For more than two years, North Carolina has secretly sunk more than $600,000 into legal bills for a project that, according to documents recently obtained by The Athletic, was known by only a code name: the Carolina Blue matter.
But a code name for what, exactly?
For UNC’s behind-closed-doors exploration of conference realignment and its future in the ACC, according to two senior school officials briefed on the matter.
The engagement began in September 2022 — 14 months after Texas and Oklahoma announced they were joining the SEC and less than three months after the Big Ten voted to add USC and UCLA — and has continued through at least November 2024, the documents show. That timeframe spans arguably the most turbulent period in ACC history, in which two of its most prominent members (Clemson and Florida State) sued the league to challenge contracts that bind schools to the conference and during which a top UNC official privately said his school must “explore every available avenue to depart a conference that is in financial decline,” according to an email The Athletic obtained through an open records request.
North Carolina’s explorations originated when it hired the out-of-state law firm Skadden, Arps, Slate, Meagher & Flom LLP as counsel “regarding commercial issues involving athletics,” according to a letter to the school’s general counsel. The agreement itself is vague, but the document was first produced in response to a public records request from the Tampa Bay Times last year for contracts with outside counsel on issues related to UNC’s conference membership, including realignment and TV rights.
Bills to UNC were also nebulous. The first, for work through October 2022, was for $39,170.15 for Skadden’s professional services “with respect to the Carolina Blue matter” — the first reference of the code name in the documents. Over 25 months, the cost of professional services/fees for the Carolina Blue matter topped $500,000, according to documents obtained by The Athletic.
Invoices in the Carolina Blue matter listed an additional $120,000 for court reporting, which is generally a reference to stenography services. The total includes $7,500 every month from June-November 2024. The bills do not specify the court case.
Two-plus years of bills and related email exchanges never explain the Carolina Blue matter. Skadden lawyers did not respond to questions about them. The university said it can’t comment on advice received as part of consultation with attorneys. And the UNC System — which oversees the flagship Chapel Hill campus and 16 other institutions — had no related records.
The two senior UNC officials, granted anonymity because they were not authorized to speak publicly on the matter, confirmed what the documents suggested but did not spell out directly: that the Carolina Blue matter is North Carolina’s behind-the-scenes look at realignment.
A source said that look could best be described as the university doing its due diligence amid a constantly shifting landscape, rather than an aggressive legal ploy. That said, about half of the matter’s total expenses — $310,000 — came from work during the first four months of 2024. That timeframe covers a pivotal period in realignment maneuvering and posturing: the immediate aftermath of Florida State and the ACC suing each other (just before Christmas in 2023); dueling lawsuits filed by the ACC and Clemson (March 2024); and North Carolina’s state university system seizing more conference realignment power from individual schools (February 2024).
It’s no coincidence when two of UNC’s ACC peers sued the conference, in response to the league’s TV deal falling far behind those of the SEC and Big Ten, that the Tar Heels followed suit in exploring their legal bounds.
The Athletic obtained a previously unreported email exchange that took place around that time, April 2024, between John Preyer — the chairman of UNC’s Board of Trustees, who was integral to the school hiring Bill Belichick as its football coach in December — and former trustee Chuck Duckett.
Duckett wrote that Tar Heels officials needed to “work together to protect UNC financially and with regard to our reputation.” The focus, Duckett wrote, should be on improving UNC’s finances without private equity — the school had preliminary discussions with multiple firms, according to documents obtained by The Athletic, before opting not to proceed — and asking the league for transparency instead of an “us versus the ACC” squabble.
Preyer responded: “I firmly believe that ‘protecting UNC financially’ requires us to explore every available avenue to depart a conference that is in financial decline and is primarily serving its bottom tier schools. While Carolina once led the ACC, that time is long gone. The current Commissioner is not serving our best interests and simply ‘asking’ for transparency will not get us anywhere but would be a welcome change.”
Preyer added, regarding a potential nine-figure fee required to leave the ACC, that he had, “no desire to disagree with our own team — particularly in public — but no one should not be making statements that quantify the exit cost at $600-700M. That perception only hurts us.”
In January, according to documents first published by The Assembly, UNC System president Peter Hans sent Preyer (and chancellor Lee Roberts) a memo temporarily suspending some of the Board of Trustees’ athletics authority because “instances continue to occur where members of the board appear to act independently of their campus’s administration in matters squarely within the responsibility of the chancellor.”
The documents collectively shed more light on North Carolina, a national wild card in the unstable landscape of conference realignment. Academically, UNC is a top-tier research university and is regarded as one of the nation’s finest public institutions. Its athletic department is one of the most well-rounded in the country; the Tar Heels’ men’s basketball team has six national titles, and its football team just hired Belichick, the six-time Super Bowl champion head coach. It’s the premier school in one of the nation’s 10 biggest states in current population and population growth. And its geography could mesh with either Power 2 conference, the Big Ten or SEC.
As Duckett put it in an email: “We have a landing spot if things blow up.”
Ten months after his message, things have not blown up. The ACC’s future looks brighter after ESPN recently picked up its option to extend its TV deal through 2036. Clemson and Florida State have not found an escape hatch without paying an exit fee north of $150 million and risking hundreds of millions of dollars in future TV revenue. The two schools and the ACC seem more likely to resolve their disagreements through revamped revenue models (tied to TV viewership and branding) than in any courtroom.
“Let FSU and Clemson pay the attorneys and see what happens,” Duckett wrote. “We all learn via their expense.”
Those expenses already have reached seven figures. From March through July 2024 alone, Clemson’s legal fees topped $1 million, according to invoices received through a public records request.
The lawsuits remain ongoing. Former Florida State athletic director David Coburn and former school president John Thrasher are scheduled to sit for depositions on Friday in Tallahassee.
(Photo of Ian Jackson: Grant Halverson / Getty Images)
