Thursday, May 30, 2024

Judge denies motions by Florida State to dismiss ACC lawsuit, likely keeping case in North Carolina

A North Carolina judge denied two motions filed by Florida State to dismiss or stay a lawsuit from the ACC, marking a notable win for the conference in its ongoing legal battle with FSU. The ruling will likely allow the lawsuit to proceed through North Carolina courts, where the ACC is headquartered, rather than in Florida. At stake is more than $500 million that Florida State could be ordered to pay if it leaves for another conference before 3036 in violation of the conference’s grant of rights. 

“We are pleased with today’s decision, which confirms North Carolina courts are the proper place to enforce the ACC’s agreements and bylaws,” said the ACC in a statement. “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.”

Florida State’s Board of Trustees unanimously voted on Dec. 22, 2023, to file a lawsuit against the ACC challenging its grant of rights; however, the ACC preempted this move with a lawsuit of its own the day before, accusing Florida State of breach of contract. 

“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,” Florida State said in a statement following Thursday’s decision. “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.”

At issue is the ACC’s withdrawal penalty, which would cost Florida State $572 million — $130 of which would be drawn from TV revenue — if it chooses to leave the conference before 2036. The ACC grant of rights is meant to keep schools tethered to the conference. Its media rights agreement with ESPN runs through 2027 with a unilateral right to exercise a nine-year option through 2036. 

Florida State’s lawsuit asserts that the penalty is unenforceable and that the ACC breached its contract with the university for failing to create proper media rights value. 

Clemson recently filed its own lawsuit against the ACC challenging the grant of rights, though the university ensured in a press release that it has not given notice that it is exiting the conference. The ACC immediately defended its grant of rights upon Florida State’s initial filing. 

“Florida State’s decision to file against the conference is in direct conflict with their longstanding obligations and is a clear violation of their legal commitments to the other members of the conference,” the conference said in a statement. “All ACC members, including Florida State, willingly and knowingly re-signed the current Grant of Rights in 2016, which is wholly enforceable and binding through 2036. Each university has benefited from this agreement, receiving millions of dollars and neither Florida State, nor any other institution, has ever challenged its legitimacy.” 

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