The twin legal battles between the Charlotte-based Atlantic Coast Conference and member schools Clemson and Florida State continued in recent days with a decision in N.C. Business Court to make Mecklenburg County the site of the Florida State case while the conference also sought in the same court to seal terms of its media contracts with ESPN.
The motion to seal the contract terms was filed in the ACC’s dispute with Clemson.
Both cases stem from an escalating arms race in college sports that has sent media rights fees soaring for the two most powerful conferences — the Big Ten and the SEC — while the ACC, Big 12 fall farther behind in revenue and lose their most valuable members to the Big Ten and SEC. In 2022, revenue generated by the Big Ten totaled $845.6 million; in the SEC, $802 million; and $617 million in the ACC. Per-school shares were, respectively, $58.8 million, $49.9 million and $37.9 million to $41.3 million.
The ACC and Florida State filed their initial actions against each other in December and subsequent motions have redoubled those claims. Clemson and the conference filed against one another last month.
In each case, the arguments run along similar paths: Clemson and Florida State blame the ACC for negotiating subpar media rights contracts while contending that existing contracts are not binding and that exit penalty fees are onerous and unenforceable.
The decision last week in the ACC-Florida State case sided with the conference to hear the case in North Carolina, where the conference was founded in 1953. Florida State argued, among other things, that it is unlikely to get a fair hearing in the conference’s home state, an assertion rebutted by the judge.
As part of his ruling, the judge granted a motion by Florida State to dismiss a claim by the ACC for relief for “breach of fiduciary duty” by the school.
The conference and Florida State responded by releasing statements praising their partial wins.
“We are pleased with today’s decision, which confirms North Carolina courts are the proper place to enforce the ACC’s agreements and bylaws,” the conference said in a statement issued after the ruling. “We remain committed to acting in the best interests of the league’s members and will see this process through to protect and advance the ACC.”
On Tuesday, Florida State appealed the court venue decision to the N.C. Supreme Court.
Clemson filed its suit in South Carolina and wants to have the case decided there while the ACC is again seeking to have it heard in North Carolina. No ruling has been reached on the venue for the Clemson-ACC dispute.
In a statement provided toCBJafter the decision, Florida State said, “Although it’s highly unusual for a court to dismiss a lawsuit at this initial stage, we are disappointed in the Court’s decision not to dismiss the North Carolina lawsuit. At the same time, we appreciate the ruling today that Florida State could not have breached any supposed fiduciary duties to the ACC by seeking legal relief from the Conference’s gross mishandling of member school media rights. We will continue to aggressively advocate for the University, for FSU Athletics, and for the sovereignty of the State of Florida as these cases proceed.”
The ACC’s motion in the Clemson case to keep secret terms of its agreements with ESPN came, in part, from the Florida State filing in December against the ACC. Terms of the ESPN contract were redacted in the Clemson filing last month.
Florida State breached the confidentiality of those agreements in the December 2023 suit, the ACC stated.
Among other things, the December 2023 suit filed in Tallahassee by Florida State stated that ESPN holds a unilateral option to end the existing contracts with the ACC nine years earlier than the 2036 expiration date. It also includes a rundown of annual rights fees and contractual increases of 4.5% for the most valuable portions of the media agreements.
Florida State, in the December filing, cited the ACC’s “chronic fiduciary mismanagement and bad faith” as harmful circ*mstances that have “undermined … members’ revenue opportunities.”
An ESPN spokesperson declined comment toCBJregarding the motion to keep sealed details of the network’s contract with the ACC.
The ACC’s motion to seal the media agreements states: “As shown by the ever-changing, competitive landscape of collegiate athletic conference realignment, and the fact that there is no evidence that any conference’s media agreements have ever been (1) disclosed publicly, (2) held to constitute public records, or (3) held not to constitute trade secrets, the ACC’s and ESPN’s interests in preserving the confidentiality of these portions of the agreements outweighs any public interest in these documents.”
The motion adds that the ACC regularly reports its overall revenue and distribution per member school as part of its tax filings as a nonprofit. Disclosing the media contract terms, according to the conference, would reveal the ACC’s “most sensitive, proprietary and commercially material agreements.”
According to the motion, the ACC and its member schools have consistently treated media rights contracts as highly sensitive information, with member schools allowed to view them only in-person at conference headquarters and with an agreement that the information is not to be disclosed or shared.
ESPN, in a supporting statement, called the terms of its contracts with conferences and schools “textbook trade secrets” and added that public disclosure “would be destabilizing and harmful” to its business.
The 15-member ACC includes four N.C. schools: Duke, N.C. State, UNC Chapel Hill and Wake Forest.
