The Florida State board of trustees has filed an amended complaint to its lawsuit against the ACC, alleging the conference engaged in “self-dealing” when former commissioner John Swofford made media rights deals that cost member schools “millions of dollars” while helping his son.
The 59-page amended complaint, filed Monday night in Leon County, Florida, and obtained by ESPN, adds onto the allegations of “chronic fiduciary mismanagement and bad faith” that Florida State made in its first lawsuit, filed on Dec. 22.
Florida State is seeking declaratory judgment to void the league’s grant of rights and withdrawal fee as “unreasonable restraints of trade in the state of Florida and not enforceable in their entirety against Florida State.”
The ACC filed its own lawsuit against Florida State in North Carolina in December, then filed an amended complaint Jan. 17 seeking damages from Florida State for “serial breaches of critical legal promises and obligations.” As a result, Florida State chose to file its own amended complaint with a more aggressive tone — specifically naming Swofford and his son, Chad, and going into much greater detail into how specific media rights deals with Raycom Sports have hurt all member schools.
In a new section titled “The 2010 ESPN Agreement, ‘Raycom Partnership,’ and New Withdrawal Penalties,” Florida State contends that Swofford insisted in conversations with potential bidders for ACC media rights in 2010 that Raycom Sports be included in any new deal the ACC signed.
Raycom had a long partnership with the ACC but was struggling financially, and it needed to keep a package of ACC media rights for survival, according to the complaint. Chad Swofford worked for Raycom at the time and eventually became a vice president and general manager at the company.
As a result, ESPN sublicensed a package of Tier II and Tier III rights content to Raycom Sports for $50 million annually, and the complaint states this package “provided Raycom with more marketing and media rights than it had before, including syndication, ACC Properties and all digital rights.”
Florida State alleges in the lawsuit Swofford engineered this partnership “for the benefit of Raycom Sports,” noting, “The Raycom Sports Partnership has cost each ACC member several million dollars and continues to depress the value of their media rights, and the cost and success of their prestige network through today.”
A new deal with ESPN in 2012 kept Raycom Sports in the fold for Tier II and Tier III rights, and so did a deal in 2016 that has become a major source of contention and came with the grant of rights, which gives the ACC control of all member school media rights through 2036.
Florida State outlines that Tier I rates stayed the same, giving the league the same financial terms it negotiated four years earlier.
It also alleges its partnership with Raycom results in “approximately $82 million of rights fees for ACC Tier II and Tier III games going to third parties each year rather than the ACC and $50 million in rights fees paid by Raycom Sports to ESPN for sublicensing a package of ACC games (which in turn Raycom Sports licensed to Fox Sports Network/Bally for a substantial profit not shared with the members).”
In response to the ACC’s lawsuit against Florida State, the complaint describes the lawsuit as “unprovoked” and alleges the league was required to give notice and convene a “meeting” of its board at to secure a two-thirds majority for “the initiation of any material litigation involving the conference.”
“Nowhere in either of the two complaints the ACC has now filed does the ACC purport to have complied with this mandatory precondition,” the lawsuit states. Florida State also denies breaching its contractual obligations to the league.
In addition, the ACC’s filing also challenged Florida State’s ability to have school officials in conference leadership positions, which includes FSU president Richard McCullough on the ACC’s board of directors and finance committee.
