A decade or so ago the Big 12 and ACC were having discussions about playing future nonconference games against one another. Nothing as radical as realignment but enough that the Big 12 gave the ACC access to the league's most significant legal tool -- its grant of rights.
"It was professional courtesy more than anything," recalled Big 12 commissioner Bob Bowlsby.
The grant of rights contracts signed by schools, which literally "grant" the "rights" to broadcast their games to their respective conferences for the term of a league-negotiated media rights deal, have become the foundations of two Power Five conferences' stability.
While every conference holds grant of rights agreements with its member institutions, the ACC modeled its version entirely off the Big 12 document, giving the two conferences an "identical" legal backstop, according to a source who has reviewed both documents.
That has led observer after observer to refer to the contracts with a singular adjective: "Ironclad," Bowlsby said.
So ironclad, in fact, that Big 12 legal minds developed the strategy relying on a landmark 115-year old Supreme Court case that traced its roots back to British Common Law in the 1600s. So ironclad that the Big 12 incorporated itself in Delaware, a state so business-friendly that 65% of Fortune 500 companies file their incorporation papers there.
So ironclad that the verbiage in these contracts might have saved both conferences from near-extinction.
While Texas and Oklahoma did cause significant upheaval in leaving the Big 12, it cost the programs a combined $100 million to exit the league in 2024, a year before the Big 12's grant of rights was to expire. (The schools had already notified the Big 12 they wouldn't agree to an extension of those rights.)
On Wednesday, the ACC stiff-armed rumblings of a mutiny by going to a performance-based revenue model. It's seemingly unbreakable grant of rights quelled any talk of a more significant uprising.
An effort by seven programs -- led by Clemson and Florida State with Miami, North Carolina, NC State, Virginia and Virginia Tech in tow -- resulted in few options as the schools' legal departments have reportedly been attempting to find a way to break that agreement. The current ACC grant of rights binds the schools together until 2036.
Although not exactly a picture of harmony, the Big 12 and now the ACC have successfully retained their membership. While the ACC changed its revenue model this week, two years ago, the Big 12 rallied quickly adding BYU, Cincinnati, Houston and UCF to fill some of the void left by Texas and Oklahoma.
If programs try to leave conferences without proper notice or negotiation, the grant of rights ensures the departing schools' broadcast rights/revenues remain within their television contract. Court battles over grants of rights have largely been avoided in the realignment era (since 2010), though there have been some bitter fights over the years.
Before Texas and Oklahoma, the Big 12 lost Colorado, Missouri, Nebraska and Texas A&M in the early 2010s. As the SEC and Big Ten expanded, reaping increased media rights revenue along the way, they left the rest of FBS in the financial dust.
The issue now is not the SEC and Big Ten being ahead of everyone else, it's the gap between those two and the rest of their Power Five brethren. Once the new media rights contracts fully kick in, they will be earning at least $30 million more annually than the average ACC school.
That alone has caused consternation within the league. It would cost a reported $120 million for an ACC school to leave early, not counting a monster negotiation to get out of the grant of rights. But with 13 years to go on that ironclad agreement -- and with little leverage -- the ACC got its schools to fall into line.
The ACC concluded a period of unrest Wednesday by announcing it has adopted revenue "success initiatives." Teams that perform successfully in revenue-producing postseason competition will earn additional money, ending the traditional method of sharing revenue equally.
There was no other choice. Two industry experts with experience valuing media rights told CBS Sports that -- for all the complaining by those seven schools -- it is doubtful they would bring pro rata (equal value) if they were to depart the ACC for the SEC.
Those ACC schools seemingly had nowhere to go and lacked the financial will to challenge the grant of rights in court given its ironclad nature. Start with that Delaware incorporation.
"It was unusual to build a grant of rights around federal copyright law," Bowlsby explained of the Big 12's contract. "The thing that was important about that: any disputes would be heard in federal court in Delaware, not in a state court."
That a huge advantage for a league that might otherwise have to contend with Texas (Big 12) or Florida State (ACC) battling its conference with homefield advantage in a state court.
The Big 12 legal team had the answer when their 2012 TV deal was finalized. They needed a strategy that found a jet sweep around the 11th Amendment, which includes the concept of state sovereign immunity.
That 115-year old landmark Supreme Court case, Ex parte Young, circumvents state sovereign immunity to allow lawsuits in federal courts for injunctions against state officials if they act against federal law or the U.S. Constitution. It essentially lays the groundwork for a conference to sue a school leaving early for another conference.
The Stanford Law Review called the decision "the cornerstone of modern constitutional litigation."
Explained an attorney who has viewed the Big 12's grant of rights: "Every state has different sovereign immunity laws. Especially in Texas, it's very hard to sue a state institution like a state university. Ex parte Young is a way to try to get around those issues. It would allow you to sue the president of a university if he tried to take Team X to another conference [violating the grant of rights]."
Beyond Bowlsby, the persons behind the Big 12's grant of rights research and strategy did not wish to be identified.
Challenging the contract in court would expose a school to unknown and uncertain liabilities, both legal and financial. It would not know how much it would have to pay to get out, whereas exit fees are largely negotiable. Example: Maryland paid a $50 million exit fee to leave the ACC for the Big Ten in 2014.
In that shocking July 2021 development, Texas and Oklahoma announced they were leaving the Big 12 for the SEC after the existing grant of rights expired in 2025. The Big 12 quickly rallied to assemble an unequal revenue sharing plan for the two schools. Unlike what the ACC accomplished Wednesday, that strategy did not work for the Big 12.
Then it just came down to that negotiation. Earlier this year, the Big 12 announced a deal for the Longhorns and Sooners to leave one year early in 2024, netting the league $100 million.
Neither school dared challenge the grant of rights itself.
After Texas and Oklahoma declared their intentions two years ago, Bowlsby doubled back and vetted the vulnerability of his grant of rights with a New York litigation firm.
"I asked them to tear it apart," Bowlsby said. "They came back and said, 'This is ironclad. You can take it any federal court in the country and win.'"
Because of the rigid nature of the language contained within the grant of rights, Bowlsby added that any issue arising from it is "going to end up having to be a negotiation, not a court trial."
A costly negotiation at that.
An ACC league source last year told CBS Sports, at that time, it might have cost as much as $500 million total to exit the league, including its grant of rights, as there were then 14 years left on the deal. Other estimates have been lower but still significant.
The ACC is neither naïve nor innocent in this endeavor. It just finds itself with internal turmoil. Former commissioner John Swofford's daring raid to expand the league helped collapsed the old Big East. He negotiated a 2016 media rights amendment with ESPN that established the ACC Network and pushed the agreement out 20 years.
Now, as other conferences have passed the ACC, its grant of rights might as well be a one-ton blocking sled on every ACC practice field.
"Well, all I can say is that same grant of rights has been in other conferences, and no one has really challenged it," Miami athletic director Dan Radakovich told the Miami Herald this week. "So, not being a lawyer, I don't know the tenets of it. But just being a lay person, it must be pretty good if no one has tried to challenge it."