The collegiate sports landscape has been upended in the last few years with numerous NCAA conferences undergoing dramatic realignments. [2] The latest big wave of conference changes includes high-profile moves, by schools like the University of Southern California (USC) and the University of California, Los Angeles (UCLA) to the Big Ten, and the dissolution of the Pac-12 as powerhouse schools exit. These large-scale changes are transforming the business and legal dynamics of college sports. [3] These shifts are driven largely by the pursuit of lucrative media rights deals that have become a critical revenue stream for conferences and schools. [4]
Most recently, cases like Florida State University (FSU) vs. the Atlantic Coast Conference (ACC) and the Pac-12 vs. Mountain West have been reshaping the landscape of college sports.[5] Here, we explore the legal implications of these realignments and their impact on existing media rights agreements.
Why School are Jumping Conferences
While conference realignment is not new, the scale and speed of the recent changes have been unprecedented. [6] In 2021, the Big 12 faced a significant threat when the University of Texas and the University of Oklahoma announced their intention to join the “what is the full name” (SEC). [7] This move set off a domino effect, with other conferences scrambling to secure new member schools to maintain their competitive and financial standing.[8] The 2024 football season alone began with 15 teams moving to new conferences.[9] Schools are increasingly making decisions based on projected revenues from media rights deals, which can vary significantly depending on the size and reach of a conference's television network. [10]
Legal Impact on Media Rights Agreements
1. Breach of Existing Contracts and Exit Fees
When a school decides to leave its conference, it can trigger significant legal and financial consequences. [11]Conferences typically use grant-of-rights agreements to lock in a school’s media rights, preventing them from freely exiting the conference without significant penalties.[12] For example, the Big 12’s grant-of-rights agreement stipulates that even if a school leaves, the conference retains control of its media rights until the agreement’s expiration date. [13]
Recent legal cases illustrate the complexities schools face when trying to leave their conferences. For example, in FSU vs. ACC, FSU is attempting to invalidate the grant-of-rights agreement that tie them to the ACC until 2036.[14] FSU argues that the conference’s media rights deal with ESPN no longer justifies staying, especially as other conferences like the Big Ten and SEC are securing far more lucrative agreements.[15] The ACC, however, has preemptively sued FSU in an attempt to enforce the contract, which highlights how realignment can turn into lengthy legal battles over media rights. [16]
Grant-of-rights agreements have become the focal point in conference realignment disputes. In addition to the FSU vs. ACC case, these contracts are often the reason schools cannot freely leave a conference without significant penalties.[17]FSU’s legal challenge to the ACC’s grant-of-rights agreement has the potential to set a precedent, as other schools might look to use similar arguments to escape unfavorable media rights deals. [18] This case highlights the importance of carefully negotiating long-term media rights contracts to avoid legal entanglements. [19]
Schools facing such legal hurdles often negotiate early exits through settlements or arbitration, which can be time-consuming and costly. [20] If a settlement cannot be reached, these disputes may result in public litigation that damages the reputations of both the departing school and the conference. [21] The risk of protracted legal battles is one reason why schools sometimes delay announcing their intent to leave until the legal landscape is clearer. [22]
Additionally, exit fees are not standardized and vary widely across conferences, further complicating these negotiations. [23] For schools contemplating a move, weighing the potential financial benefits of a new media rights deal against the costs of exiting their current agreement is critical. [24] The Pac-12 vs. Mountain West lawsuit emphasizes the complications of exit fees. [25] As the Pac-12 seeks to recover financially from its weakened position, it faces legal battles with the Mountain West over approximately $55 million in exit fees. [26] Schools like Boise State and San Diego State, which are set to join the Pac-12 by 2026, are at the center of these disputes as well. [27] This case further exemplifies how realignment can lead to legal conflicts over the terms and penalties of leaving one conference for another. [28]
2. Media Rights Valuation and Redistribution
Conference realignment also disrupts the valuation of existing media rights agreements, as the departure or addition of key schools can significantly alter a conference’s marketability. [29] This issue is particularly relevant when high-profile programs—often referred to as “anchor schools”—exit. [30] For instance, when USC and UCLA announced their move to the Big Ten, the remaining Pac-12 schools faced a sharp decline in the projected value of their upcoming media rights negotiations, effectively making the conference a less attractive partner for major networks like ESPN and Fox Sports.[31] This type of disruption can result in a "media rights devaluation" for the remaining schools, forcing them to accept less favorable deals and diminishing their leverage in future negotiations. [32]
Conversely, adding high-profile schools can significantly increase a conference’s bargaining power. [33] The Big Ten’s recent addition of USC and UCLA is projected to increase the conference’s overall market reach, making it more appealing to media partners looking to capture new demographics, particularly on the West Coast. [34] However, the redistribution of media revenue can be contentious. [35] Conferences with unequal revenue-sharing models—where some schools receive a larger share of media rights revenue based on viewership or historical success—must revisit these agreements to reflect the new membership. [36] If not handled properly, this can lead to internal disputes among member schools, as seen in the Big 12 and ACC in the past. [37]Addressing these valuation and redistribution issues early is essential to maintaining conference stability and avoiding future conflicts. [38]
Future Outlook
With conference realignment far from over, the future of college sports is likely to be dominated by legal disputes over media rights and exit fees. [39] The outcome of cases like FSU vs. ACC and Pac-12 vs. Mountain West will significantly influence how universities approach future conference realignments and media rights deals. [40] Schools will need to carefully evaluate the financial and legal risks associated with exiting conferences, particularly as media rights deals cement themselves as a key source of revenue for collegiate athletics.[41]
The recent wave of NCAA conference realignments underscores the increasing importance of media rights in collegiate athletics.[42] While these changes promise significant financial rewards for some schools, they also pose substantial legal risks and operational challenges. [43]As the collegiate landscape continues to evolve the universities, conferences, and media partners will need to work together to ensure that future deals are both legally sound and aligned with the broader interests of student-athletes and fans. [44]
Emma Spisak (contributing editor) is a 3L at Villanova University Charles Widger School of Law. Her passion for sports stems from her time as a student athlete and captain of her field hockey team at Penn State University. Emma is a part of the Corporate Negotiation Team and is interning at Playfly Sports where she is expanding her knowledge on the role media rights play in the collegiate sports landscape.
References:
[1] Photo by Gene Gallin on Upsplash.
[2] Ralph D. Russo, What’s Next in Major College Football Realignment?, AP News (Sept. 21, 2023), https://apnews.com/article/conference-realignment-relegation-e50adf12c41365614ebac1fa8c1b346d (discussing the growing possibility of relegation in U.S. sports leagues, with examples from college football's ongoing conference realignment.)
[3] NCAA 2024: College football realignment tracker, ESPN (June 10, 2024), https://www.espn.com/college-football/story/_/id/40293423/cfb-conference-realignment-tracker-2024 (providing an up-to-date overview of conference realignment movements in college football, including the latest team transfers and conference changes.)
[4] Steve Berkowitz, NCAA’s Power Five Conferences Are Cash Cows, USA Today (May 19, 2023), https://www.usatoday.com/story/sports/college/2023/05/19/power-5-conferences-earnings-billions-2022/70235450007/ (providing a financial breakdown of the earnings of Power Five conferences and their impact on the wider landscape of college athletics.)
[5] David Rumsey, Conference Realignment: Court Battle Looms in Complicated Saga (September 24, 2024), https://businesslawtoday.org/2024/03/recent-developments-in-sports-related-disputes-2024/ (analyzing key legal disputes in the sports industry, including labor negotiations and intellectual property issues.)
[6] The Reformation of the NCAA: The Impact of New Legislation, Re-Alignment, and NIL, Sloan Sports Conference (March 1, 2024), https://www.sloansportsconference.com/event/the-reformation-of-the-ncaa-the-impact-of-new-legislation-re-alignment-and-nil (discussing the evolving landscape of the NCAA, including the effects of name, image, and likeness (NIL) deals and conference realignment.)
[7] Id.
[8] Max Olson, The Big 12 Weighs Its Next Move: Expansion, Exploration, and the Texas-Oklahoma Problem, The Athletic (Aug. 25, 2021),https://theathletic.com (outlining the anticipated expansion and realignment of the Big 12 conference.)
[9] See, Realignment Tracker, supra note 2.
[10] Conference Realignment Decisions Ignore Impact on Health, Well-being and Education of College Athletes, The Drake Group, https://www.thedrakegroupeducationfund.org/2023/08/13/conference-realignment-decisions-ignore-impact-on-health-well-being-and-education-of-college-athletes/ (critiquing the adverse effects of conference realignment on the physical and academic welfare of student-athletes.)
[11] Michael McCann, Conference Realignment Harms Legal Case for NCAA Amateurism, Yahoo Sports (Aug. 5, 2023), https://sports.yahoo.com/conference-realignment-harms-legal-case-162430544.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAANfj35abb7Rx-pqXXmpvUi4UPjHvjABEpHufMgGyXTcc8sBGlM_sn5s0XtteCzB1zR74lWKhhhAnkalzVZkqF1NCiBF3lWgm5odd5W6KKp-aF4ZT5rGjQRYuV3rAg_q7lJhfUIPWcIMQZSEgiagPPYK4ISr3Te497Zl6IW1gaMzO (exploring potential legal challenges against conference realignment based on its impact on student-athlete health and safety.)
[12] See, Olson, supra note 5.
[13] Id.
[14] Walter Metzinger, Recent Developments in Sports-Related Disputes 2024 (March 20, 2024), https://businesslawtoday.org/2024/03/recent-developments-in-sports-related-disputes-2024/ (providing insights into current legal conflicts in the sports industry, including labor issues and contract disputes.)
[15] Id.
[16] Id.
[17] Id.
[18] Id.
[19] Id.
[20] See, Olson, supra note 5.
[21] See, Berkowitz, supra note 3.
[22] Id.
[23] See, Olson, supra note 5.
[24] Id.
[25] See, Rumsey, supra note 4.
[26] Id.
[27] Id.
[28] Id.
[29] See, Realignment Tracker, supra note 2.
[30] See, Berkowitz, supra note 3.
[31] Jeremy Cluff, Arizona State Leaving Rich Pac-12 History Behind in Big 12 Expansion Move, AZCentral (Aug. 5, 2023), https://www.azcentral.com/story/sports/college/asu/2023/08/05/big-12-expansion-arizona-state-leaving-rich-pac-12-history/70524031007/(detailing Arizona State's departure from the Pac-12 and the broader implications of the Big 12's expansion.)
[32] Id.
[33] Tom Layberger, College Football’s Super Conferences Are Forming, Forbes (Aug. 6, 2023), https://www.forbes.com/sites/tomlayberger/2023/08/06/college-footballs-super-conferences-are-forming-setting-themselves-far-apart-from-the-rest/ (discussing the emergence of super conferences in college football and their financial and competitive separation from other conferences.)
[34] Id.
[35] Id.
[36] See, Berkowitz, supra note 3.
[37] Id.
[38] See, Layberger, supra note 31.
[39] See, Rumsey, supra note 4.
[40] Id.
[41] Id.
[42] See, Realignment Tracker, supra note 2.
[43] See, Metzinger, supra note 12.
[44] Id.
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