The college landscape has been changing drastically over the past year. There has been an influx of colleges that have sought to move from the conferences that they are currently in. The Atlantic Coastal Conference (the “ACC”) has added three new teams for the 2024-2025 season with open arms. It has added the University of California (“Cal”), Southern Methodist University (“SMU”), and Stanford University (“Stanford”).[1] An increase in teams in the ACC will allow the conference to increase its revenue and overall growth.
However, as willing as the ACC has been adding additional teams to the conference, they have not been so willing when it comes to allowing teams to leave the conference. Recently, Clemson University (“Clemson”) has attempted to leave the ACC in order to explore the possibility of joining another conference.[2] The ACC, obviously not happy with this, told Clemson that they could only leave the conference if they paid $140 million.[3]
Clemson then filed a lawsuit against the ACC on the basis that the ACC is impeding Clemson’s ability to weigh its options regarding conference membership by forcing members to pay an “unconscionable and unenforceable” fee.[4] Moreover, Clemson claims that the ACC’s interference is “fatally detrimental” to Clemson’s ability to ensure that its sports programs are able to compete at the highest possible level.[5] The ACC claims that this astronomical high fee is due to the fact that it owns the media rights of all its member institutions through 2036 even if the member leaves the conference.[6]
Clemson says that “the sum that the ACC insists a member pay upon withdrawal from the conference is an exorbitant penalty that is not connected to any economic harm that the conference might suffer, is not connected to a continuation of the relationship, and has ballooned to the point of unconscionability.”[7] Additionally, Clemson argues that the whole point of this fee is to punish any member institution that wants to leave. As Clemson points out, the ACC Commissioner Jim Phillips referred to the fee “as a ‘nine-figure financial penalty.’”[8] The way Clemson sees it, “the penalty is not to compensate for any potential financial damages the conference might suffer if a member left, but rather to act as a ‘mechanism to penalize any conference institution’ that wants to leave.[9]
If the ACC owns the media rights of Clemson, this will prevent Clemson from being able to have meaningful discussions with other conferences. However, Clemson claims that the ACC has incorrectly stated that they own Clemson’s media rights through 2036.[10] The media rights agreement the ACC signed with ESPN covers all member institutions of the ACC, with each team signing separate agreements with the ACC. Clemson claims that the agreements must be read together and cannot be read in isolation.
“The media rights Clemson granted to the ACC through its grant of rights agreement states that the conference was only granted the necessary rights to allow it and its members to perform under the ESPN agreements.”[11] The complaint states that “the grant of rights agreement is not, as the ACC has claimed, a blanket grant of rights. It is explicitly limited by the ESPN agreements.”[12]
The ACC Commissioner is certain that the ACC agreements will hold up. Furthermore, the ACC is fully prepared to enforce the $140 million fee against any member institution that wishes to leave. Florida State University (“FSU”) also recently filed a lawsuit against the ACC for the same reason that Clemson did. FSU referred to the fees charged by the ACC as “draconian.”[13] With many different colleges trying to switch conferences, it will be up to the courts to decide whether the fees imposed are reasonable.
[1] NCAA 2023: College football realignment tracker – ESPN
[2] Clemson Sues Over ‘Unconscionable’ Fees To Exit ACC – Law360
[3] Id.
[4] Id.
[5] Id.
[6] Id
[7] Id.
[8] Id.
[9] Id.
[10] Id.
[11] Id.
[12] Id.
[13] Id.
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