FSU fires warning shot at ACC: ‘Something has to change’

The meeting of the Florida State Board sounded like a warning shot to the ACC: Fix the huge revenue gap between the SEC and the Big Ten, or else.

“At the end of the day, Florida State has to compete nationally. Something has to change in the future,” said Michael Alford, Seminoles athletic director.

Something has to change because the status quo is unsustainable for a national championship program.

The figures presented by Alford are striking. The SEC will soon make $811 million a year from its new ESPN/ABC deal. The Big Ten’s contracts are closer to $1.1 billion. The ACC lags far behind at $240 million. To make matters worse, the ACC’s deal doesn’t expire until 2036, after the Big Ten and SEC another chance to negotiate an even bigger payday before the ACC.

Factor in everything else that goes into conference payouts, and Alford said FSU faces a $30 million annual gap that could stretch for more than a decade.

“Ultimately, if something isn’t done, we can’t be $30 million behind our peers every year,” Alford said.

So what can be done?

Alford is urging the ACC to change the way it gives money to teams. According to its figures, FSU contributes about 15% to the value of the ACC’s media rights because of its strong TV ratings, football/basketball success, and large domestic markets. But the Seminoles only get 7% of the distributions as one of the conference’s 14 full members.

Instead of splitting TV revenue equally, Alford proposed a new model based in part on performance and brand power.

“I know it won’t make up for that (hole),” said Alford, “but what can make it up?”

Alford also said that if the Pac-12 crumbles as the Big Ten/Big 12 expand again, it could open a new window for media rights discussions.

As Alford painted a bleak financial picture for the trustees, the meeting veered toward an implicit but unspoken question: What if that revenue can’t be earned in the ACC?

A trustee asked whether a buyout to leave the ACC was ‘feasible’.

“That’s an excellent question,” replied Carolyn Egan, FSU’s vice president of legal affairs and general counsel.

Egan said the ACC’s exit fee is three times its annual operating budget. That’s about $120 million.

If FSU could make $30 million a year, one trustee asked, does that mean the Seminoles would break even in about four years?

“Hypothetical,” Alford said.

The full answer depends on the granting of rights. ACC schools have licensed the TV rights for their home games to the conference until 2036. The ACC then distributes that revenue back to the teams. If FSU can’t find a legal escape valve, the Seminoles could lose hundreds of millions of dollars.

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The allocation of rights itself was not discussed at the meeting and it is unclear how or if FSU would challenge it.

However, it is clear that TV revenue is a major talking point at the highest levels of the FSU, including Alford, Egan and President Richard McCullough.

“We have to do something,” said board chairman Peter Collins.

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