What progress is FSU making in court vs the ACC?

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That should brighten your day a little, actually a lot. So sign up now at ChumbaCasino.com. That's ChumbaCasino.com. Yesterday on Capitol Hill, I believe it was the House Select Committee on Wasting Time and Screwing Over College Athletes had another hearing on the dangers of NIL. We'll get to that in a couple of minutes, but Tarun Sharma has been with us before. He works with the folks at Conduct Detrimental with Dan Lust and Daniel Wallach and friends of ours. He runs the University of Minnesota NIL Law Center.

We could call it whatever we want. And he's a former Duke Baseball team manager, which is really why we're going to talk Duke Baseball. Actually, let me ask you first, because I wanted to get to the Florida State ACC lawsuit first. The ACC filed an amended lawsuit now seeking damages.

So let me just throw it to you kind of broad brush. Where are we with the legal maneuvering back and forth there? Yeah, thanks for having me on, Adam.

It's good to be back. And yeah, it's a really interesting story in that we've always heard this buzzword, like the grant of rights, and that's what's locking in all these ACC teams. And this is the first time that we're actually seeing a legitimate challenge to it. So Florida State obviously filed suit in Florida over breach of contract alleging that the ACC had locked them into this terrible media rights deal and that they were costing all of this money. And then that they were unilaterally raising the exit fees so that it made it impossible to leave. What wasn't known at the time when Florida State was having that Board of Trustees meeting that a lot of us watched on Zoom is that the ACC was filing in North Carolina that there was a breach of contract by Florida State initially. And so that was amended yesterday. And I think the big news is that much like what the remaining PAC two schools tried to do it and were successful in doing was limiting the ability for the for Florida State to be involved in the governance of the conference while this is going on, so they're seeking a permanent injunction in that way, which was big news and is very, very interesting because it's just another kind of line in the sand.

And it makes you wonder whether there's any way back from that. Tarun Sharma is joining us here on the Adam Gold Show. He works with Dan Wallach and Dan Lost the Conduct of Detrimental Sports Law podcast, University of Minnesota Law School Sports and NIL Clinic. You know, having read enough about this, the back and forth with lawsuits, Florida State, you're responsible for the deals that you signed. Is that would that be accurate? And Florida State willingly signed the grant of rights, I believe, twice. Yeah, they signed the initial grant of rights and then the amended grant of rights. And that's part of what the ACC is trying to get this North Carolina court to say, which is that the both of those agreements are valid and binding contracts. And so that's very important because if the grant of rights is not legitimate, that's going to cause open season for all of these schools.

Yes, they can basically do whatever they want. And for anyone that's not familiar, this this term grant of rights, what it actually means is that the school is signing over their media rights over to the conference. So the conference is able to negotiate on behalf of all of the schools with all of their media rights. And so, yeah, that's what the ACC is trying to prove or get this court to say is that, yes, that Florida State not only signed it, but they're now breaching the agreements that they made in the initial grant of rights. And and so they should be held liable for that, both under the ACC Constitution and North Carolina state law. Would it be accurate to say that Florida State's best argument is that it's one thing to sign something like this, but the fact that it goes all the way through 2036 is above and beyond, even though Florida State willingly entered into this agreement twice, that that the length of this deal might be declared illegal? Yeah, I guess that that is one argument that they could be making. It's more like, you know, a court will not enforce a contract where it's like unjustifiable where where it's so far flung that that the court can't in the pursuit of justice actually enforce such an agreement.

But I don't necessarily think that that would be the case here. I think Florida State's strongest argument is, hey, look, you're taking your chances here banking on this grant of rights if if they find that you've breached your duties to us as a membership by not making the best deal possible or whatever the fiduciary duties that they're alleging that the ACC has violated, that they could be left with nothing, not just a small exit fee, but no exit fee at all. And so I think that that is probably the most the strongest argument that Florida State has. I guess they would have to prove that the ACC willingly signed a bad deal like no or knowingly signed a bad deal. I just don't know that there's legal protection for signing a below market deal, because I think at the time, the reason why the deal was so long was because that was how the ACC was getting the most security from ESPN.

Does it? Does it strike you and we're talking with Terron Charmos, an attorney runs the University of Minnesota Sports and NIL clinic. Does it strike you as this is Florida State's trying to really force the ACC to settle here? I think most suits that are filed are kind of have that in mind that we could just settle this and and get out of it because this is clearly a very unhappy marriage. Florida State before they filed this had mentioned numerous times that they were unhappy with with the way that the media rights had gone, but they still signed the the grant of rights twice. So I think that also a strong argument is that the the exit fee, it could be considered excessive because the ACC is raising that on its own. It's not that the schools were getting together necessarily and saying, hey, it's $572 million for you to leave the ACC.

But yeah, I think that ultimately we will see some sort of settlement. But from the ACC's perspective, again, I think that they have a vested interest in keeping this grant of rights intact. And so if it feels like the tides are turning and that they're going to lose and and they'll get that sense over the over the coming months with the filings and all that, that if it gets to that point that maybe they just want to sacrifice having FSU to preserve the the grant of rights otherwise. A final thing on this before I talk to you about that ridiculous committee hearing we saw yesterday is if I just don't see what benefit the ACC could get other than the initial influx of cash to settle with Florida State, because if they settle with Florida State, then there are other schools that would like to also follow Florida State out the door.

And that will just create, you know, the the draft of whether it's Miami or Clemson or North Carolina or whoever it is, they'll go out the door, too. I mean, I just don't see the ACC accepting a settlement unless the settlement is so high that nobody else would be willing to also fork over $700 million. Yeah, but you know, if they settle, any settlement is not going to include something that says that the grant of rights is not valid, right? They would they would couch it in that we've made a mutual agreement to allow Florida State to exit at a negotiated lower price for the exit fee. So I think that and this is what I was saying is that if if it seems like the court is not going to say yeah, this grant of rights is great, and it's valid, and it's enforceable, and they'll get that sense that then maybe they have more of an incentive to settle so that there's not actually a court ruling that says, hey, your grant of rights is bogus, by the way, because then that's truly open season. Like all of the schools are out the door if there's no consequence for leaving. I think that they could mostly get better media rights deals, especially I'm thinking about North Carolina in particular, I think North Carolina would be very attractive to the Big Ten, to the FCC.

And I could see them going out the door. But right now, I think the ACC has a strong argument to to maintain this because everyone's still on board. So we'll see what happens.

But you know, there's definitely more to come in in the upcoming months. Not every family member is happy to run that. I've known that my entire life, Florida State might just be a hostile member of the family. Final thing. Yesterday's hearing on Capitol Hill with Charlie Baker, the president of the NCAA, he floated the major scare tactic we hear all the time. If athletes are declared employees, which I think is probably going to happen in a court of law in the next year, if athletes are declared employees, then schools will just across the board, kill, you know, the non revenue sports, they'll eliminate Olympic sports, volleyball, track and field, blah, blah, blah, all of those, because they won't be able to afford it. Is that just a scare tactic?

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See website for details. I have to know but I think that it's a legitimate point that a lot of the schools cannot afford what it would cost to employ all of those student athletes that would be participating in non revenue generating sports without the revenue generating sports kind of subsidizing those, So I think that that's legitimate and it's. It's a big fear, I think, for Olympic sports, and this is something that Dr Victoria Jackson, who is on the panel yesterday, that she's talked about numerous times. Different possibilities to subsidize Olympic sports because it is important. We do like right like every couple of years we go to the Olympics and we like to see our name at the top of the medal count. That's very important.

And I think that our institutions are are important. Fields with which we can continue to develop that athletic talent and so she's proposed things like a national sports gambling tax that could be used to, uh, for the benefit of Olympic sports to subsidize those. So I think it's going to take some creative thinking and Matt Brown, who has been on our show and is really a great authority in this area. No one's been covering it better.

I think than him and you can find him on on twitter at at Matt Brown, E P. He wrote today in extra points, uh, that. To end up with that trade off where, uh, the student athletes are employees, but we lose all of these different varsity sports. That that would be a real tragedy because it would be a failure of imagination. And I think that the N C double A by and large has invested all of their kind of put all their eggs in this basket of asking for antitrust protection so that they can come up with new rules without the fear of getting sued. And, um, and that maybe they haven't necessarily considered that there are other ways forward.

And so, um, one thing that he mentioned is why don't they seek antitrust protection to curb or cap the, uh, the engrossed salaries of, uh, of coaches and administrators, right? Like that's going to happen, right? Right. Exactly.

It's like Congress voting against a pay raise for themselves. Good luck. Uh, I just, I think that there are definitely different ways forward and it may not be that every sport continues to exist, but I'm hopeful that there are enough smart people with enough invested. In the true intangible qualities of intercollegiate athletics and what they add to campus life and what makes it unique about the United States to have these opportunities for students going to college, not only to participate in the sports, but to have this culture and community where you're chasing excellence and achieving on the field and on the court.

And so I'm hoping that there are enough people that really care about that, that they will actually invest their time and effort and resources into coming up with a plan that will allow for those opportunities to continue to exist in the future. Tarun Sharma, I appreciate your time, sir. Uh, first time we've spoken in the new year, Matt, by the way, Matt Brown's a frequent guest on this program. We have talked with him about this, uh, a lot of it. I appreciate.

Yeah, he is dynamite. I appreciate your time, sir. We'll talk again soon. All right. Thank you, Adam. You got it.

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