'Like smoke coming from the Vatican': The history — and future — of the grant of rights

The most-discussed document in college sports is stored away in an office in Charlotte, North Carolina, far from the prying eyes of the public or, as it turns out, the school administrators who actually signed it.

The ACC’s grant of rights, which is now under dispute in three different jurisdictions, is — along with its companion agreement, the league’s multimedia rights deal — kept top secret. Or it was until Florida State filed a lawsuit hoping to escape from under the contract’s weight.

A North Carolina judge likened the league’s grant of rights and multimedia deal to Coke’s secret formula — everyone’s heard of it, no one knows what’s actually in it. And yet, the ACC is hardly alone in its covert handling of key documents.

The Big 12’s grant of rights was reviewed by teams of high-priced lawyers as Texas and Oklahoma looked to depart for the SEC three years ago, and yet the document itself never saw the light of day publicly.

Why the big secret?

“That’s a really good question,” one ACC administrator said.

“I don’t know that answer,” an ACC athletic director said. “I guess because people are hopeful there’s a way around it.”

“Everybody knows it’s out there,” another official said before acknowledging the secretive nature of its specific language. “It’s like smoke coming from the Vatican.”

The inscrutability has given the document an almost mythical status, but in shrouding the grant of rights in mystery, it has become a sort of Rorschach test for fans and media hoping to predict the next round of realignment in college sports. Want your team to change conferences? A few bucks just needs to change hands and the grant of rights disappears. Want to maintain the status quo? The grant of rights is as inescapable as a life sentence at Alcatraz.

“People look at the ACC dispute and think, well, this is just a simple contract and the terms are unfair,” said David McKenzie, an attorney in North Carolina who specializes in intellectual property and has followed the ACC lawsuits closely. “The problem is that overlooks what’s at the center of the contract, which is essentially copyrights.”

So what exactly is the grant of rights, and why are the current lawsuits in Florida, North Carolina and South Carolina so potentially impactful in college sports even beyond the ACC?

The seeds of the document were planted in 1984, with the Supreme Court’s ruling in NCAA v. Board of Regents of the University of Oklahoma that each individual school had a right to negotiate its own multimedia rights rather than ceding them to the NCAA.

In the aftermath of that ruling, the rush to land profitable TV deals began, and that often meant neighboring schools fighting for the same space on a limited number of TV networks in a limited number of Saturday time slots. It also meant negotiating separate deals with different providers, occasionally dealing with fly-by-night broadcast entities that quickly went belly-up before paying what they owed, leaving schools to file lawsuits to recoup losses. In short, it was an every-school-for-itself system that didn’t function efficiently.

That’s when the Big Ten came up with a solution.

“Since media was aggregating, it made sense to aggregate our rights,” said former Big Ten commissioner Jim Delany. “It was a business decision and a control decision. They thought we’d be better off with single point negotiations and split the revenue that came out of that.”

The idea was simple: The schools sign their rights over to the conference in exchange for an agreed-upon percentage of league revenue. The conference then sells those rights to a TV network (or several networks). By leveraging each member’s rights as a package, the league has far more power in negotiating a profitable deal that, at least in theory, would result in the sum value exceeding that of the individual parts.

The idea of bundling schools for the sake of TV negotiations wasn’t exactly new, but what the Big Ten realized is that an official document that guaranteed those rights to the league provided security — for the conference, the schools and, most importantly, the TV partners, who strongly valued a package deal that guaranteed a certain amount of games between designated schools.

In other words, the grant of rights is a promise, rather than an expectation, that the games being sold for broadcast will be played.

“If you’re going to enter into long-term agreements that are complex,” Delany said, “it makes sense that there’s some understanding with respect to what’s being sold.”

This was 1988 — a year before Delany took over as conference commissioner — and, at the time, the Big Ten called its agreement an “assignment of rights.” The contract, separate from its media rights agreement with its TV partner, tied schools’ media rights to the league, which then bundled the rights to networks. The Big Ten’s original assignment of rights was a roughly three-page document, according to Delany, that covered football and men’s and women’s basketball. It has typically been extended in 10-year increments, and while there was often significant discussion among university presidents and administrators over the details of the agreement, there was little conflict. Everyone was on board.

In the years that followed, and particularly after the Big Ten partnered with Fox to launch its own network in 2007, the agreement ballooned in size and scope, but the underlying premise has remained largely unchanged today.

For a while, the Big Ten was, at least as far as what has been publicly disclosed, the only league that codified its version of a grant of rights in a binding legal document separate from the league’s bylaws. Others largely operated by rights granted in the league constitution or addendums thereof, which typically meant a school departing a league — and paying the associated exit fee — would regain its media rights upon departure.

That all worked out relatively well until the early 2000s, when a wave of realignment hit the Big East with teams fleeing for, ironically, the ACC. Then about a decade later, another massive shift in conference alignment took place, starting with rumors of Texas departing for the then-Pac-10 and ultimately seeing Rutgers, Maryland, Colorado, Nebraska, Texas A&M and Missouri all move.

The shake-ups left conferences concerned. The Big 12 acted first, authoring an official grant of rights that aimed to bind the league’s members together for a specified term by assigning media rights to the conference for the duration of that term (which, typically, matched the league’s current TV agreement). The Big 12’s grant of rights was written, according to multiple sources, using federal copyright law as a template, and it was that agreement that, again according to multiple sources with intimate knowledge, the ACC used as its own template.

There was, until Florida State’s lawsuit against the ACC was filed in December 2023, just one copy of the ACC’s agreement available for viewing. To read the document and decipher the fine print, lawyers for ACC schools had to travel to the league’s headquarters and work under constant supervision. They could take notes but not verbatim transcripts. A league administrator watched over anyone reviewing the document at all times, “like a proctored exam in college,” according to one source with direct knowledge of the process. If the proctor needed a bathroom break, all activities grounded to a halt. If, upon review of the notes taken, a lawyer had follow-up questions, he or she would need to return back to the league’s HQ to read the document again. Removing the grant of rights from its secret abode would result in a penalty from the league or, one imagines, a large boulder dropping from the ceiling like the opening scenes of “Raiders of the Lost Ark.”

In reality, the document is far more mundane than the secrecy suggests.

The ACC’s grant of rights, which became public as part of court filings in December 2023, is 3½ pages of sparse language outlining the reasons for its existence (“enhances the stability of conference membership,” and “confirms the commitment by each member”) and the rights conferred (multimedia, copyright). It runs through June 30, 2036, and requires any new members — Stanford, Cal and SMU were added this summer — to sign the same agreement.

While the grant of rights is inherently tied to the multimedia rights deal, they are separate documents, and changes to one does not necessarily impact the other.

“It serves all the constituents,” said John Wildhack, a former executive at ESPN and now the athletic director at Syracuse. “It provides some certainty for the media company, certainty for the institutions and certainty for the conference.”

That security is paramount because the final piece of the media food chain is the local cable companies, who pay affiliate fees to each network they carry based on a general understanding of the value of the product being aired. To assess that value, everyone involved needs assurances that the teams playing in a conference today will be the same ones playing throughout the life of the deal. Those assurances were even more critical as leagues and TV networks partnered on conference-specific networks, with ESPN and Fox absorbing significant upfront costs assuming they’d recoup that investment over a longer period from affiliate fees and advertising.

“It’s the same thing [as the Big Ten had in the 1980s], but the stakes are higher because the economy is so much bigger,” said Patrick Crakes, a media consultant and former executive at Fox Sports. “It gives the media companies a legal understanding that the games are going to be there.”

But security was also at the forefront for the league’s membership. During the realignment bubble in the early 2010s, the ACC risked losing teams beyond Maryland — Florida State had flirted with the Big 12, for example — and member schools wanted assurances that the league’s future was safe. The league’s initial grant of rights — signed in 2013 — provided that protection.

And until Florida State’s lawsuit against the ACC, which asked a judge in Leon County, Florida, to allow the school to withdraw from the league without losing its media rights, the document functioned exactly as intended, even in times of great turbulence.

“So far, we’ve never had [a grant of rights] really get blown up,” Crakes said. “What we’ve had is a predictable end of a grant of rights expiring and, of course, the TV deals are tied in with that.”

Yes, there has been additional realignment, but it has always occurred within the framework of an expiring TV deal — and, concurrently, the grant of rights.

Oregon, Washington and other Pac-12 schools were free to leave the conference at the end of the 2023-24 season because its deal had expired. Texas and Oklahoma just joined the SEC this summer — two years after they agreed to join — because both schools had to partially wait out the Big 12’s grant of rights. (That agreement actually runs one more year, but the parties agreed to an early separation that costs Texas and Oklahoma a reported $50 million each.)

What’s different in the ACC is that its grant of rights runs through summer 2036, putting teams eager to depart on a far different timeline than Texas or Oklahoma faced.

The reason for this is, essentially, the existence of the ACC Network. In 2016, all ACC members signed an addendum to the existing 2013 grant of rights, extending the agreement for 20 years at, according to Florida State’s legal filing, the behest of ESPN, which needed a long-term agreement before investing in the launch of a new network in which it would serve as a 50-50 partner with the ACC.

“Because of the schools that have been added, we’re going to get a significant [revenue increase] and we’re going to start diligently working on an ACC network,” former Florida State president Eric Barron said in 2013 after the signing of the initial grant of rights. “It was very clear ESPN wasn’t interested in making either one of those investments, which are significant, if the conferences aren’t stable.”

As an administrator in another league put it: “The ACC sold its soul for a network.”

In this case, that soul might be worth upward of $700 million per school, according to Florida State’s lawyers, who’ve argued in court that figure could be the rough cost of paying an estimated $150 million exit fee and losing media rights through the 2035-36 season, a value FSU called “unconscionable.”

On the other hand, the return on investment has been lucrative for the league. According to the ACC’s most recent tax filing, the league has seen nearly a 50% increase in revenue since the launch of the network, including a nearly $200 million annual increase in television revenue.

The problem, of course, isn’t the ACC’s growth in absolute terms. Florida State and Clemson are eager for an exit strategy because other leagues — the SEC and Big Ten, in particular — have grown even faster thanks to new TV deals that dwarf what the ACC receives, and both will have a chance to negotiate yet another new TV deal before the ACC’s grant of rights and TV contract expire.

Couple that with a likely new revenue-sharing model and uncapped scholarships that some schools have estimated could ultimately cost them $30 million or more per year, and FSU and Clemson see an existential crisis for their programs that simply didn’t exist when the grant of rights was signed. Their concern essentially boils down to an admission that the old rationale for assigning rights to a conference — that the sum exceeds the individual parts — is no longer true in an era where Florida State and Clemson could, theoretically, command far more on the open market today than they will receive from the ACC over the next 12 years. (Though, it should be noted, neither school can negotiate with another conference until it informs the ACC of an intent to depart, and no league is likely to offer a serious financial return without knowing whether the schools actually own their media rights.)

In short, Clemson and FSU — and any other school hoping to bolster its economic fortunes — need a way out of the grant of rights before mapping out an alternative future, and that leads to a whole host of rhetorical gymnastics as each side debates the semantics of a few brief paragraphs.

Both the schools and the league argue the first article of the grant of rights explains their case: “Each of the member institutions hereby irrevocably and exclusively grants to the conference during the term … all rights necessary for the conference to perform the contractual obligations of the conference expressly set forth in the ESPN agreement, regardless of whether such member institution remains a member of the conference during the entirety of the term.”

The ACC suggests the language clearly binds Florida State and Clemson’s media rights to the conference, regardless of whether it remains a member or not.

But Clemson, in its suit, counters that, should it depart the ACC, the league’s contractual obligations to ESPN — which, according to multiple sources, includes a minimum of 15 member schools — would not be violated since the league would still exceed that limit, hence the ACC suffers no financial harm during the course of the agreement if the Tigers go elsewhere. Moreover, while the multimedia agreement is a separate document, Clemson contends its language does “not require the ACC to provide ESPN with the rights to games in which the home team is not a member of the ACC,” so if the Tigers leave the conference, there’s no violation of their contractual obligations, which in turn means the conference is still meeting its obligations to ESPN, thus still fulfilling the terms of the grant of rights.

What does a “game” mean? Do all “obligations” have to be explicit or is a school’s membership implied? Does one legal document impact the other?

These are questions that loom large — for Clemson, Florida State and around the sports media landscape.

Which side is right?

Prior to the board of trustees meeting that officially granted Florida State permission to file its lawsuit, athletic director Michael Alford posed a set of questions to board chair Peter Collins, according to documents obtained through a freedom of information request by ESPN. Among them was, perhaps, the most salient question looming over the entire process: “How confident should we be about this when there has been no known legal challenge to a grant of rights?”

Florida State and Clemson have determined they’re confident enough — or desperate enough — to move forward. The ACC remains steadfastly confident that its grant of rights will stand up to judicial scrutiny. But no one really knows anything for certain until a judge issues a ruling. (And, even then, appeals will follow.)

But that doesn’t mean the world isn’t watching with bated breath. Members of the North Carolina board of trustees have voiced a desire for the Tar Heels to follow FSU and Clemson’s lead, while others inside the administration have, according to multiple sources, urged patience because other schools have chosen to be the canaries in the coal mine. And if Florida State and Clemson prove victorious in court or the ACC caves to their demands, a new precedent will be set, and the ripple effects could be felt around the country as schools realize the document that had once bound them together isn’t so unassailable after all.

It’s a testament to just how chaotic the college sports world has become that a document signed with the sole purpose of providing security for the future could itself be but a speed bump on the road to whatever comes next.