, including stability and value for television partners like ESPN, also showing revenue payouts gained by ACC schools including “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).”).

[10] See Andrea Adelson, Florida State Suing ACC Over Grant of Rights, Withdrawal Fee, ESPN (Dec. 22, 2023, 11:05 AM), https://www.espn.com/college-football/story/_/id/39167937/florida-state-sue-acc-grant-rights-withdrawal-fee (analyzing lawsuit filings from both Florida State and ACC alleging validity of grant of rights agreement).

[11] See id. (finding exit fee of $130 million commensurate with three times league’s operating budget, while forfeiture of television revenue would shoot fee up to $572 million).

[12] See Florida State Trustees Sue ACC For Mismanaging Media Rights And Imposing ‘Draconian’ Exit Fees, (Dec. 22, 2023), https://news.fsu.edu/wp-content/uploads/2023/12/ACC-LAWSUIT-NEWS-RELEASE-122223-2-1.pdf (describing ACC’s mismanagement of financial matters impacting entire conference).

[13] See Fla. State Univ. Board Of Tr.s v. Atl. Coast Conf., 1, 2 (Fla. 2d. Cir. Ct. Dec. 22, 2023)(alleging bad faith on behalf of ACC).

[14] See id. 28-38 (listing counts against Florida State including restraint of trade, breach of contract, and failure to perform along with arguments that withdrawal penalty is unenforceable).

[15] See id. at 28 (arguing restraint of trade by not allowing Florida State to seek better deal in marketplace for its student-athletes, and that withdrawal penalty wrongfully prohibits and restrains movement).

[16] See id. at 32 (seeking declaratory judgment that withdrawal penalties are wholly punitive and thus unenforceable).

[17] See id. (arguing material breaches on behalf of ACC by essentially not protecting its members, including Florida State, and by not effectively exploiting media rights).

[18] See id. at 34 (alleging ACC breached fiduciary duty by not negotiating and maintaining competitive agreements).

[19] See Fla. State Univ. Board Of Tr.s v. Atl. Coast Conf., 1, 35 (Fla. 2d. Cir. Ct. Dec. 22, 2023)(finding ACC admitted failing to generate substantial revenues for members).

[20] See id. at 36 (showing these other reasons include ACC Grant of Rights was never contractual, and that it is not enforceable as to Florida State).

[21] See id. at 38 (arguing withdrawal policy and Grant of Rights unconscionable because they are “monstrously harsh, shocking to the conscience and the result produces a profound sense of injustice, and thus are unconscionable in practice and in theory.”).

[22] See Auerbach et al., supra note 7 (discussing next steps for Florida State, including seeking invitations from Big Ten and SEC or even exiting ACC without other conference slot secured).

[23] See id. (discussing that Big Ten and SEC will not want to publicly discuss Florida State’s ongoing legal battle with ACC).

[24] See Tom D’Angelo, Why Florida State’s Departure From the ACC Appears to be Inevitable, Palm Beach Post, (Dec. 22, 2023, 2:18 PM), https://www.palmbeachpost.com/story/sports/college/acc/2023/12/22/florida-state-more-motivated-to-leave-acc-why-it-could-succeed/72010308007/ (arguing SEC makes geographic sense because Florida State located in South, but Big Ten, historically Midwestern, recently expanded into Southern California and Northwest).

[25] See id. (explaining ACC grant of rights is generally held to be “ironclad”).

[26] See J. Brady McCollough, Inside the Pac-12 Collapse: Four Surprising Moments That Crushed The Conference, L.A. Times, (Aug. 16, 2023, 4:42 PM), https://www.latimes.com/sports/story/2023-08-16/pac-12-collapse-decisions-realignment-ucla-oregon (describing how Pac-12 became Pac-4 due to lack of planning regarding media rights, leading to transfers of key schools like USC, UCLA, Washington, and Oregon to Big Ten).