Guest Post: Florida State vs. the ACC - Part 2

TwistNHook's continued analysis of FSU's legal hissy fit.

Once again, here’s TwistNHook with more legal analysis, and also one of the sickest legal burns you’ll ever see when he breaks down Count 5. Enjoy! - ed.

In the prior post, we looked at the first portion of the FSU lawsuit.  It included a one sided statement of facts. After going through this one-sided and “on its face” disproven statement of facts, FSU next turns to its Counts. Counts are the specific bases for its lawsuit. This is to say that these are the specific reasons and justifications why the Court should declare the GOR void and/or the withdrawal penalty void.  

Interestingly, “sovereign immunity” is nowhere to be found here. Many fans online were clamoring for this to be involved. If FSU could get out of a contract by stating that laws do not apply to it, then nobody would ever enter into a contract with FSU. Let’s look at what they are actually suing over.

COUNT 1

The first Count is “The ACC Punishments Are Unenforceable Under Florida Law As Unreasonable Restraint Of Trade Under Florida Statute 542.18.”  Quite a mouthful, eh?  This argues that under FS 542.18, the withdrawal penalty is a violation of trade.  FS 542.18 states:

542.18 Restraint of trade or commerce.—Every contract, combination, or conspiracy in restraint of trade or commerce in this state is unlawful.

As you can see, this is a very vague statute.  I am not understanding how the GOR is a contract in restraint of trade or commerce.  The GOR gives FSU money in exchange for rights.  At the time, they were signed, FSU could not have gotten as much individually negotiating its rights as it did by bundling them.  

FSU argues that the penalties seek “to wrongfully prohibit a member institution’s ability to enter into negotiations within the relevant market because it deprives a withdrawing member of its valuable benefits for an undue period, suppresses the market for those media rights, and compromises and inhibits the trade and commerce surrounding those media rights.”  

This only makes sense to the extent that FSU should be able to pawn its media rights whenever it wants in whatever way it wants and any restriction on that is in violation of 542.18. Functionally, however, if that was true, FSU would get no media money. ESPN would not make a deal with any team if it knew it could lose the rights at any point. The stability of bundling its rights with the conference for a lengthy period of time is what convinces ESPN to give hundreds of millions of dollars to each individual school.  

This is especially true given, as noted above, that at the time FSU signed the deal, it was good but not great. If it didn’t want to be tied down until 2036 then it shouldn’t have signed the deal. FSU is not “deprived of the fruits of its labor,” but given hundreds of millions of dollars.  

Another thing to note (and this is consistent throughout the document) is that FSU demands the Court declare the GOR invalid and that FSU traveled back in time and gave notice to withdraw by 8.14.23. This would save FSU approx. $33,000,000 in potential withdrawal fee and/or get them out of the ACC for the 2025 season. Time travel is bizarre.

COUNT 2

Count II is “The ACC Punishments Are unenforceable Penalties.” This basically argues that the withdrawal penalty is a punitive penalty to be used to keep ACC teams from leaving. THAT’S TRUE! They say what happened with Maryland and wanted to tie everybody down. Given what happened to the Pac-12, I would say that the ACC is being smart!  

This count tries to argue that the damage suffered by the ACC by a withdrawing member is wholly disproportionate to the punitive penalties here. FSU cannot, on one hand, argue that it is god’s gift to football and it could be making so much more money elsewhere, but also that it leaving would have no effect on the ACC.  Functionally, if FSU leaves, the ACC may collapse.  

This count does not cite to any law and just generally argues that the withdrawal penalties are really bad.  

COUNT 3

Count III is “The ACC Materially Breached Its Contracts With Florida State.” In this count, they actually have some genuine substance and allegations about what the ACC did. I will paraphrase them here:

1. Failing to maximize profit off of FSU’s media rights to maintain competitiveness.

   1. This partially is true and partially wrong. They have made hundreds of millions for FSU but could make more money. Also, FSU programs are doing great. Women’s Soccer just won a natty and the football team is in the mix for the CFP.  

2. Failing to achieve responsible fiscal management so now the ACC has money problems.

   1. This not really outlined in the lawsuit. They have some vague references to money problems, but the ACC does not have any money problems at all. They have a spectacular TV deal with ESPN. It is just that other conferences have better deals.

3. Mishandling the Unilateral ESPN extension.

   1. This is a fair criticism, if the story is as FSU states. I do not think the ACC should allow ESPN to have an unilateral extension. However, I do not know exactly what the situation is. Separately, this would be a breach of the ESPN media deals, not necessarily the GOR.

4. Amending the 2016 ESPN Agreement without approval of 2/3rds of the schools approving it.

   1. Again, this seems like a fair criticism, if true. That seems like a breach of the ACC Bylaws, not the GOR, however.  

5. Extending “for no consideration” the ESPN option in August 2021.

   1. This is a bit complicated. Under FSU’s statement of facts, ESPN had a trigger date to do the unilateral extension. FSU claims the ACC pushed that back (which is bad for ACC/FSU because it gives ESPN more time to consider its options etc). FSU claims the ACC pushed that back and go “no consideration” (i.e. nothing in return).
      
      This could all be true and could be potentially bad. However, it would relate not to the GOR but the ESPN Media deal. Perhaps this could be a way to undermine and get out of the ESPN deal. This would be good for FSU, because it could be re-negotiated for higher numbers.

6. Committing the ACC to a media deal for 20 years at low rates while failing to secure a commitment from ESPN for the last 9 years

   1. This is non-sensical. The 20 years is only if ESPN extends the deal after 2027, which means that it would include the 2027-2036 years. However, if ESPN does extend then, there is no issue about not having those years.  Additionally, if ESPN does not extend, then ACC can re-sell at higher rates. Additionally, this again goes to the ESPN media deal, not the GOR.

7. Expanding to include the 3 new teams

   1. This is hypocritical insomuch as the ACC needs those 3 teams just in case other teams, like FSU leave.  Putting that aside, given how little $ those teams are taking, this provides further value for FSU. Foolish argument.  

8. Diminishing the members’ ability to compete in championships

   1. This is poorly argued, vague, and doesn’t make any sense. It’s just FSU being BIG MAD they didn’t get into the CFP. Not sure how this relates to a breach of the GOR.

9. Failing to protect the players “right to participate in championships.”

   1. What fucking right do the players have to participate in championships?  FSU lawyers getting pathetic now. Entitled school here.  

As seen, most of these are either wrong, irrelevant, or seeming relate to the breach of other contracts.  

COUNT 4

Count IV is “The ACC Breached Its Fiduciary Duties To Florida State.”  Fiduciary duties are responsibilities that one party may have to another. This count argues that ACC breached these duties. However, it never lists or describes them.  

It states that the ACC owed Florida State “several fiduciary duties especially with respect to securing, protecting, and exploiting the athletic media rights entrusted to it by Florida State and failing to protect and preserve the position of its undefeated football conference champion.” It does not cite to a single Florida Statute outlining what these fiduciary duties are. It does not cite to a single case outlining what these fiduciary duties are. It is just vague and general.

Again, it references the “undefeated football conference champion,” showing that this is a lot of “THE COLLEGE FOOTBALL PLAYOFF WAS MEAN TO US!” Not a lot of meat on this bone.

COUNT 5

Count V is “Fundamental Failure Or Frustration Of Contractual Purpose.” This is a brief count and states, in relevant part, “The ACC has admitted that it has failed in this fundamental purpose and placed the ACC in an existential crisis due to poor fiscal management and administration, which has rendered the ACC financial and fiscally unstable and its members not competitive.”  

Objection, assumes facts not in evidence. When did the ACC admit it failed?  When did it end up in an existential crisis? The Pac-12 had an existential crisis and collapsed. The ACC is set up to be in place at least until 2036.  

It also states that its members are not competitive. Perhaps if you watched the Orange Bowl, you may agree. Overall, however, its members are very competitive. Florida State almost made the CFP, after all.  Not much meat to the bone here, either.

COUNT 6

Count VI is “The ACC GOR is Unenforceable For Several Other Reasons.”  This appears to be a vague catch up. It discusses things like subverting the fundamental right of FSU to withdraw. FSU should have thought about that before signing the GOR extension.  It discusses something called “generalia specialibus non derogant.” This isn’t Harry Potter.  

It states that in forming the GOR provided “no need consideration” to FSU and thus is not an actual contract. If FSU thought it had something here, it wouldn’t be a throw in paragraph in a throw in count. The consideration is the money (more money than if they tried to negotiate independently).  

COUNT 7

Count VII is “The ACC Punishments Violate Public Policy And Are Unconscionable.” This basically is the bottom of the barrel for arguments.  People use these at the end as throw ins. Public policy?  Not sure how college athletics affects public policy. FSU argues that the withdrawal penalties are “monstrously harsh, shocking to the conscience, and the result produces a profound sense of injustice...”

I feel great justice thanks to these penalties! They keep the ACC alive (unlike the Pac-12) so Cal has a conference. Physical assault is “monstrously harsh.”  Contractually agreed upon withdrawal penalties are not monstrously harsh.  

CONCLUSION

Much of this reads like Florida State throwing a big temper tantrum. Its statements of facts range from cartoonishly dumb to wrong to misleading. Its counts include very little actual codes or citations. The times that it actually has a genuine argument do not seem related to the withdrawal penalties.  

The simple truth is that it signed a contract at a time when the facts were different than they are today. FSU wants to out. FSU does not want to honor its contracts, because facts have changed.  It cannot say that, so it is left to the lawyers to try to figure out how to get out of the contract.  

Next up, we will look at the ACC lawsuit. Thanks for reading!