FSU-ACC lawsuit is complex, will take years to resolve

More than a year ago, Florida State athletics director Michael Alford warned the FSU Board of Trustees that FSU's share of the Atlantic Coast Conference's media rights agreement would no longer be sufficient to compete against the SEC and Big Ten conferences' new media rights agreements, which are estimated to be $40 million per year, per school more than ACC schools will receive, ostensibly until 2036.

The FSU and ACC would file suit against each other for what Alford characterized as a math rather than relationship problem.

His warnings were based in part on the Alston vs. NCAA antitrust case, which resulted in a unanimous Supreme Court decision in favor of the players. From an antitrust standpoint, the Supreme Court wrote that the NCAA's business model is illegal. Alford also warned about a much larger revenue-sharing case coming, House vs. the NCAA, one the NCAA and five power conferences knew they needed to settle. The cost of that settlement is estimated to be $1.8 billion in restitution and $25 million per school annually moving forward.

While SEC and Big Ten schools will be able to absorb that $25 million per school with the $80 million media agreement, how will an ACC school be able to compete with the Big 2 conference schools when they have to share $25 million of revenue with a $40 million media rights agreement?

In this second installment of a series regarding the changing financial challenges of collegiate athletics at Florida State, the Osceola asks Alford to share what he can about the now 10-month-old lawsuit between the Florida State Board of Trustees v. The Atlantic Coast Conference.

Part I: A transformational time for FSU and college athletics

As you might imagine, Alford is limited in what he can say about those lawsuits, but did offer some honest perspective about the importance of the suit, and a timeline for receiving a court ruling on the merits of the Grant of Rights.

When asked if he could provide details on the lawsuit, he responded: “No, not really, so that I can let the lawyers do their job,” Alford said. “I get up, I read updates just like you do. I get better updates from the Internet, quicker updates, about what’s going on.”

Alford would nibble on questions on the edges of the suit, including whether Leon County Circuit Judge John Cooper's order for the ACC to provide an unredacted media rights agreement under seal has been a benefit for FSU's lawyers.

“It keeps us from having to go to Greensboro or Charlotte,” Alford said. “We made so many trips to Greensboro because when you come back, you review your notes and say, ‘I have a question about this. What does this mean?’ You come up with questions after reading your notes, and you’d have to go back to answer your own questions about it, because it couldn’t leave the room. You could take notes. Now we have a sealed copy of it, at least our lawyers do, sealed in their offices. We don’t have to fly there just to answer our questions.”

We asked Alford if Florida State has been in conversations with Clemson about the Tigers’ parallel lawsuit against the ACC.

“No,” Alford said. “That would be collusion.”

While some believe the lawsuit will settle soon, The Osceola asked Alford if the lawsuit has tentacles that make the case more complex than many fans and media realize.

“There is a ton and that’s why it’s going to take years,” Alford said. “People don’t understand. They are like, ‘Just leave.’ I’m like, ‘It’s not that easy.’ That’s also why we started when we started knowing the (SEC and Big Ten) contracts were coming, and the financial distance between the other two conferences would be growing. We pointed that out years ago, right?”

The House case coming also created urgency to seek the court's advice on the validity of the ACC contracts which purport to bind all ACC schools until 2036.

“We had to try as best we could, to start the process to get our questions answered about the future of the conference, so we can make sure that Florida State is put in the best position possible moving forward,” Alford said. “And we had to start that process when we did. It is a process.”

Mediation is on-going.

FSU and the ACC were ordered to mediation early by Judge Cooper, which is his standard practice. While many assume this case will end in a mediated settlement, lawyers who make their living mediating other cases believe this case has too many interested parties with diverse interests for it to settle quickly.

When Alford was asked if he agreed this mediation could also be complicated, he replied: “You can say that again.”

ACC commissioner Jim Phillips would have to get a board of 18 schools with very vested and diverse interests to agree on a settlement, not to mention corporate partners, including ESPN, who would be affected, too.

A simple example of how the diversity of interest can complicate the process is the time it took to come to an agreement on the ACC success initiative.

“There are schools that disagree with an award revenue distribution,” Alford said. “They want to stay with the pure collegiate model and that’s what makes it tough on Phillips too.”

The ACC success initiatives have finally been settled but it took more than a year to achieve agreement.

Could the mediation process take years?

“Well, (what led to this) has already taken several years,” Alford replied. “We knew that. We’re trying to get ahead of it.”

For FSU, the legal process remains necessary to get the declaratory judgement it needs from the court as to whether the contracts are binding.

“We have to ask the question,” Alford said. “As you’ve heard me say, ‘It’s not a relationship problem. It’s a financial problem.’ ”

The lawyers have been busy in August and will have a busy September as well.

The most recent action in North Carolina was on September 3, 2024, a Consent Motion requesting the briefing schedule in both appeals be modified so that the Briefs of Appellant FSU Board and Appellant Clemson shall be filed on or before 15 October 2024, the Brief of Appellee ACC in each appeal shall be filed on or before 15 December 2024, and a Reply Brief of the FSU Board and a Reply Brief of Clemson, if any, shall be filed on or before 15 January 2025

Mecklenburg NC Business Court – https://ncbc.nccourts.org/public/

In August, the Pickens County, SC 13th Judicial Circuit Court handled several matters:

ACC’s Motion to Dismiss – DENIED for lack of personal jurisdiction.

ACC’s Motion to Dismiss – DENIED for abatement or stay

ACC’s Motion to Dismiss – GRANTED for Clemson’s Fifth Cause of Action – DISMISSED without prejudice, which means it can be refiled at a later date.

https://publicindex.sccourts.org/Pickens/PublicIndex/PISearch.aspx

On August 3rd, in the Leon County, Circuit Court, Case 2023 CA 000641, the ACC’s Motion to Dismiss was denied and on August 13, a Joint Notice to Mediate was issued, and will be an on-going matter.

The next action in Florida occurs a week from today on Sept. 11, 2024 with a noon Oral Argument scheduled in the 2nd District Court of Appeals regarding Case 1D2024-1429/ https://2dca.flcourts.gov/

In spite of the public nature of the lawsuit, Alford said Phillips has been reasonable throughout the process.

“He’s a good man, and he’s got a tough situation, tough issue to solve,” Alford said of Phillips. “He’s got 18 partners to keep happy in this and that’s not easy.”

While Clemson and Florida State have been outspoken publicly, the other schools have strong feelings, one way or the other, too.

“You don’t (hear) publicly (because they don’t have) the Sunshine laws,” Alford said. “These same conversations have been going on at several schools. It’s just behind closed doors. At other institutions, they can talk about whatever they want, their board can discuss it and disagree about it, but ours has to be in the public eye.”

This concludes the second part of an exclusive series of stories with Alford the Osceola will run during the football bye week. We’ll share candid remarks by Alford on how FSU will approach new roster limits in various sports agreed to in the proposed House Settlement, the timing on Florida State’s addition of women’s lacrosse and meeting Title IX requirements, with more about the ACC’s success initiatives. We’ll conclude the series with a column from Jerry Kutz with his perspective on these prescient matters affecting collegiate athletics.