Hayes: As conference expansion talk grows, keep an eye on FSU
This has always been about money. So let’s begin with that framework.
A lot more money than anyone is willing to lose to get out of the ACC.
“Something has to change,” FSU athletic director Michael Alford said Friday during a meeting of the university’s Board of Trustees.
That change comes 1 of 2 ways: An enterprising attorney (or attorneys) finds a way through what looks like an ironclad ACC media rights contract, or the rest of the ACC suddenly feels generous.
But what university president in their right mind would give more money to FSU and Clemson — the strength of the ACC media rights deal — when they have zero leverage?
Breaking free of the ACC also assumes FSU (or anyone else) has a conference that’s interested in offering an invite. So the change Alford speaks of then returns to money — lots of it.
He was asked by the board of trustees what it would cost FSU to buy its way out of the ACC. He said $120 million.
That doesn’t include the 12 years of media rights revenue FSU would have to give the ACC (until 2036) — because the ACC, by contract, owns the rights of every school in the league.
What does that mean, you ask? More money than anyone could imagine.
Let’s say FSU pays the exit fee of $120 million (and that’s not a given amount, either) to join the Big Ten in 2024. FSU would then be forced to give the $60 million it would earn in 2024 as a member of the Big Ten to the ACC — which holds its media rights.
In 2025, the new Big Ten deal increases significantly, and that means FSU would then earn $90-100 million per year through 2029 (the end of the Big Ten deal). That’s $450-500 million for those 5 years — all given to the ACC.
When the Big Ten then renegotiates another deal, whatever FSU would make over the next 6 years (likely much more) would also be given to the ACC.
It’s not hard to connect the dots and come up with a price tag of more than $1 billion to leave the ACC early.
The grant of rights deals could be mitigated through legal agreement (a long process), and typically have been valued at no lower than 65 percent. Still, a ton of money.
Want to know why Texas and Oklahoma didn’t leave for the SEC 2 years ago when they first announced plans? Their media rights were tied to the Big 12 until the end of the 2024 season.
Ira Schoffel of Warchant last weekend asked Peter Collins, chair of the FSU Board, about the grant of rights, and Collins said, “We have a very good handle on the grant of rights.”
Which is to say, they have no “handle” on it.
If grant of rights deals were vulnerable in court, Texas and Oklahoma would’ve already paved the way for FSU or anyone else in the ACC. They not vulnerable, period.
FSU is simply posturing because it has no alternative, floating the idea of legal action that isn’t reality. Can you blame them?
According to Alford, FSU and Clemson account for a quarter (24 percent) of the television revenue for the ACC, but share the revenue equally with the remaining 12 schools.
By 2025, FSU will earn an estimated low $40s million from the ACC media rights deal. Its state rival Florida will earn an estimated $90-100 million from the SEC deal.
The ACC schools have no one to blame but themselves for their current untenable situation. When the ACC restructured its deal with ESPN in 2016, the agreement birthed the ACC Network and locked the conference into an ESPN-friendly deal.
The ACC was so desperate to keep pace with the SEC (see: SEC Network), it signed a deal that established incremental growth for the next 20 years. The ACC wanted stability and its own network, and the schools were willing to do anything for it — including granting their media rights to the ACC through the length of the contract.
Those rights, of course, legally locked in the 14 teams for 20 years.
So now we circle back to the FSU Board of Trustees meeting last Friday, where Alford — a marketing whiz at Alabama and Oklahoma (and the AD at Central Michigan) prior to coming to FSU — laid out the future of FSU sports to the most important power brokers at the university.
FSU will earn $40-ish million annually, and will constantly chase the 32 schools in the Big Ten and SEC, that will earn nearly double that. So he took a stand during a public board of trustees meeting and called out the ACC for its undervalued media rights deal.
Then made veiled threats to leave the conference. Then answered questions about the cost of leaving the conference.
Missing from that public board meeting, not surprisingly, was any discussion of the grant in media rights until 2036. If FSU can’t find a way out of the contract, it better come up with cash.
More than anyone is willing to lose.