TALLAHASSEE, Fla. — Florida State University President Richard McCullough believes the Seminoles will have to consider leaving the Atlantic Coast Conference unless there is a "radical change to the revenue distribution."
McCullough made his remarks at a board of trustees meeting Wednesday, stoking more speculation that FSU is poised to break a grant of rights deal with the ACC and join another league.
Calling it an "existential crisis" for the university, McCullough referenced the sizeable revenue gap – projected to be $30 million annually per school – that FSU will face compared to the Big Ten Conference and Southeastern Conference, which inked lucrative media deals in recent years.
"We, of course, are not satisfied with our situation," McCullough said. "We love the ACC. We love our partners with ESPN. Our goal would be to continue to stay in the ACC, but staying in the ACC under the current situation is hard for us to figure out how we remain competitive unless there were a major change in the revenue distribution within the conference. … That has not happened."
The ACC distributed an average of nearly $39.5 million per school for full members for the 2021-22 season compared to $49.9 million for the SEC and $47.9 million for the Big Ten. That gap is expected to grow to $30 million a year once Oklahoma and Texas join the SEC and UCLA and USC join the Big Ten.
Meanwhile, the ACC is mired in a TV deal with ESPN that lasts through the 2036 season, leaving no foreseeable way to close a gap that could see ACC schools fall more than $400 million behind some of their counterparts.
"FSU helps to drive value and would drive value for any partner, but we have spent a year trying to understand how we might fix the issue," McCullough said. "There are no easy fixes to this problem."
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That kind of shortfall would hinder FSU's ability to keep pace in an athletics arms race, including recruiting budgets, facility improvements, support staff and coaching salaries.
The University of Florida – an annual rival of FSU – is a member of the SEC and already has deep-pocketed coffers. There's a prevailing belief that Florida's funds would grow to the point that FSU would not be able to financially compete with the Gators, especially in an era of name, image and likeness.
"I believe that FSU will have to, at some point, consider very seriously leaving the ACC unless there were a radical change to the revenue distribution," McCullough said.
One thing that wasn't mentioned, however, was where FSU might look if it were to leave.
FSU had long sought admission into the SEC and seemed poised to join the league in 1990 before a surprise about-face courtship with the ACC.
The Seminoles have fared well in all sports since gaining admission to the ACC, most notably in football. FSU won its first 29 ACC games, posted a 62-2 record from 1992-2000 and claimed nine consecutive ACC championships in its first nine seasons in the league. The Seminoles have also won three national championships since then.
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FSU's men's basketball, baseball, softball and soccer programs have also thrived in the ACC, winning numerous league crowns.
But, as trustee Jorge Gonzalez pointed out, "it's not personal towards the ACC."
"We have a major math problem," he said.
To bolt the ACC, any school would need to pay an exit fee of three times its annual revenue (which amounts to about $120 million) and would need to navigate the grant in media rights to the ACC to be able to broadcast future games. If not, all TV revenue a school generates from a new conference must be paid back to the ACC.
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"We have to get out of that deal," trustee Bob Sasser said.
Fellow trustee Deborah Sargeant said a "sadness" would come with leaving the ACC. But, she concurred, the financial hole is too great to stay status quo.
"We have to keep our lifeline going," she said.
At least seven ACC schools — Clemson, Florida State, Miami, North Carolina, North Carolina State, Virginia and Virginia Tech — have had discussions about breaking the grant-of-rights deal — a document that ties the conference together through 2036.
ACC athletic directors and presidents responded at the league's annual meeting in May by agreeing to consider a revised revenue-distribution model that would benefit the most successful teams beginning with the 2024-25 academic year. The proposal would send a larger share of postseason revenue to the teams participating in those events rather than dividing it equally.
The timing would coincide with the start of the expanded College Football Playoff.
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FSU athletic director Michael Alford suggested the revisions could lead to more than $10 million annually in extra revenue. But even that's not enough to close the gap.
"For us, the alternative of just staying in this conference for the next 13 years and trying to wait for that perfect alignment of the stars is the equivalent of a death by a thousand cuts – and each cut is a $30 million cut over the next 13 years," trustee Justin Roth said.