Prior to becoming Florida State’s athletic director, Michael Alford was standing at the crossroads of collegiate athletics where he could see the lights of two freight trains — each bearing landscape-tilting dynamite — heading toward an inevitable collision.

One carried carloads of multi-billion-dollar anti-trust judgements, first Alston v NCAA, followed by the House v NCAA settlement, which willimpact each school's athletics budgets by $25 million or more per year. The other carried competition-tilting media rights’ contracts that will provide the schools in two of the Power 5 conferences — the SEC and the Big Ten — with $40 million more in television revenue each year than any other school will receive.

And still, Alford took the job.

Three years later, Florida State’s athletic director is standing at the scene of the crash, assessing the damage, and running spreadsheets to build a path to fund the future.

The collision of the two most consequential forces in collegiate athletics was the subject of an exclusive Osceola interview with Alford and the following series of stories that ran the last few weeks:

A transformational time for FSU, college athletics

Outlining specific benchmarks for ACC success initiatives

FSU-ACC lawsuit will take years to resolve

FSU exploring options to expand baseball, softball rosters

FSU's ambitions extend to women's sports, launch of lacrosse

In this column, The Osceola sums up the series, with a look at the actions Florida State University has taken, or will take, to meet nearly $85 million of new financial challenges brought about by federal mandates: $45 million in annual costs for revenue sharing, Title IX and in-direct expenses for Name, Image and License, while funding it with $40 million less in media rights revenue than SEC and Big10 schools will receive.

Let's put this existential financial crisis into perspective. FSU's athletic budget in 2023 was $172 million according to the Knight-Newhouse College Athletics Database, double what it was in 2013 when the FSU athletics budget was $84.77 million, and triple the amount spent ($56.41 million) when reporting began in 2005.

By comparison, Ohio State led the Big Ten in athletic budget in 2023 with $276,839,796 in expenses, while the big spender in the SEC, Texas A&M, spent $279.188 million. The schools in those two conferences will have to manage the same expenses as every ohter athletics director, but the schools in those conferences will have an additional $40 million in revenue to do it with their new media rights contract than FSU or the schools in any other conference will receive.

Let’s start with Alston v. NCAA, the first antitrust case the Supreme Court has heard against the NCAA in 40 years, in which the Court ruled unanimously that the NCAA business model engages in price fixing and therefore violates the Sherman Antitrust Act.

While the ruling focused on specifics, Justice Brett Kavanaugh wrote a strong rebuke of the collegiate model in his concurring opinion. “Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate. And under ordinary principles of antitrust law, it is not evident why college sports should be any different. The NCAA is not above the law.”

The 9-0 verdict and terse opinion sent a clear message, heard loud and clear by would-be plaintiffs, the NCAA, and the major conferences. To mitigate additional billions, the NCAA and the conferences sought settlement on the next anti-trust case on the docket — House v NCAA — where the players seek a share of revenue.

Should the settlement receive the managing judge’s approval, it would require each athletics department to share an estimated $22.5 million per year with players, plus the potential to expand scholarship/roster size to 105 in football, 34 in baseball, and 25 in women’s softball.. Taken together, the settlement will add at least $25 million in expense to each school’s annual athletic budget.

The reaction to the Alston case ushered in the NIL and Transfer Portal era, which allows student-athletes to earn money for the use of their name, image or likeness, and to transfer as often as they like without losing a year of eligibility much like college coaches can do. While the funding for NIL is technically not a direct athletics expense, because it is currently organized and paid for by a collective, the funding for NIL (upwards of $15 million annually) is often solicited from the same corporate sponsors and individual donors as the athletics department depends upon to fund its operating budget.

The trains have one thing in common, anti-trust judgements against a business model that the courts rulei illegal.

Up until 1984, the NCAA controlled television rights and distributed revenues equally. Whether the team playing was a high- or low-profile team, the NCAA paid them an equal share of revenue to keep the playing field level. Oklahoma and Georgia screamed anti-trust, which led to NCAA v. Board of Regents of the University of Oklahoma. The Supreme Court ruled against the NCAA, which forced television rights out of the NCAA’s control and into the hands of individual schools, or conferences who negotiate on the school’s behalf.

It was that 1984 court ruling that now allows the SEC and Big 10 conferences to negotiate a television contract with a network that will pay its schools twice as much as the network will pay schools in any other conference. And the Court ruled blindfolded to the disruption of competition,the NCAA warned about four decades ago.

“It became very clear the future of college athletics is really at a crossroads,” Alford told the FSU Board of Trustees at the January 2024 meeting following the filing of the BOT's lawsuit against the Atlantic Coast Conference. “Whether it's media contracts that present financial challenges or proposed recent changes by the NCAA (mandated by Federal Courts) that are going to impact everyone in this industry's operation budgets moving forward.

“Here at Florida State, we have to evaluate all of our options and make decisions here that are going to have a 10-, 20-year impact on us … But as I sit here, this isn't a relationship decision or issue at all. It is a simple math problem, a very clear math problem.”

In addition to the Federal Court’s recent anti-trust mandates, universities continue to manage Federal Title IX mandates since the late 1970s, and to that end Florida State announced the addition of a women’s lacrosse program as well as projects to address equity at an estimated cost of $5 million per year.

What will FSU and the other ACC schools do now that they find themselves with upwards of $30 million of mandated annual expenditures, plus the NIL? How will those schools fund those expenses while competing against teams in those Big 2 conferences receiving $40 million of additional media rights revenue each year?

Florida State is exploring numerous paths to a solution.

“We’re going to run out every ground ball,” said Alford, a former collegiate baseball player.

Those ground balls include:

- Challenging the ACC contracts that bind FSU to the ACC

- Generating new revenue sources while cutting expenses

- Considering Venture Capital for an ACC buyout or to bridge the gap

- Seek Congressional legislation to create a legal version of collegiate athletics that does not violate anti-trust laws

Florida State and Clemson are involved in a very public legal challenge both institutions thought was necessary to get the court’s opinion on whether the ACC contracts are binding.

FSU felt it had exhausted discussion with the ACC on solutions, including uneven revenue sharing based on viewership or success initiatives, before it filed the lawsuit.

At the time of filing, FSU Board of Trustees Chairman Peter Collins explained: "Today we've reached a crossroad in our relationship with the ACC. We are faced with the fact that the ACC is locked in a deteriorating media rights contract at revenues far below other conferences. The ACC leadership is also not interested in further negotiations on unequal revenue sharing or larger success initiatives.”

Now 10 months old, the lawsuit is not expected to end anytime soon due to its complex nature.

“There is a ton (of complexities) and that’s why it’s going to take years,” Alford told the Osceola. “People don’t understand. They are like, 'Just leave.' I’m like, ‘It’s not that easy.’ That’s also why we started (the lawsuit) when we started, knowing the (SEC and Big Ten) contracts were coming, and the financial distance between the other two conferences would be growing.

“We pointed that out years ago, right?”

In a recent article with ACC officials under the condition of anonymity, the Athletic summarized the legal status thusly: “Short of uncovering some legal Hail Mary — one neither school has seemingly discovered, according to their legal actions to date — any unraveling of the league likely won’t be that easy or fast.”

The Athletic article also raised doubt about hope the upcoming February 2025 “look in” period with ESPN would provide FSU or Clemson an easy out in 2027 rather than 2036, asking this obvious question: “…both within the league office and member athletic departments, there’s no understood rationale for why ESPN would want out of its current deal with the ACC. Put another way, why would ESPN willingly relinquish the ACC’s television inventory — especially when it already has it locked in at a below-market-value rate for another decade?”

FSU needs to know, are these ACC contracts and buyouts binding?

“We have to ask the question,” Alford said. “As you have heard me say, ‘It’s not a relationship problem. It’s a financial problem.’”

“We had to start the process to get our questions answered about the future of the conference, so we can make sure that Florida State is put in the best position possible moving forward,” Alford said. “And we had to start that process when we did. It is a process.”

The Athletic article notes that if ESPN locks in the television contract with the ACC through 2036, “Then the league and its members are right back at square one: mired in court proceedings that, realistically, may take another decade to resolve.”

Many assume the lawsuit will end in a mediated settlement, but professional mediators say that negotiating with a conference is complicated by the fact the conference represents 18 schools (including Notre Dame as well as FSU and Clemson) plus corporate partners with diverse and vested interests.

We asked Alford if he thought mediation would be as complex as described?

“You can say that again,” he said.

Alford pointed to the ACC Success Initiative as an example of how long it can take to reach agreement. “There are schools that disagree with an award revenue distribution,” Alford said. “They want to stay with the pure collegiate model and that’s what makes it tough on (ACC Commissioner JIm) Phillips, too.”

Could mediation take years?

“(What led to this) has already taken several years,” he replied. “We knew that. We’re trying to get ahead of it.”

Phillips made the ACC’s opening position in mediation quite clear this past July at the ACC’s preseason media event, “We will fight to protect the ACC and our members for as long as it takes.”

While the lawyers lawyer, Alford has been running spread sheets, talking with other ADs, and looking for means to fund a competitive program while still in the ACC. Obviously, a portion of the funding entails generating new revenues and cutting expenses.

“We are working on it. Great question,” Alford replied. “It is going to look different administratively, in operational budgets. We’re just going through that exercise right now because my budgets get set, as you know, in January of (2025) for the following year. So we are figuring that out as we go through this fall.”

One source of new revenue will come from the ACC Success Initiative that Florida State fought for and could be considered fruit of this legal process. For the first time in Power 5 history, the ACC will pay success initiatives in football and basketball.

Alford is pleased with the initiative and while he notes it will not by itself bridge the $40 million gap with the SEC and Big Ten, it can be one plank of the bridge.

Alford told the Osceola that a school can earn $20 million to $25 million if it makes it to the College Football Playoff Championship game but there are initiatives along the way that can help. A bowl bid earns $2.75 million. A top 25 final ranking earns another $2.75 million. Winning the ACC Championship and the automatic CFP bid earns $4 million, and $4 million for advancing to the next round. A school will earn $6 million more for reaching the semifinals and another $6 million if it advances to the championship game.

There are also ACC Success Initiatives established in men’s basketball with initiatives in discussion for the women.

The ACC Success Initiatives are an ACC innovation which do not exist in any other conference, and one could imagine, are fruit born from Florida State and Clemson's dogged legal initiatives.

Additional, yet unripe fruit, may be ripening.

Yahoo's Ross Dellenger broke a story indicating the ACC Presidents met recently to revisit a "new revenue-distribution system which could reward schools for how valuable they are to television partners, one of the people said."

Sound familiar?

According to Associated Press, "The discussions internally and with Florida State are an extension of a mediation session last month between the conference and the school that was ordered by the Florida judge overseeing the lawsuit FSU’s board of trustees filed against the ACC in December, the people said...

"Yahoo! Sports first reported that ACC presidents were reviewing ways to tweak the league’s revenue-sharing structure that could appease its disgruntled members."

Alford told the Osceola he was in contact with athletic directors across the country, discussing ideas for generating new revenue to offset the coming train bearing $30 million in expenses.

"There are no silver bullets," he said.

The new financial model will have far-reaching effects on collegiate athletics as we knew it. “A little pendulum theory, you know, (athletic spending) is swinging back a little bit,” Alford explained of the new world order, requiring athletics to share revenue with the players, rather than increasing coaches’ salaries, building new facilities or other operating expenses.

Does that mean there will be cuts in coaches’ salaries and staff sizes?

“Coaches’ salaries are contractual," Alford said. "But, yeah, you have to look at everything. What they are all trying to do is win. So how do I get to a number with which we can win?”

The paradigm change has put all aspects of athletics under examination.

“I was talking to one of our coaches, and I said, ‘It’s going to be more like when I played.’ We were No. 1 in the country, and we traveled by bus, but I had three good meals a day and a place to live,” Alford reminisced. “That’s what it was. We have to examine (everything we do) and look where we can save.”

Alford is concerned the pencil sharpening will change the culture.

“We are going to have a contractual relationship more with our student-athletes,” Alford said. “I need to make sure that doesn’t impact our ability to have the special relationships we have with them now and the culture we have here at Florida State, which is so special.”

Tennessee athletic director Danny White announced a plan to add a 10 percent surcharge to all season and single-game ticket sales to generate revenue, what he terms a "talent fee" on top of a 4.5 percent price increase.

Tennessee estimates the 10 percent fee on 103,000 season tickets will cover about $10 million of the $30 million in additional expense. White believes calling it a talent fee is being transparent with his audience.

“It’s a talent fee, and it’s going directly to the talent,” White said. “It’s going to our student athletes as part of this new world order in college sports. So I know our fans will embrace it.”

Will it? Or by calling it a "talent fee" will it further alienate the fanbase with the players, many of whom fans believe are now making more with NIL than the season ticket holders.

These are the tough questions athletic directors must grapple with.

The decision for White at Tennessee is entirely different than it is for Alford at Florida State based on demand within 150 miles. The Vols routinely sell out 103,000-seat Neyland Stadium, with a 15,000-ticket waiting list, which is an entirely different demand than exists at Florida State, where historic highs in season ticket sales have been in the low 40,000 range, with another 17,000 seats guaranteed to FSU students.

The discrpency is in large part due to market size, where the Vols enjoy a market three times larger than the 'Noles.

There are 12.75 million people living within a 150-mile radius of Knoxville compared to 3.5 million within the same radius of Tallahassee. And the 3:1 ratio holds within 125 miles, as there are 6.78 million in the UT market compared to 2.2 million in the FSU market.

In addition to scarcity, seven of Florida's poorest counties reside within that 125-mile radius.

As a result, 70 percent of FSU's season ticket holders reside 150 miles or more from Doak Campbell Stadium and are forced to pay a two-night minimum often at $400 per night at local hotels.

While these demand realities have dampened what FSU's athletic directors have been able to generate from traditional season ticket sales, surveys indicated a strong demand for premium seats, which have a higher yield and allow a university to generate more revenue with fewer seats.

The aging Doak Campbell Stadium presented Florida State with a challenge to rebuild and an opportunity to generate more revenue, Alford told us.

Season ticket sales and premium seat contributions on the west side and Champions Club projects will fund the bonds on the stadium and football operations building (estimated at $350 million), as well as contribute to funding operations, Alford told us.

Seat sales have been brisk. The midlevel skyboxes sold out first, followed by Founders Loge boxes, then the lower level west sideline club seats. The club seats in the Champions Club are also selling well with all of the seats on the west side of the club sold with sales now continuing on the east side of the club. FSU has just opened sales of the chairback seats on the west side above row 25 -- which have a lower price point than the club seats below them -- and are expected to sell out quickly too.

The East Side project, which was funded in large part by Blueprint tax revenue, creates a better experience for Seminoles' fans many of whom travel great distances to Tallahassee and spend tens of millions of dollars in the community on hotels, restaurants and retail businesses.

The re-imagined stadium can also generate additional revenue throughout the year with concerts and other attendance-generating events.

Florida State has been investigating private equity since at least 2022, an investment that could be used to help fund operations, or to buy its media rights back from the ACC.

“We are examining multiple options in looking at this,” Alford confirmed with the Osceola. “We started the venture capital look in, but we didn’t do anything because we wanted to see how this House case (would settle) and receive a final clarification. We’re running all kinds of various financial models, and scenarios, in any possible way long term to provide the very best experience for our student athletes, so we can continue to compete for either conference or national championships. And what does that look like? We’re going to make decisions over the next few months.”

Venture capital (VC) is a form of private equity and a type of financing originally used by small businesses and startup companies with growth potential. In recent years, it has become attractive to collegiate athletic departments. Venture capital can come from private investors, investment banks and financial institutions, and can come with or without technical or managerial expertise.

University of Miami has entered into a venture relationship with Legends, a global premium experiences company, with whom Alford has a longstanding relationship.

The Legends - UM agreement is a first in collegiate athletics and encompasses all facets of revenue generation including athletics sponsorships, ticketing, annual fund initiatives and a retail merchandise store. Legends will also help UM with a campuswide effort to enhance partnerships of both athletic and non-athletic assets.

Legends Hospitality division is currently engaged with Florida State concessions and premium seating.

Many have called the optimum answer to the problem collegiate athletics now face. Others call it a moon shot, but years ago Alford and a group of athletic directors formed a committee to educate and lobby Washingtonians for legislation to provide anti-trust protections to preserve the collegiate model. It would be a carveout, if you will, of the Sherman Anti-trust Act, just as professional sports has managed to do.

Could the House settlement become a tipping point to move Congress to act?

After years of trips to Washington the matter has yet to make it to the floor of Congress for discussion.

“You know how many times I speak to those guys,” Alford said. “They are aware, and they ask the right questions. They are a little busy right now to take time to talk about the House case. But they do have an interest in making sure the collegiate model is kept intact, as best we can, because of the Olympic movement, and the love of sport, and for all these opportunities for these young men and women. And that is everyone in D.C. that I’ve spoken with at length regarding this. That is their concern.”

There are huge issues in this country during this election year, including conflicts in Ukraine and Israel, and while not high on the Congressional priority list, the crisis is of national interest to the 530,000 student-athletes who compete for an NCAA school each year and, according to a Pew Report, is of interest to 38 percent of Americans who enjoy college sports and 51 percent who watch Olympic sports.

“You look at the Olympic medals won, and where all these young men and women went to school. It is a huge part of our culture,” Alford said. “What you don’t want, hopefully never in my lifetime, is where you go to a model where our Olympic athletes are training at an academy and not using a collegiate model.”

The United States collegiate model is unique and benefits many first generation college students.

“We are the only place in the world that has this model, and it works,” Alford confirmed.

Other than the United States military, it is hard to think of another American institution that creates as many as 530,000 life-changing opportunities for the nation's youth, which you would think would resonate in D.C.

“Yes, sir, and that is a point that is kind of lost in the shuffle,” said Alford, who after multiple conversations with Senators and Congressmen, remains optimistic the collegiate-model train can be put back on the tracks.

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