About the brand fund and FSU and a contract partner
Here’s the content from McKenzie Law’s post (not from me, but I think some here value the perspective):
First and foremost, in thinking about an ACC settlement with FSU, I would not trust FSU for all the tea in China. It’s willingness to use sovereign immunity to weasel out of the Grant of Rights, the utterly legal weak positions it has taken over the Grant of Rights, the professionalism of its attorneys in serious legal pleadings and in oral arguments, and its truly institutional grandiosity about the pedigree of its football program and the institution itself makes it categorically radioactive as a contract partner. Indeed, if anything FSU’s leadership has taught us over the last 14 months, it’s that FSU is the epitome of an unreliable contract partner. FSU is so radioactive that it has nowhere to go but the Big 12, at best, and that suggestion may be a big stretch. Who would want to sign a contract with FSU when it acts like this, gets the Florida Attorney General involved, whines like a two-year old, and pants like a jilted high school boyfriend outside their ex's window? Clemson has been better in its approach in its equally loser case. It too is threatening sovereign immunity, but it has been far more reserved, and far less radioactive. I doubt the Tigers have anywhere to go, either. Otherwise, I am stuck on the “brand fund” proposal reported by ESPN’s
@ADavidHaleJoint
and
@aadelsonESPN
. I am not stuck on ESPN’s timeous exercise of its option, but I am stuck on anything that would allow the FSU or Clemson to get a greater piece of the ACC distribution pie. The reason is that the core settlement proposal—shifting revenue distribution to a so-called “brand fund”—raises significant contract law concerns, particularly around consideration and pre-existing duty. 1. Pre-Existing Duty Rule & Consideration Issues A fundamental problem is that the ACC and its member institutions already have a binding contract—the Grant of Rights (GOR)—which explicitly outlines how media rights revenue is allocated. The proposal to introduce a “brand initiative” fund that disproportionately rewards schools like Clemson and FSU seems to modify this existing contract. However, under contract law, a modification generally requires new consideration. If the ACC merely shifts existing funds from a general distribution model to a weighted model favoring certain schools, what new consideration is being provided by the schools receiving a larger share?
Consideration requires a new legal detriment or benefit. Here, the ACC members who are not Clemson or FSU are giving up part of their share but receiving no corresponding benefit. If FSU and Clemson are not required to provide additional contractual obligations (such as extending their GOR commitment), then this modification could be challenged as unenforceable under the pre-existing duty rule. There is some caselaw that supports the notion that dismissal of a lawsuit can provide the needed consideration, but I’ve never seen that for frivolous ones making ridiculous arguments like FSU and Clemson. 2. Unenforceability Without a Fully Egalitarian Structure For the modification to withstand legal scrutiny, it would need to apply in an objectively fair manner. As currently described, this fund would disproportionately benefit certain schools based on past brand value. That raises concerns under contract principles that require modifications to be based on clear, non-arbitrary standards. Ambiguous Metrics: What constitutes “brand value”? If the ACC does not define this metric in an objective and binding way, there’s room for legal disputes. Unequal Bargaining Power:If the modification results in an unbalanced structure where certain schools receive substantially more revenue without additional obligations, the conference could face future legal disputes from other schools that find themselves disadvantaged.
3. The Risk of Future Litigation Rather than stabilizing the conference, this could open the door to future disputes. Schools not favored by the new distribution model—such as Wake Forest, Boston College, or even new members like Stanford and Cal—could argue that the ACC is failing in its fiduciary duty to distribute revenues equitably. Additionally, precedent matters. If FSU and Clemson can strong-arm the ACC into modifying its agreements once, what stops them—or another powerful program—from doing it again when financial realities shift? From a contract law standpoint, the ACC needs to be careful. If they’re going to modify revenue distribution in this way, they must ensure: 1. New consideration is being provided. 2. Objective, quantifiable metrics govern revenue allocation. 3. All schools have a reasonable path to qualify for additional revenue, preventing an arbitrary or unfair distribution system. Otherwise, this “brand fund” could set a precedent where the loudest, most litigious schools dictate terms—undermining the very stability the ACC is trying to preserve.
