Florida State files lawsuit against ACC regarding grant of rights and withdrawal fee

The Florida State board of trustees unanimously voted on Friday to sue the ACC in an attempt to challenge the legitimacy of the league’s grant of rights and its $130 million withdrawal fee. This move by the university is seen as a crucial first step towards potentially exiting the conference.

The lawsuit, which spans 38 pages and was filed in Leon County Circuit Court in Tallahassee, Florida, aims to obtain a declaratory judgment against the ACC, arguing that the grant of rights and withdrawal fee are “unreasonable restraints of trade in the state of Florida and not enforceable in their entirety against Florida State.”

The university has accused the ACC of “chronic fiduciary mismanagement and bad faith” in its handling of multimedia rights agreements and member schools’ revenue opportunities, and has cited breach of contract and failure to perform by the conference.

Peter Collins, the board chair, stated, “I believe this board has been left no choice but to challenge the legitimacy of the ACC grant of rights and its severe withdrawal penalties. None of us like being in this position, but I believe that we have exhausted all possible remedies within the conference and we must do what we believe is best for Florida State.”

The unprecedented legal challenge by Florida State comes amid a backdrop of growing revenue gaps with other major conferences, such as the SEC and Big Ten. The university also voiced concerns over the distribution of media rights money within the ACC, pushing for uneven distribution based on the media value to the conference, which was rejected by the ACC.

This move by Florida State, which could have significant implications for the future landscape of college athletics, comes after months of legal review and a year-long assessment of the grant of rights. The university alleges that the ACC’s extension of media rights with ESPN in 2016 locked member schools into the same revenue package for 24 years, while other conferences had the ability to renegotiate their contracts and increase their revenue.

In response to Florida State’s legal action, ACC commissioner Jim Phillips and Virginia president Jim Ryan issued a statement, expressing disappointment with the university’s “unprecedented and overreaching approach.”

Should a judge grant declaratory judgment in favor of Florida State, the university would be able to leave the ACC without penalty. However, the ACC will have an opportunity to file a response to the complaint, and if no judgment is issued, Florida State and the ACC may be sent to mediation to negotiate a resolution.

The historical significance of this legal battle lies in the fact that no school has ever challenged a grant of rights in court, and the outcome of this case could potentially reshape the landscape of collegiate sports and the legal dynamics of conference membership agreements.

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