Florida State vs. the ACC: What happened, what you need to know

Florida State appears to be on the cusp of launching the next phase of college football conference realignment, and is set to challenge the ACC in court

After all the speculation, rumors, and direct hints from the school itself, Florida State made things official in the days before Christmas, voting unanimously to challenge the ACC and its grant of rights agreement in court, the first positive step in what could become the next bombshell phase of college football conference realignment. 

The school's board of trustees agreed to sue the ACC over that agreement, and, until now, appeared to be so ironclad as to preclude any member's attempt to get out of it. But with FSU's direct legal challenge, which alleges restraint of trade, breach of contract, and failure to provide on the deal's terms, we'll see if the contract is as strong as advertised.

Here's what you need to know about the process and what could happen next.

Why is Florida State doing it?

It has been known for some time that Florida State was not pleased with the financial situation in the ACC, especially after last year's realignment bonanza that completely re-set the revenue situation in the Big Ten and SEC, with the Seminoles and other schools feeling they were being left behind in the new marketplace.

This past offseason, Florida State was revealed to be one of the so-called "Magnificent Seven" schools that were scouting a possible exit from the ACC's grant of rights agreement that expires in 2036.

Missing out on the College Football Playoff may have been a breaking point of a kind. Although the school denied that was the reason, being the first undefeated Power Five conference champion to be left out of the national semifinal may have elevated existing tensions to the point where it felt compelled to act now rather than later.

But FSU has been fine-tuning its legal arguments — which include the claim that the exit fee violates Florida antitrust law — on a potential challenge to the ACC dating back to this past summer, and it would almost certainly have still pursued the action even if the Seminoles had made the playoff.

At a board of trustees meeting in August, school president Richard McCullough stated outright that he didn't see how it was feasible for Florida State to stay in the ACC "unless there was a major change in the revenue distribution within the conference. That has not happened."

How much will it cost?

Quite a lot, actually. Those officers presenting at the Friday board of trustees meeting estimated that the final cost could approach $572 million to leave the ACC without a win in court or a settlement to their liking.

• The majority of that amount comes from an estimated $429 million in forfeited media rights through the grant of rights' 2036 expiration date, when the league's existing contract with ESPN also expires.
• Around $13 million of that would be in un-reimbursed broadcast TV fees.
• And the estimated $130 million exit fee to the ACC for leaving prior to 2036

Reports have indicated dating back to last summer that Florida State could turn to a private equity investment to make up for any lost monies in that time.

Can Florida State win?

Legal experts are unsure of what the school's chances are of winning in court. Some suggest there may be possible legal arguments that could negate the deal, but no school has tried to in the modern era, and there's no guarantee how a judge would interpret those arguments.

Of course, Florida State wants the case to be resolved in a way that completely negates the grant of rights and the exit fee. But in reality, even if that should happen, the ACC would almost certainly appeal, or other member schools could file lawsuits.

Given that, the most favorable outcome could be that Florida State works out a negotiated exit fee.

What happens to the ACC if Florida State exits?

Given what happened to the Pac-12 last summer and the complete dissolution of that conference, it's a worthwhile question. But it's not believed that most other ACC schools would have a valuable-enough option in other conferences to warrant a mass exodus of that kind.

Plus, should there be any other departures — Clemson, Miami, and North Carolina are the other big names — the remaining members may prefer to stay in the conference as money from the subsequent exit fees would be incentive to stay put.

How long will this take?

Given the incentives they have — Florida State to get more revenue elsewhere, and the ACC to retain one of its biggest brands — neither side is likely to stop the process without serious involvement. Insiders suggest it could take two or three years.

Where would FSU go?

Either the Big Ten or the SEC would make the most sense. For the Big Ten, adding the Seminoles would expand the league's market and recruiting reach into the Southeast, directly into SEC territory. And for the SEC, it would add another brand in the South, even if it does bother Florida.

But if neither conference is willing to expand whenever Florida State would theoretically become available, the Big 12 could enter the picture. 

Not at all shy about expanding its reach — it will absorb four former Pac-12 schools starting next summer — that league would almost certainly entertain adding such a school to its portfolio.

What's next?

The day before Florida State made its decision, the ACC proactively filed a declaratory action in defense of its grant of rights agreement, the league, and its members. Going forward, there are a few outcomes that could happen, including —

• Summary judgment, in which a judge decides the outcome of the contract;
• Mediation, where Florida State and the ACC try to work out their dispute;
• Jury trial, or;
• The judge could just dismiss the case based on the fact that Florida State signed the contract

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