The Atlantic Coast Conference, along with Clemson University and Florida State University, has reached a significant revenue-distribution settlement that aims to restore stability after a series of legal disputes. This agreement marks a pivotal moment, allowing these institutions to move forward collaboratively.
On Tuesday, both universities approved a settlement designed to resolve ongoing lawsuits with the ACC. This deal modifies the revenue-sharing structure, potentially benefiting both Clemson and Florida State, known for their strong football programs. Additionally, it clarifies the long-term financial implications for any school considering leaving the conference.
While the settlement does not guarantee permanent security, it establishes a framework for the immediate future. The 2030-31 season now stands out as a crucial benchmark, yet the agreement provides a sense of stability for a conference that has faced skepticism regarding its viability in light of increasing financial disparities with the Southeastern Conference and the Big Ten.
Commissioner Jim Phillips expressed optimism, stating, “Today’s resolution begins the next chapter of this storied league and further solidifies the ACC as a premier conference.” The settlement allows for the dismissal of pending lawsuits in both Florida and the Carolinas, paving the way for a more unified approach.
The ACC’s Board of Directors, composed of university leaders, approved the agreement in a Tuesday morning call, followed by endorsements from the trustees at both Clemson and Florida State.
Clemson’s athletic director, Graham Neff, emphasized the significance of the new distribution model, stating, “A strong ACC is good for Clemson. And a strong Clemson is good for the ACC.” This sentiment reflects the interconnected nature of success within the conference.
The revenue gap has been a pressing concern, with schools in the ACC reportedly receiving around $6 million less per institution than those in the SEC, and $15 million less than their Big Ten counterparts, according to financial records from the 2022-23 season. The grant-of-rights agreement, which grants the ACC control over media rights until the end of its contract with ESPN in 2036, had also contributed to the tension, as leaving the conference would incur substantial exit fees.
The recent lawsuits filed by Florida State and Clemson highlighted these costs, while the ACC had initiated legal action against both schools. The settlement now outlines a clearer path for any potential early exits.
According to presentations at the Clemson trustee meeting, the exit fee is set at $165 million for the 2026 fiscal year, decreasing by $18 million annually until stabilizing around $75 million by the 2030-31 season. Despite the grant-of-rights stipulations, any school that pays the exit fee would retain its media rights.
This timeline aligns with the expiration of media agreements for the Big Ten and Big 12, potentially signaling a period of realignment in college athletics.
As the ACC moves forward, the recent extension of its media rights agreement with ESPN, now aligned with the ACC Network deal through 2036, offers further financial assurance. The conference’s expansion has generated an estimated $600 million in additional revenue, benefiting from new members who have agreed to reduced or no television revenue for the initial years.
The “success initiative” championed by Commissioner Phillips could yield approximately $25 million annually for schools, primarily linked to performance in the expanded College Football Playoff. This plan aims to motivate schools to enhance their programs to attract viewership and financial support.
Drew Weatherford, a trustee and former quarterback for Florida State, expressed pride in the progress made, stating, “We made some commitments 14 months ago to ensure we could do everything in our power to compete at the highest level, and I think we’ve done that here.”
