The future of college football may see a seismic shift in just a few short years. FSU’s legal battle, and ultimately their settlement with the league, provides instant returns while also providing a path to best position themselves for what is potentially coming.
Tuesday’s news of a settlement between the Atlantic Coast Conference, Clemson, and Florida State put a momentary end to a saga that has played out in public for two years.
Many of the public comments by FSU about league business and finances, and a belief that a change was needed, that preceded their legal filing came about after the more than year-long court tussle that moved at a snail’s pace.
Florida State University Vice President and Director of Athletics Michael Alford spoke of brand value and rewarding such value with unequal revenue sharing. He did it at that February BOT meeting in 2023 and in the immediate months after among his peers at the ACC Spring Meetings. There were also comments to the media, etc. during the in-between.
President Richard McCullough Ph.D. and the FSU Board of Trustees, led by chairman Peter Collins, were also vocal about the need for the legal pursuit, the ultimate goals of positioning FSU as best as possible, an the belief that ultimately an agreement between FSU, and other schools, with the league and media partners, was worthy of a new interpretation.
FSU set off on the legal battle, with plenty of ire in their direction, but unflinching in putting FSU first.
At the time, a bravado permeated from the league – especially from a select few members of the league – that they had a solid legal standing that would essentially keep FSU in their place and keep revenue equally shared from those who draw eyeballs versus those who simply do not.
At the end of this saga, between success initiatives and brand value viewership initiatives, the possibilities exist for schools to make in the ballpark of $20 million above what the equal revenue share figure was previously. If a school, such as FSU, is able to max out all of the above initiatives – and eyeballs on FSU has never been an issue – then that financial ramification of this fight will, in some part, help a program such as FSU to close the gap on Big Ten and SEC programs that they are trying to compete with at the highest level.
While more money is important, the ability to have a clear and concise way to exit the conference, eventually, is the more important matter at hand and success from the fight.
The ACC created a lengthy grant of rights agreement originally in 2013 and amended it in 2016, with an expiration date of 2036. A 20-year contract in the world of college football seems like an insane notion, but league members decided to partake in it for an expected value, which it can be argued hasn’t been lived up to by media partners, and for stability, which in the world of constant realignment was essential at the time.
The grant of rights agreement was viewed as a financial anchor that would prevent schools from departing. During legal arguments between the league, figures ranging from $500 to $700 million for departure – exit fee plus cost of media rights due to grant of rights – were thrown around in court. The parties have agreed to disagree regarding those figures here at the finish line, but regardless, the view is that it was an ultra-expensive endeavor, with no real clear and concise language or figures, on what it would ultimately cost a school to gain their freedom from the ACC.
The fight didn’t provide guaranteed freedom, but it clarified the price and a potential timeline for such.
To exit the ACC with your media rights, the cost in the 2026 fiscal year will be $165 million dollars. It will drop by an estimated $18 million per year after that until 2030-31 when the exit fee is $75 million and locked in for the remainder of the current deal – which due to ESPN picking up the option during this legal situation is officially 2036.
Now the cost-benefit analysis begins as a shift is viewed as coming on the college athletics, specifically football, horizon.
When, if ever, and there is probably a time when it comes, does it make sense to venture towards another league, specifically the Big 2. Things that have to be weighed by decision-makers and those in charge of finances is the cost to leave, the value (partial share vs. full share) of joining another league, and ultimately, do leagues truly exist in college football’s future – which they probably due because of things like history and nostalgia.
With media contracts for the Big Ten, SEC, and College Football Playoff all due for re-negotiation around the time of 2030 – the belief is that college football is close to a potential two super conference format than ever before. It is clear what two leagues are driving the pace cars towards that potential realignment, while also using their immense power to provide benefits with a potential re-formatting of the CFP.
Also, and more importantly, those leagues have media rights deals currently that are of greater value than what the ACC has provided.
The CFP is a financial cherry on top. The ACC may be an easier path than those two leagues, but again, the boxing out is being done to provide more opportunities for those leagues and their teams than everyone else.
So while the settlement between the ACC and their two most prominent football schools brings some stability and certainly calms the bickering and legal battling between all parties, it isn’t the real finish line. The real finish line for where this all goes still lies ahead.
FSU got into the fight to put themselves in the best position to be a successful athletic department with the best opportunity to achieve top-tier success in all sports, but especially in football. Those goals haven’t and won’t change under current leadership.
Now they just have the potential for more money to be earned, as it should be, and clarity on how to ultimately depart, when or if the time ultimately comes.
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