Florida State Once Again Is Facing An Important Question. Should It Stay In The ACC?

Last week at Florida State University, the Board of Trustees received a sobering report from Athletics Director Michael Alford. His “State of Athletics” presentation could be summarized in one sentence: “When it comes to money, we’re in deep trouble”. How deep? Compared to two other conference peers, when it comes to revenue, they are $30 million a year behind.

Much of their Atlantic Coast Conference colleagues could say the same thing. The Big Ten and the Southeastern Conference’s media rights deals have blown through the $1 billion a year mark, leaving each ACC school with an average annual rights fee of $17 million far behind their wealthier counterparts, according to a chart presented at the trustees meeting.

The role of the Trustees

According to the FSU website, the trustees are “the public body corporate of the university. It sets policy for the institution and serves as the institution’s legal owner and governing board.” With 13 members, it “holds the institution’s resources in trust and is responsible for their efficient and effective use.”

Alford highlighted two “givens” in the world of media rights that media companies structure their contracts on: number of TV households in “your marketplace”, and the “measure of your football/basketball performance” (i.e. wins, national polls, Kenpom ratings, strength of schedule, etc). He asserted media companies like ESPN and Fox rank a school’s value through the success of football and men’s basketball, with football receiving 80% weight, and men’s basketball receiving 20%. “When they go in with these deals, that’s the numbers they are playing with,” he told them.

Deja vu- Florida State was in the same place ten years ago

But the Seminoles have been here before. In 2013, many around FSU were also making noise about leaving the ACC for the SEC (and presumably greener financial pastures). Then President Eric Barron (who departed for Penn State’s presidency in 2014) invited then commissioner John Swofford to campus to calm the waters. Barron wrote back then in an email “We can’t afford to have conference affiliation be governed by emotion — it has to be based on a careful assessment of athletics, finances and academics. I assure you that every aspect of conference affiliation will be looked at by this institution, but it must be a reasoned decision.”

In 2012, an original ACC member, the University of Maryland, announced they were leaving for the Big Ten, stunning both their colleagues and the collective college sports world. The immediate reaction became “who’s next?”, and all realized they had very little binding the conference together legally.

Swofford made multiple trips to Tallahassee in 2013 to try to persuade the Seminole faithful to stay the course and remain in the ACC. Trustee Joe Gruters told the Tallahassee Democrat at the time, “What is on the minds of a lot of people is, is the ACC the conference that gives us the best opportunity to compete over the long term?At the end of the day, I think the ACC negotiated a good deal with ESPN and levels the playing field with the rest of the conferences.”

Another trustee, Mark Hillis, commented, “I was in concert with President Barron that this was the best thing that could happen. It ensures that we don’t lose any members. Nobody can afford to leave now.”

And that’s what the ACC and Florida State wanted for the long term— stability. Later that year, each member of the conference signed a grant of rights, ultimately binding them to the conference until 2035-36. The ACC finally launched their network in 2019, the last of the Power 5 to do so.

Exiting the ACC

Maryland found out just how expensive it would be to buy its way out of the conference. Initially, the remaining members wanted a $52 million exit fee; in 2014, they settled on $31 million. Alford estimated the exit fee today to be $120 million.

But as the folks at Maryland know, a departure can leave a sour taste in the mouths of those left behind; in legal documents, the ACC claimed great ‘fiscal harm’ to the organization’s brand and relevance.

A few unanswered questions loomed large after Alford completed his presentation. Despite arguing that it was time for the ACC to redistribute the wealth to the schools that bring more ‘value” to the conference (i.e. FSU), it’s likely no ACC school would vote to lessen their share.

Here are a few outstanding items for the Board to consider:

• Is Alford’s assessment that media estimates based exclusively on the success of football and men’s basketball completely fair? With the NCAA putting women’s championships out to bid as a separate contract from the men’s CBS/Turner contracts in 2025, the ACC as a conference could do quite well in driving revenues. FSU won the NCAA women’s soccer championship in 2022, and the softball championship in 2018. Women’s basketball is breaking viewership records. There is new media money to be had.
• The ACC will be a significant part of the 12-team College Football Playoff picture. Annual revenues have been projected at $1.2 billion and will largely benefit the participating conferences.
• As the Pac-12 has indicated, there are more ways to gain incremental revenues, including Prime/Apple+ streaming, and adding value to the viewers. Legalized sports betting is gaining ground in many of the states in the ACC’s footprint. Considering the media value of a conference as only the Tier 1 and conference network revenues may be missing the technological and cultural shifts happening.
• The concept of measuring the number of households available in a television ‘market” remains a powerful indicator. In looking at the 2021 Nielsen stats for market size, the largest market in Florida nearest to FSU is Tampa-St.Petersburg with 2.035 million homes, good for 13th nationally. Unless the industry shifts to a different primary metric, its difficult to see how that number will change substantially. There was a reason the Big Ten looked at the Los Angeles market for expansion.

Florida State’s fans, boosters, leaders and trustees are caught in a difficult dilemma. As AD Alford said, “we have to do something…we drive the media value in this conference”.

Emails requesting comment from the Trustees were not returned.

Ten years ago, the ACC managed to keep the Seminoles in the fold by promising stability. Now, with the Pac-12, Big Ten and SEC potentially looking towards a second round of media rights negotiations before 2035-36, the conference grant of rights and the demographic realities have FSU tightly in their grip.

The Division I Transformation Committee highlighted the “big tent” of institutions residing in DI. Situations like the one the ACC finds itself in is a great example of why that approach doesn’t work well. No school wants to admit the athletic landscape doesn’t favor them. As the Committee wrote in their final report:

“While the breadth and diversity of Division I presents challenges, it’s also a fundamental part of the magic that is college sports…breaking Division I apart would damage what is vital and essential about college sports. So long as their universities can meet minimum expectations in terms of the support they provide, ultimately, we want as many student-athletes as possible to start each season with Division I national championship dreams.”

If competitive success matters across the board, the ACC has already established itself as a winner. If the measuring stick remains only how much money your have, it will be tough to compete with the Big Two. In an era where the gap between the haves and have nots continues, one thing is for certain-the Seminoles don’t want to be left behind.