FSU voices financial frustrations, discusses ACC exit: “We are not satisfied”

Florida State is drawing the line in the sand.

As conference realignment chaos continues to bubble, specifically as the Pac-12 tries to solidify its future, FSU is putting forth its conditions for staying in the ACC.

“We currently, as you all know, face a very difficult situation,” Florida State University president Richard McCullough said on Wednesday during a board of trustees meeting. “We are seeing large media deals made with places like the Big Ten and SEC, creating what may be an exaggeration, but is an existential crisis for Florida State.”

“We are not satisfied with our current situation — we love the ACC, our partners at ESPN. Our goal would be staying in the ACC, but staying in the current situation is hard for us to figure out how we remain competitive unless there was a major change in the revenue distribution within the ACC itself.”

“We are one of the best media-valued teams in the United States. We, along with Clemson and others carry the value of the ACC — no offense to my colleagues, that’s just the number.”

“Without increasing revenue, we will face major challenges in being able to compete in football. The landscape is changing dramatically — NIL, coaching salaries, attractive facilities.”

“FSU helps to drive value and will drive value for any partner, but we have spent a year trying to understand how we might fix the issue. There are no easy fixes to this challenge, but a group of us have spent literally a year. We’ve explored every possible option that you can imagine. The issue at hand is what can we do to allow ourselves to be competitive in football and get what I think is the revenue we deserve?”

“My current assessment of the situation after very deep analysis is that I believe FSU will have to at some point consider leaving the ACC unless there was a radical change to the revenue distribution.”

Other board of trustees members were much more targeted in their words, with former Florida State quarterback Drew Weatherford asking the rhetorical question: “Do we want to play games moving forward, or do we want to compete?”

“I’ve thought about this a lot as an ex-player, as now board of trustee member, and the simple fact is the cost of playing at the highest level is outpacing the ACC’s ability to compete on a regular basis,” he went on to add. “For me, it’s not if we leave [the ACC], it’s how and when.”

Trustee Justin Roth remarked that staying in the conference would be “equivalent of a death by 1,000 cuts and each cut is a $30 million cut over the next 13 years,” saying that in an ideal world, the school would announce a plan before August 15th, 2023 in order to be able to join a new conference by 2024.

“Ideally we can come up with something before that, probably unlikely, but I don’t think it’s unrealistic [for our goal to be], within the next 12 months, we have an exit plan and we execute it.”

With the Oklahoma Sooners and Texas Longhorns paying $50 million to leave the Big 12 and join the SEC in 2024, the same season that the Big Ten is set to welcome USC and UCLA, the impetus for Florida State to position itself for future success has reached a boiling point.

The key issue for FSU, as a reminder, has been the ironclad Grant of Rights (GOR) that all ACC teams re-signed in 2016. The agreement “irrevocably and exclusively grants to the conference during the term all rights necessary for the conference to perform the contractual obligations of the conference expressly set forth in the ESPN agreement,” which basically means any money a school makes from a TV broadcast belongs to the ACC until 2036.

Alford, after being asked by a board member earlier in the year about the financial toll of leaving the conference, said “hypothetically” it was possible that FSU would break even within four years with the increased revenue from leaving the ACC.

What would it take to leave the conference? According to ESPN:

To get out of the league, Florida State would have to pay a $120 million exit fee and go to court to challenge the existing grant of rights, which gives the ACC media rights for its member schools through the length of the contract.

No school has gone to court yet to challenge the grant of rights, which exists in every Power 5 conference. Florida State, along with other schools in the ACC, has studied the contract language in the grant of rights for more a year.

In an interview with ESPN earlier Wednesday, Florida State athletic director Michael Alford said, “We have a great understanding of what opportunities there are in that document. How that document could hold us back, but also what the opportunities are. So this is going to be a discussion. We’ll keep getting legal advice. Our legal team has a good understanding of that document.”

It was reported on Wednesday, in the wake of the Pac-12’s apparently less-than-impressive pitch to its member schools, that the Big Ten has begun exploratory discussions about expanding membership to 18-20 teams.

The schools from the Pac-12 reportedly being considered are Oregon, Washington, Cal and Stanford, while the conference is also keeping an eye on what’s unfolding within the ACC according to Action Network’s Brett McMurphy.

Florida State has been at the forefront of advocating for revenue remedies, with athletic director Michael Alford the face of the campaign, speaking assertively at multiple FSU board of trustees meetings as well as in interviews with the media — including Tomahawk Nation:

“We understand, especially at Florida State and a couple of other institutions, really understand the commitment of that gap that’s coming. It’s a freight train. That’s barreling down the tracks... I’m very involved and looking at solutions. Because I can’t sit here. And for five years, it’d be 30 million behind every year. It’s not a one-year thing. And that makes a big difference, especially when you start compounding that year after year after year.”

“I need to protect Florida State University, and make sure that we’re doing everything we can to make sure that we’re able to compete nationally. And I’m not talking just football, everyone is going to immediately go there. And I agree. But you know, one thing that’s great about our institution and the culture of our institution is we expect national championships across the board. We want to compete in everything we do... With that revenue gap, you’re going to see maybe some decisions that that we have to make that won’t allow that... want to protect that student-athlete experience, what we’re able to offer them and how they’re able to grow during their time here as much as I can. And that’s the driving factor behind it.”

Florida State’s failing to receive revenue splits equivalent to its name-brand peers in other conferences sticks out even more when considering numbers previously shared by Alford showing that FSU would rank No. 3 in both the SEC and Big Ten for revenue generated before conference distributions showing that FSU would rank third in the SEC in revenue generated — ahead of schools like the Alabama Crimson Tide, LSU Tigers and Florida Gators.

When comparing against Big 10 schools, Florida State ranks third, behind the Ohio State Buckeyes and Michigan Wolverines but ahead of the Penn State Nittany Lions, Iowa Hawkeyes, Wisconsin Badgers, and others.