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Florida State lawsuit: ACC had ‘self-dealing’ under then-commissioner

FSU suggested former commissioner John Swofford made a TV deal to help his son’s employer.
 
Florida State University accused the ACC of self-dealing in its updated lawsuit. The accusation appears to center on then-commissioner John Swofford and his son.
Florida State University accused the ACC of self-dealing in its updated lawsuit. The accusation appears to center on then-commissioner John Swofford and his son. [ CHUCK BURTON | AP (2016) ]
Published Jan. 30|Updated Jan. 31

Florida State University has upped its legal rhetoric against the ACC, accusing the conference and now-former commissioner John Swofford of “self-dealing” with its TV deal and his son.

That allegation came in a 59-page amended complaint FSU filed Monday evening in Leon County Circuit Court. It was the latest update in a weeks-long legal battle between FSU and its conference home since 1991 — a dispute that isn’t expected to end anytime soon.

FSU’s complaint of self-dealing centered on Swofford, his son, the ACC’s lower-tier media rights and Raycom Sports. It requires some background.

The ACC and Raycom have a decades-long partnership that could have been in jeopardy around 2010. That’s when the ACC was negotiating with ESPN over its future multimedia rights. Swofford, according to FSU’s suit, “cajoled” ESPN into a separate, sublicensing deal with Raycom, which was in financial trouble at the time. Raycom would pay ESPN $50 million a year for the right to air some of the ACC’s Tier II and Tier III content, like basketball games of moderate interest.

That $50 million a year divided among the ACC’s 15 schools (including partial member Notre Dame) would have meant more than $3 million each. FSU said it got nothing.

“It’s rather surprising that a conference would so willingly take less TV money the core source of revenue in collegiate athletics just to keep a broadcast company from folding,” FSU’s complaint said.

Which leads to the accusation of self-dealing. FSU didn’t explicitly back up its claim but, repeatedly, mentioned the fact that Swofford’s son, Chad, worked at Raycom in various roles, including as the director of new media.

Regardless, FSU’s suit said the deal has “has cost each ACC member several million dollars and continues to depress the value of their media rights, and the cost and success of (the ACC Network) through today.”

The ACC Network was announced to great fanfare in 2016.
The ACC Network was announced to great fanfare in 2016. [ AP (2016) ]

The amended complaint restated many of the same arguments from the one FSU filed last month. It said the ACC’s exit fees — which could cost up to $572 million — are draconian and unlawfully restrict trade. FSU’s counsel also wrote that the conference broke some of its promises by failing to maximize money and provide a nationally competitive atmosphere on the field.

The updated suit hit the ACC even harder for its decision to add SMU, Cal and Stanford — three schools that traditionally have significantly lower TV ratings than the Seminoles.

“This alone demonstrates the ACC missed the point of conference realignment, and that its leadership deliberately decided to completely ignore its duty to the members to exploit their media rights,” the filing said. “Indeed, the leadership chose the exact opposite and diluted those rights.”

FSU’s complaint also responded to some of the points the ACC made when it filed its own suit in North Carolina (where the conference is based) the day before Florida State took action. FSU called it the “Unprovoked ACC Lawsuit.”

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Florida State argued the ACC failed to have the necessary backing of its member schools; there was no vote by the schools to file the suit, nor was there the required notice for a meeting to discuss it.

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