FSU fires warning shot at ACC Something needs to change

FSU fires warning shot at ACC: ‘Something needs to change’

The Florida State Board of Trustees meeting sounded like a warning shot at the ACC: fix the massive revenue gap between the SEC and the Big Ten, or else.

“At the end of the day, something has to change for the state of Florida to compete statewide,” said Seminoles athletic director Michael Alford.

Something has to change because the status quo is not sustainable for a national championship program.

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The numbers Alford presented are striking. The SEC will soon be making $811 million a year from its new ESPN/ABC deal. Big Ten contracts are closer to $1.1 billion. The ACC is far behind at $240 million. To make matters worse, the ACC’s deal doesn’t expire until 2036, after the Big Ten and SEC get another chance to negotiate an even bigger payday before the ACC.

Factor in everything else that goes into conference payouts, and Alford said FSU faces a $30 million annual gap that could stretch for more than a decade.

“Ultimately, if something isn’t done, we can’t be $30 million behind our competitors every year,” Alford said.

So what can you do?

The state of Florida accounts for about 15% of the ACC's TV value, Seminoles athletic director Michael Alford told the board of trustees.The state of Florida accounts for about 15% of the ACC’s TV value, Seminoles athletic director Michael Alford told the board of trustees. [ PHIL SEARS | AP (2022) ]

Alford is urging the ACC to change the way it gives teams money. According to his figures, FSU contributes about 15% of the ACC’s media rights value due to its strong TV ratings, football/basketball success and large domestic markets. But the Seminoles, as one of 14 full members of the conference, only get 7% of the distributions.

Rather than split TV revenue evenly, Alford proposed a new model based in part on performance and brand power.

“I know it won’t fill that (gap),” Alford said, “but what can it fill?”

Alford also said if the Pac-12 collapses because the Big Ten/Big 12 expand again, a new window could open for media rights discussions.

As Alford painted a bleak financial picture for the trustees, the meeting turned to an implied but unspoken question: what if that income can’t be balanced in the ACC?

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A trustee asked if a buyout to exit the ACC was “even feasible.”

“That’s an excellent question,” said Carolyn Egan, FSU’s vice president of legal affairs and general counsel.

Egan said the ACC’s exit fee is three times its annual operating budget. That’s about $120 million.

If FSU could raise $30 million a year, one trustee asked, does that mean the Seminoles would break even in about four years?

“Hypothetically,” Alford said.

The full answer depends on the grant of rights. ACC schools have granted the conference the TV rights to their home games through 2036. The ACC then redistributes this revenue back to the teams. If the FSU cannot find a legal escape valve, the Seminoles face the loss of hundreds of millions of dollars.

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The grant of rights itself was not discussed during the meeting and it is unclear how or if the FSU would challenge them.

However, it is clear that television revenue is a major talking point at the highest levels of FSU, including Alford, Egan and President Richard McCullough.

“We have to do something,” said CEO Peter Collins.

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