RALEIGH, N.C. (WNCN) — The Atlantic Coast Conference is being held together by four sheets of paper.
The league’s grant-of-rights agreement has been discussed often during the nearly 10 years of its existence — but hasn’t been seen by the general public until this week, when CBS 17 News obtained it via an open records request.
The concept is simple: Every ACC school signed over control of its television rights to the league through the duration of the contract. That makes it much more difficult for a school to leave the conference, which would hold onto those rights — and the revenue those rights generate — even if a university jumped ship.
“A grant-of-rights is sort of exactly what it sounds like,” said Landis Barber, a Raleigh attorney who has been studying the agreement and conference realignment.
CBS 17 News obtained the initial version of the grant-of-rights signed in 2013 and lasts through June 30, 2027.
The ACC extended it through 2036 as part of its deal with ESPN to create the ACC Network, but that document has not yet been released.
“It’s important to understand that that’s what we’re working on, is the 2013 grant-of-rights,” Barber said. “We don’t have access to any amendments or anything like that. So we’re looking at 2013. And in there, you don’t see a termination provision. You don’t see liquidated damages, you don’t see those things.”
But now we do know exactly what was in the original paperwork and how it’s keeping the conference together.
It’s a big deal now because the potential domino effect of UCLA and Southern California moving from the Pac-12 to the Big Ten could affect the ACC with several schools being speculated as possible targets for other conferences.
“The ACC’s grant-of-rights doesn’t expire until 2036,” Barber said. “And that’s why so much attention is on it. Because it’s a long term commitment. There’s a ways to go. And there’s a lot of money left on the table.”
The language in the document is clear.
Paragraph 1 lays out that each school “irrevocably and exclusively” grants the league those television rights to its home games “regardless of whether such Member Institution remains a member of the Conference during the entirety of the Term.”
There’s similarly strong language in Paragraph 6, which ensures that every school acknowledges that “the grant of Rights during the entire Term is irrevocable and effective until the end of the Term regardless of whether the Member Institution withdraws from the Conference during the Term or otherwise ceases to participate” as an ACC member.
Additionally, if the ACC should expand, any new school must agree to the grant-of-rights.
Is there a way out of it?
Barber pointed out a couple of avenues a school wishing to leave might try to use.
In that situation, the school and league would no doubt end up in court. But in which state would that courtroom be: In North Carolina, home of the ACC? Or in the state of the school that’s leaving?
That came up a decade ago when the University of Maryland left for the Big Ten and claimed that North Carolina courts shouldn’t consider the ACC’s lawsuit against it because the school is an arm of the state, and states have sovereign immunity that protects them from lawsuits.
“So it would be interesting to see, if they pursued to litigation, what the court would do again — especially if it were a North Carolina school versus the Atlantic Coast Conference, which would be different,” Barber said.
Another vulnerability might be to raise the issue of consideration — the benefit that each party to a contract receives.
Barber says a school might make the claim that the ACC gets more out of the agreement than the individual schools do.
“We obviously see what ACC got in this, the audio-visual rights, everything like that,” he said. “But it’s a little less clear what the institutions got in this deal. And that may be an area that the institutions could look to go to.”
The ACC paid its member schools an average of roughly $36 million a piece during the 2020-21 academic year, up from $32 million the year before, according to the conference’s IRS Form 990s from those years obtained by CBS 17 News.
But as big as that sounds, those payouts lag behind those from other power conferences.
The Southeastern Conference paid its member schools an average of nearly $55 million in 2020-21. The Big Ten paid each of its 12 longest-tenured members about $54 million in 2019-20 before the COVID-19 pandemic caused the payouts to dip the following year.
The SEC started this latest round of realignment almost exactly one year ago when it added Texas and Oklahoma from the Big 12. Those schools aren’t expected to join the SEC until July 1, 2025, because the Big 12 — like the ACC — has a grant-of-rights agreement.
Why aren't those schools challenging it?
"It's expensive. It's challenging. It costs money. It costs time," Barber said. "If you look at (Texas and Oklahoma) ... they're getting out in 2025. They're like, 'The time, the money, it's not worth it.'
"Nobody's challenged it right now, because there hasn't been the experience like this one where there's so much time left, so much money on the table," he added. "And that's what's happening here."