Clemson has filed a lawsuit against the ACC in an attempt to break the league’s Grant of Rights agreement. The suit, which was filed in Pickens County (South Carolina) court, is the second such lawsuit against the ACC, joining Florida State’s previous legal action taken against the conference.
The school asserts that the ACC’s exorbitant exit fee and control of media rights after leaving the conference is ultimately unenforceable and prevents Clemson from doing what is right for its institution. The lawsuit frames the ACC’s exit fee as penalties and damages, which ultimately are excessive for the amount of damage caused to the ACC by Clemson leaving the conference. Additionally, it claims that Clemson’s agreement with the ACC only signs over television rights as long as Clemson remains a member of the league.
“The ACC’s position regarding the Grant of Rights, the exit penalty and obligations owed by members to the conference, as detailed in its public statements and other court filings, leaves Clemson with no choice but to move forward with this lawsuit,” Clemson said in a statement. “Clemson has not given notice that it is exiting the ACC and remains a member of the conference.”
In the suit, Clemson is asking a judge to ultimately void the exit fee and grant the university all of its media rights for games that take place after the university opts to exit the league. Clemson calculates the exit fee at $140 million, not counting the number to buy out the remaining decade of media rights. Even if the judgment goes through, however, it does not guarantee that Clemson would receive an invite to either the SEC or the Big Ten if it were to leave the ACC.
“The ACC remains confident that its agreements with all its members will be affirmed by the courts,” ACC commissioner Jim Phillips and board chair Jim Ryan said in a statement. “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.”
The ACC signed a 20-year media rights contract with ESPN in 2016, a deal which extends longer than any other power conference has with a television partner. The larger problem, however, is that media rights revenue numbers have fallen far behind the ACC and the Big Ten, which recently agreed to massive additions to their television contracts. The new contracts could ultimately pay both leagues $30 million per school more yearly in television rights alone.
The decision to sue comes days after the ACC agreed to endorse a new contract for the College Football Playoff that cements the league as a step behind the SEC and Big Ten. The ACC will receive approximately 17% of the next CFP distribution ($13-14 million per school), while the SEC and Big Ten will collect 29% ($22 million per school). The difference over the course of the six-year contract adds up to nearly $60 million per institution.
Clemson is the lone program to win a national championship in the College Football Playoff era that will receive a second-tier media rights payment.
Florida State filed a lawsuit against the ACC in Tallahassee Circuit Court alleging that the league breached its contract by failing to create adequate value in their media rights deal and violating Florida’s antitrust laws. It cited a $572 million penalty for withdrawing from the ACC as “unenforceable.”
The ACC swung back against FSU after the filing, including filing a countersuit against the university. The league filed a motion in February to dismiss Florida State’s case.
CBS Sports’ Dennis Dodd reported in May 2023 that readers of the ACC’s grant of rights have often referred to it as “ironclad.” The contract language mirrors that of the Big 12’s contract, which was ultimately not challenged by either Texas or Oklahoma as they left the league.
Seven ACC schools have come to the ACC office to examine the strength of the grant of rights in the past months. In addition to Clemson and Florida State, Miami, North Carolina, Virginia, Virginia Tech and NC State have also met with legal teams to examine the agreement.
