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The ACC is now officially embroiled in a legal battle for its own survival: It faces multiple lawsuits from current members that could invalidate the very contracts binding the conference together.
On Tuesday, Clemson filed a lawsuit against the ACC to ascertain whether the conference’s Grant of Rights (which binds schools to a conference for the lifespan of its media contract) is legally enforceable—and therefore whether Clemson must face a $140 million exit fee to leave the conference.
The news comes just a few months after Florida State filed a similar but more aggressive lawsuit in an attempt to depart the conference without paying the fee or violating the Grant of Rights contract. The ACC preemptively countersued, trying to assert that a different state court has jurisdiction over the case in the hopes that it will rule in the ACC’s favor. (A motion-to-dismiss hearing in that case will take place Friday.) ESPN, while neither a defendant nor a plaintiff in any of this litigation, is involved nonetheless given its assertion that court documents have illegally publicized private information related to media-rights agreements between the conference and network. (The Clemson complaint, reviewed by Front Office Sports, is heavily redacted—presumably to maintain the private nature of ESPN’s contract.)
Clemson’s lawsuit doesn’t allege the ACC committed the same level of negligence as FSU’s lawsuit does. But Clemson is arguing that if it leaves the conference before the Grant of Rights is up in 2036, the school can still retain rights to its games and theoretically bring them along to a new conference. This is exactly the outcome any Grant of Rights attempts to avoid by binding schools together through a media-rights contract, which they can leave only if they pay a punitive exit fee. Clemson holds that the $140 million exit fee, one of the largest in the country, is “unconscionable” and also legally unenforceable (even though Clemson signed on to a contract with that fee confirmed). Lastly, the school argues that no “fiduciary duties” are owed to the conference.
“Each of these erroneous assertions separately hinders Clemson’s ability to meaningfully explore its options regarding conference membership, to negotiate alternative revenue-sharing proposals among ACC members, and to obtain full value for its future media rights,” the school said.
The main motivation for the litigation from both FSU and Clemson is conference realignment—and the pursuit of ever-growing media-rights contracts. Clemson specifically laments in court documents that the ACC is making millions less for its media contract than competitors like the Big Ten and SEC, and that the school should have the right to shop around and see whether it can find a more lucrative conference.
It appears that the ACC’s own comments, both in court documents in litigation against FSU and publicly, have also provided motivation for the lawsuit. “By espousing an inaccurate interpretation of the grant of rights agreements and allowing that interpretation to proliferate throughout the media, the ACC has cast a harmful cloud of doubt on Clemson’s ability to engage in meaningful discussions with other conferences and media providers regarding potential future collaborations and/or to negotiate alternative revenue sharing proposals among ACC members,” court documents say. “For Clemson to move ahead and ensure that it may continue to act in furtherance of its institutional mission, that cloud must be lifted.”
In a statement provided to FOS, the ACC said, “The ACC remains confident that its agreements with all its members will be affirmed by the courts. Clemson, along with all ACC members, voluntarily signed and re-signed the 2013 and 2016 Grant of Rights, which is binding through 2036. In addition, Clemson agreed to the process and procedures for withdrawal. The Conference’s legal counsel will vigorously enforce the agreement and bylaws in the best interests of the ACC’s current and incoming members.”
