FSU will may leave ACC without ‘radical change’ to revenue model
Published 1:42 am Thursday, August 3, 2023
The Associated Press
Florida State President Rick McCullough believes the Seminoles will have to consider leaving the Atlantic Coast Conference unless there is a “radical change to the revenue distribution.”
McCullough made his remarks at a board of trustees meeting Wednesday, stoking more speculation that FSU is poised to break a grant of rights deal with the ACC and join another league.
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“We are not satisfied with our current situation,” McCullough said. “We love the ACC and our partners at ESPN. Our goal would be to stay in the ACC, but staying in the ACC under the current situation is hard for us to figure out how to remain competitive unless there were a major change in the revenue distribution. That has not happened.”
McCullough said he, athletic director Michael Alford and others have spent a year trying to “fix the issue.”
The ACC distributed an average of nearly $39.5 million per school for full members for the 2021-22 season compared to $49.9 million for the Southeastern Conference and $47.9 million for the Big Ten. That gap is expected to grow to $30 million a year once the power conferences add Oklahoma and Texas (joining the SEC) and UCLA and USC (joining the Big Ten).
And with the ACC mired in a TV deal with ESPN that lasts through the 2036 season, there’s no foreseeable way to close a gap that could see ACC schools fall more than $400 million behind some of their counterparts.
That kind of shortfall would hinder any school’s ability to keep pace in an arms race that includes recruiting budgets, facility improvements, support staffs and coaching salaries. No one in FSU’s virtual trustee meeting, however, suggested how the school might leave its current conference.
“I don’t think anybody at this table wants to be in this position to have to make the decision to go where we have to go,” trustee Vivian de las Cuevas-Diaz said. “Having this deficit, it’s huge. … To me, I guess it’s just sad to have this conversation. And part of it is as a fiduciary to this university, it’s how do we do this eloquently, properly and ensure that we put Florida State in the best hands possible.
“If we have to exit because we can’t make it work, we just have to make sure we do what’s right by this university.”
To bolt the ACC, any school would need to pay an exit fee of three times its annual revenue (approximately $120 million) and would need to navigate the grant in media rights to the ACC to be able to broadcast future games. If not, all TV revenue a school generates from a new conference would have to be paid back to the ACC.
“We have to keep our lifeline going,” trustee Deborah Sargeant said. “We don’t want to have to do this, but we have to do what it takes to compete. I think we need to believe in ourselves and what we have.”
Added trustee Justin Roth: “We would all love if every single planet aligned perfectly and tomorrow our TV contract ended and all three conferences or more conferences were offering us a deal and we could figure out what we want to do. But no matter what we do, that timing’s not going to line up.
“For us, the alternative of just staying in this conference for the next 13 years and trying to wait for that perfect alignment of the stars is the equivalent of a death by a thousand cuts. And each cut is a $30 million cut over the next 13 years. It’s one thing to take a $30 million cut last year and it’s another to take another one this year. But to do this for 13 years?”
At least seven ACC schools — Clemson, Florida State, Miami, North Carolina, North Carolina State, Virginia and Virginia Tech — have had discussions about breaking the grant-of-rights deal — a document that ties the conference together through 2036.
Conference ADs and presidents responded at the league’s annual meeting in May by agreeing to consider a revised revenue-distribution model that would benefit the most successful teams beginning with the 2024-25 school year. The proposal would send a larger share of postseason revenue to the teams participating in those events rather than dividing it equally.
The tweak would coincide with the start of the expanded (and more lucrative) College Football Playoff. If you make the CFP, you get a larger share. The men’s NCAA Basketball Tournament also would be divvied up based on performance, with deeper runs being rewarded.
Alford, FSU’s AD, suggested the revisions could lead to more than $10 million annually in extra revenue for a school. But even that would leave the ACC’s top programs well behind the Big Ten and SEC.
“It’d be tough to run any other kind of company like this,” FSU board chairman Peter Collins said.