Clemson University made news this past week in two spectacular ways. The potential Clemson exit of the ACC took top billing, as the university made it to the Sweet 16 in the NCAA basketball tournament.
WHAT DOES A CLEMSON EXIT MEAN TO THE ACC?
Clemson has taken legal action against the ACC by filing a lawsuit aiming to challenge the league’s Grant of Rights agreement. This lawsuit, filed in Pickens County court in South Carolina, is the second of its kind against the conference, following a previous legal challenge by Florida State.
The school argues that the ACC’s high exit fee and control over media rights following departure are not valid and restrict Clemson from making decisions that are in the best interests of the institution. The lawsuit views the exit fee as unreasonable penalties and damages, especially considering the limited harm caused to the ACC by Clemson leaving the conference. Furthermore, it asserts that Clemson only agreed to give up television rights while being a member of the ACC.
Clemson stated that they have no alternative but to pursue legal action due to the ACC’s stance on Grant of Rights, exit penalties, and member obligations. Clemson clarified that they have not indicated any intention to leave the ACC and are still a member of the conference.
Clemson is requesting a judge to invalidate the Clemson exit fee and give the university full control of its media rights for games played after leaving the league. The university estimates the exit fee at $140 million, excluding the cost to buy out the remaining media rights. Even if the ruling is in Clemson’s favor, there is no guarantee that the university would be invited to join the SEC or the Big Ten if it decides to leave the ACC.
ACC Commissioner Jim Phillips and board chair Jim Ryan are confident that the courts will uphold the agreements between the ACC and its members. All ACC members, including Clemson, willingly signed and re-signed the Grant of Rights in 2013 and 2016, which are legally binding until 2036. Clemson also agreed to the withdrawal process and procedures. The ACC’s legal team will work diligently to enforce the agreements and bylaws for the benefit of both current and future members.
In 2016, the ACC signed a 20-year agreement with ESPN for media rights, which is the longest deal of any power conference with a television network. However, the issue is that the revenue from media rights for the ACC and the Big Ten has not been as high compared to recent massive increases in television contracts. These new contracts could potentially bring in an additional $30 million per school annually in television rights for both leagues.
The choice to file a lawsuit follows the ACC’s approval of a new College Football Playoff contract, which solidifies the league’s position as inferior to the SEC and Big Ten. Under the new contract, the ACC will receive about 17% of the CFP distribution, while the SEC and Big Ten will get 29%. This means that over the six-year contract, each ACC school will receive around $13-14 million, compared to $22 million for schools in the SEC and Big Ten, resulting in a significant overall difference of nearly $60 million per institution.
Clemson is the only team in the College Football Playoff era that has won a national championship and will be receiving a lower level of media rights payment. Should Clemson exit the ACC, will the conference still hold together as a unit?
Florida State took legal action against the ACC in the Tallahassee Circuit Court, claiming that the league did not fulfill its contract obligations by not providing sufficient value in their media rights agreement and by violating Florida’s antitrust laws. The lawsuit argued that the $572 million penalty for leaving the ACC is not legally enforceable.
After being sued by FSU, the ACC retaliated by filing a countersuit against the university and also submitted a motion in February to dismiss Florida State’s case.
BASKETBALL CONFERENCE
Four ACC teams that remain in the Sweet 16 as of this publishing include: North Carolina Tar Heels, NC State Wolfpack, Duke Blue Devils, Clemson Tigers. Clearly, the ACC is a powerhouse basketball conference.
However on Florida State and Clemson are consistent top tier teams playing college football.
Without Florida State and Clemson, the ACC is relegated to becoming a basketball conference at best.
Perhaps the ACC would suffer the same fate at the PAC 12. Stanford and Cal, of the PAC 12, bolted for the ACC. The University of Oregon, University of Southern California, UCLA, and the University of Washington will officially leave the Pac-12 and join the Big Ten Conference starting in 2024.
Could there be a mass exodus from the ACC?
The ACC was founded on May 8, 1953. The history of the conference as a leading basketball conference is unrivaled. However, UCLA was the leading basketball school of the 1960s.
What lies ahead remains to be seen.