Florida State, Clemson and the ACC Grant-of-Rights Fight

Timeline

1. Apr 2013ACC members, including FSU, sign a grant of rights tied to the ESPN agreement.
2. Jul 18, 2016Members sign an amended grant of rights, extended through 2036, as ESPN launches the ACC Network partnership.
3. Sep 1, 2023The ACC admits Cal, SMU and Stanford over the opposition of Clemson, FSU and North Carolina.
4. Dec 21–22, 2023The ACC sues FSU in North Carolina; the next day FSU's trustees sue the ACC in Florida.
5. 2024Clemson sues the ACC; litigation proceeds in three states.
6. Apr 2024A North Carolina court lets the ACC's suit proceed; a Florida judge orders FSU to amend and orders mediation.
7. Jul 17, 2024The ACC agrees to give Florida's attorney general redacted ESPN contracts, ending her public-records suit.
8. Mar 4, 2025The ACC, Clemson and Florida State announce a settlement.

The ethical issues

• Binding commitments versus the freedom to leave.
• Equal revenue sharing versus rewards for popular programs.
• Fiduciary duties of a conference to its members.
• Solidarity with smaller members versus competitiveness of top programs.
• Transparency of media-rights negotiations.

Stakeholders

Stakeholder	Interests & obligations
Florida State and Clemson	Revenue, competitiveness and freedom to move.
Other ACC members	Conference stability and their revenue shares.
The ACC	Keeping members and its media deal.
ESPN	Its media-rights agreement.
Athletes, fans and states	Competitive programs and rivalries.

The case

On December 22, 2023, Florida State University’s Board of Trustees sued the Atlantic Coast Conference (ACC) in Leon County Circuit Court, accusing it of restraint of trade, breach of contract and failure to perform, and challenging its withdrawal penalties.^[1] The ACC had filed first: late the previous afternoon it sued FSU’s trustees in Mecklenburg County, North Carolina, seeking a declaration that its media rights agreements were valid and enforceable.^[4] The fight was over a contract that bound schools’ television rights to the conference long after they might want to leave.

Background

The ACC, founded in 1953, expanded repeatedly; Florida State joined in 1991.^[4] In 2012, according to the North Carolina court’s summary of the ACC’s complaint, conferences “began to experience significant instability and realignment.” Maryland announced it was leaving, the ACC added four new members, and its board voted to sharply raise the fee for leaving. In 2013, the ACC and ESPN extended their media agreement through 2027.^[4]

According to FSU, the ACC’s ESPN deal set annual payments for nationally broadcast football through 2027, and members received roughly $33 million each in certain payments. The ACC then gave ESPN a unilateral option to extend to 2036 without additional compensation, while rival conferences negotiated shorter, more lucrative deals and opened “a revenue gap of tens of millions of dollars a year.”^[1]

On September 1, 2023, the ACC admitted Cal, SMU and Stanford, effective in 2024, creating what it called “a true national conference that spans coast to coast.”^[6] CBS Sports reported that the bylaws required 12 of 15 votes; Clemson, Florida State and North Carolina opposed, after NC State reportedly switched to support. It also reported that Stanford and Cal would take reduced revenue shares and SMU would forgo ACC media revenue for nine years.^[7] FSU’s complaint said the ACC had rushed to admit “three new schools with weak media rights values.”^[1]

The rules and governance

The grant of rights. In April 2013, members including FSU signed a Grant of Rights Agreement that “irrevocably and exclusively” granted the conference the rights needed to perform the ESPN agreement, “regardless of whether such Member Institution remains a member of the Conference during the entirety of the Term.”^[4] In 2016, ESPN agreed to launch the ACC Network on condition that each member extend that term. Members, including FSU, signed an amended grant of rights on July 18, 2016.^[4] FSU said it agreed based on the ACC’s verbal claim that ESPN had threatened to walk away otherwise.^[1]

The withdrawal penalty. FSU valued the media rights it would forfeit through 2036 at $442 million or more. Combined with a withdrawal fee of three times the annual operating budget, about $130 million, FSU said leaving would cost at least $572 million.^[1] Trustees chairman Peter Collins called it “an astounding and pernicious half-billion-dollar penalty.” FSU’s complaint also cited the College Football Playoff’s “stunning decision” to exclude the undefeated Seminoles as evidence that the conference had “negotiated itself into a self-described ‘existential crisis.’”^[1]

The litigation

On April 4, 2024, North Carolina’s chief Business Court judge denied FSU’s motion to dismiss or stay the ACC’s case, except for a breach-of-fiduciary-duty claim. He found that FSU had waived sovereign immunity for the suit and that factors including the applicable law and the ACC’s choice of forum outweighed FSU’s preference for Florida.^[4] In Florida, Judge John C. Cooper dismissed FSU’s complaint without prejudice so that FSU could amend its jurisdictional allegations and ordered the parties to begin mediation within 120 days. “Both sides have an interest in seeing if there’s any way this dispute can be resolved quickly,” he said.^[5]

Clemson filed its own suit, seeking clarity that a departing member leaves with its future media rights “free and clear” once it pays the exit fee.^[3] Suits were pending in Florida, North Carolina and South Carolina.^[2]

The settlement

On March 4, 2025, the parties announced a settlement. Clemson and Florida State remain full members, and all pending suits were to be dismissed.^[2] Clemson said the deal establishes a new exit fee schedule that starts at approximately the current fee and drops by $18 million a year to $75 million from 2030–31, and confirms that a departing member keeps its future media rights after paying.^[3] The ACC added a revenue pool based on football and men’s basketball viewership, building on earlier “success initiatives.”^[2] Clemson projected it could earn an additional $120 million over six years, plus College Football Playoff revenue.^[3]

The fight over the contracts themselves

Much of the dispute concerned documents that few people outside the conference had seen. In April 2024, Florida Attorney General Ashley Moody sued the ACC under the state’s public records law, alleging that it was withholding its ESPN contracts.^[9][10] The conference’s position was that “as a private nonprofit association formed and operated by public and private universities from across the country, we do not believe that our own records are subject to those laws.”^[10] Days before a scheduled July 22 hearing, the two sides agreed that the ACC would voluntarily produce redacted copies, “while fully preserving their legal positions,” and that the attorney general would dismiss the suit.^[10] The production ran to more than 250 pages: the 2010 agreement and its amendments, the 2016 restated agreement, the ACC Network agreement and a 2021 letter amendment. The ACC withheld what it called trade secrets, including how much ESPN pays.^[9][10] FSU’s lawyers already had unredacted copies under a protective order limiting their use to the litigation.^[10] The episode left a question unresolved: a conference made up partly of public universities had kept its central revenue contracts confidential while asking a court to enforce them against one of those universities.^[9][10]

What the settlement changed

Reporting on the settlement filled in terms that the joint release left general. According to ESPN, the grant of rights stays in place through 2036. The exit fee becomes $165 million from the following year and declines by $18 million a year to $75 million in 2030–31, and any school that pays it “can leave with its media rights intact.”^[11] Under the previous terms, a school leaving before June 2036 would have owed about three times the operating budget and would also have lost its media rights through the end of the grant. FSU’s attorneys had said that could mean paying as much as $700 million.^[11] ESPN noted the timing: the Big Ten’s, Big 12’s and College Football Playoff’s next media deals come up for renewal around the time the fee bottoms out.^[11]

The new “brand initiative” assigns 60% of ACC television revenue by a five-year rolling average of viewership, weighted toward recent seasons, and splits the other 40% equally.^[11] FSU’s athletic director had proposed a similar viewership-based model to the ACC board in February 2023 and found “no support for the move at that time.”^[11] FSU’s trustees chairman said the settlement “successfully addresses every issue we passionately advocated for.”^[8] A case filed partly as an antitrust challenge to an exit penalty therefore ended with a lower, declining exit price and an unequal revenue formula. The underlying contract was not struck down.^[1][8][11]

Aftermath

ACC commissioner Jim Phillips said the structure showed “the ACC embracing innovation and further incentivizing our membership based on competition and viewership results.”^[2] FSU’s president said the best solution enables every ACC school “to earn enhanced revenue through performance.”^[2] The deal kept the conference intact. But by confirming a priced path out and paying more to the most-watched programs, it left open whether the ACC would remain a partnership of equals.^[2][3]

The core dilemma

Members made a long-term commitment that protected the conference, but the market shifted, leaving top programs behind rivals. The settlement eased exit and rewarded popular programs. Did that balance loyalty, fairness and competitiveness?

Competing values

• Keeping promises vs. adapting to changed circumstances.
• Equal sharing vs. performance-based rewards.
• Conference stability vs. member freedom.
• Collective strength vs. individual ambition.

Strongest arguments

For FSU and Clemson: the conference failed to maximize revenue, and penalties trapped members unfairly.

For the ACC and other members: members agreed to the terms, and stability protects everyone, including smaller schools.

On the settlement: it preserved the conference but may widen gaps between members and make future departures easier.

Applying the frameworks

Justice

A justice lens asks whether revenue distribution and exit terms fairly reflect members’ contributions and needs.

Kantian ethics

A Kantian lens asks whether challenging a commitment one freely made respects the duty to keep promises, and whether the promise was made on accurate information.

Utilitarianism

A utilitarian lens weighs the benefits of stability against the costs of holding top programs back.

Walk it through: the Simple Decision Model

1. Spot the issue. You are an FSU trustee in 2023. Stakeholders include athletes, fans and other ACC schools. Less visible are taxpayers and students. The codes are the ACC constitution and contracts.
2. Gather facts. What do the contracts say and what is the revenue gap? Beware overstating your alternatives.
3. Test options. (a) Sue. (b) Negotiate within the conference. (c) Accept the status quo.
4. Check codes and law. Check contract law and fiduciary duties.
5. Decide and document. Record reasons and costs.
6. Communicate and follow up. Explain to stakeholders and revisit.

What’s settled and what’s contested

• Settled: the lawsuits and the March 2025 settlement terms announced by the parties.
• Contested: whether the original grant of rights was fair; whether viewership-based distribution helps the conference.

Why this case matters

The ACC fight shows how media money reshapes college sports and strains the bonds among conference members.

Key terms

Commercialization

The process of turning sport into a product and a business enterprise, with profit pressures that can compete with principle.

Distributive justice

Fairness in how scarce opportunities, resources, benefits and burdens are shared.

Stakeholders

Everyone with something at stake in a decision: athletes, coaches, parents, officials, fans, employees, sponsors, media, communities and regulators, including the less visible ones.

Principal–agent problem

When those acting on others’ behalf (agents such as executives, officials or agents) have interests that diverge from the people they serve.

Trust

The public’s belief that what they are watching is real. Integrity failures are ultimately failures of trust.

Definitions from the Ethics Cases glossary.

Discussion questions

1. FSU agreed to the grant of rights in 2016. Was it fair to challenge it later?
2. Is a viewership-based revenue pool fair to smaller ACC members?
3. What duties does a conference owe its members when negotiating media deals?
4. Should exit fees exist at all in conferences of public universities?

Sources

1. Florida State trustees sue ACC for mismanaging media rights and imposing 'draconian' exit fees (news release, Dec. 22, 2023) — Florida State University
2. ACC, Clemson, and Florida State settle litigation — Atlantic Coast Conference
3. Clemson University Board of Trustees authorizes settlement of athletic litigation — Clemson University Athletics
4. Atlantic Coast Conference v. Board of Trustees of Florida State University, 2024 NCBC 21 (N.C. Super. Ct. Apr. 4, 2024) — North Carolina Business Court
5. Leon County judge sides with ACC amidst FSU lawsuit, but case is just getting started (Apr. 23, 2024) — Sports Illustrated (NoleGameday)
6. The Atlantic Coast Conference welcomes the University of California, Berkeley, Southern Methodist University and Stanford University as new members (Sept. 1, 2023) — Atlantic Coast Conference
7. Stanford, Cal, SMU join ACC: Conference membership growing to 18 schools — CBS Sports
8. ACC, Clemson, and Florida State settle litigation, with statements from FSU leadership (Mar. 4, 2025) — Florida State University
9. Atlantic Coast Conference turns copies of its agreements with ESPN over to Ashley Moody — Florida Politics
10. FSU lawsuit: ACC to provide redacted copies of ESPN deals to Florida (July 17, 2024) — Tallahassee Democrat
11. ACC, Florida State, Clemson reach revenue distribution settlement (Mar. 4, 2025) — ESPN