Evolution of Conference Realignment

Evolution of Conference Realignment 

By Hunter DeSantis

Recently, you may have noticed that college sports have begun to look very different than they used to. It’s not just NIL and revenue-sharing, conference realignment has also completely upended how we previously thought about college sports. Watching schools like UCLA or USC travel across the country to play midweek conference basketball games against Rutgers or Penn State has been a bizarre experience over the last two years.

Conference realignment can happen for a number of different reasons, but the primary reason almost always seems to be the same thing, money. Schools are increasingly making decisions based on projected revenues from media rights deals. This is why schools such as Oklahoma and Texas chose to leave the Big 12 for the SEC, or why USC, UCLA, and Oregon opted to join the Big Ten. Conference realignment is not a new concept, but the speed and scale of recent changes have been unprecedented. With those changes comes additional legal concerns for both conferences and universities.

When a university decides to leave its conference for a new one, it can result in significant legal and financial consequences. This is because conferences typically structure their media rights deals for long-term periods. As a way to lock these universities into those agreements, nearly all major collegiate athletics conferences have a “Grant of Rights” agreement with their respective member institutions.

A “Grant of Rights” is an agreement between a conference and its members (the schools within that conference) where the members agree to transfer their media rights to the conference for a set period of time. The two key features of a Grant of Rights are exclusivity and a fixed duration of time. In practical terms, this means the conference receives full and exclusive broadcast rights to its members’ games, and the agreement remains in effect for a set period that often lasts many years. A notable provision in the Big 12 conference Grant of Rights agreement is that even if a school leaves the conference, the conference still controls that team’s media rights until the agreement expires.

A real-world example of how Grant of Rights agreements affect conferences and their member institutions can be seen in the now settled lawsuit between Florida State University (FSU) and the ACC. Per the ACC Grant of Rights agreement with its member schools, a school attempting to leave the ACC prior to the expiration of the agreement could have faced exit costs of up to $572 million. In December 2023, FSU filed a lawsuit against the ACC alleging the exit fees were excessive and legally unconscionable. After approximately 15 months of litigation, the lawsuit was ultimately settled.

The settlement resulted in a reduced penalty for leaving the conference early, an amount of $165 million, beginning in 2026. The fee would then decline by $18 million per year before stopping at $75 million in the 2030-31 academic year. As long as an ACC school pays the exit fee, its media rights would remain its own to sell. Despite the fact a settlement was ultimately reached in this case, such outcomes are never guaranteed, and it still took over 15 months of litigation to reach settlement. The risk of being unable to reach a settlement is the prospect of long, drawn-out legal battles that could bring negative publicity either to the conference or the departing university.

As conference realignment is unlikely to end, the future of college sports may continue to include legal battles over a number of different issues. We have already seen protracted lawsuits regarding revenue-sharing, NIL deals, and employment status of student-athletes. Moving forward, legal disputes over media rights deals, exit fees, and conference governance will likely play a significant role in shaping the next era of college athletics.