Florida State and Clemson will vote Tuesday on an agreement that would ultimately result in the settlement of four ongoing lawsuits between the schools and the ACC and a new revenue-distribution strategy that would solidify the conference’s membership for the near future, sources told ESPN on Monday.
The ACC Board of Directors is scheduled to hold a call Tuesday to go over the settlement terms. In addition, Florida State has called a board meeting to present the terms at noon ET Tuesday, and Clemson plans to do the same. All three boards must agree to the settlement for it to move forward, but sources throughout the league expect a deal to be reached.
According to sources, the settlement includes two key objectives: Establishing a new revenue-distribution model based on viewership and a change in the financial penalties for exiting the league’s grant of rights prior to its conclusion in June 2036.
This new revenue-distribution model — or “brand initiative” — is based on a five-year rolling average of TV ratings, though some logistics of this formula remain tricky, including how to properly average games on the unrated ACC Network or other subscription channels. The brand initiative will be funded through a split in the league’s TV revenue, with 40% distributed evenly among the 14 longstanding members and 60% going toward the brand initiative and distributed based on TV ratings.
Top earners are expected to net an additional $15 million or more, according to sources, while some schools will see a net deduction in annual payout of up to about $7 million annually, an acceptable loss, according to several administrators at schools likely to be impacted, in exchange for some near-term stability.
The brand initiative is expected to begin for the upcoming fiscal year.
The brand fund, combined with the separate “success initiatives” fund approved in 2023 and enacted last year that rewards schools for postseason appearances, would allow teams that hit necessary benchmarks in each to close the revenue gap with the SEC and Big Ten, possibly adding in the neighborhood of $30 million or more annually should a school make a deep run in the College Football Playoff or NCAA basketball tournament and lead the way in TV ratings.
The success initiatives are funded largely through money generated by the new expanded College Football Playoff and additional revenue generated by the additions of Stanford, Cal and SMU, each of whom is taking a reduced portion of TV money over the next six to eight years, while the new brand initiative will involve some schools in the conference receiving less TV revenue than before.
As a result of their inclusion in the College Football Playoff this past season, SMU athletic director Rick Hart said the Mustangs and Tigers each earned $4 million through the success initiatives.
Sources have suggested Clemson and Florida State would be among the biggest winners of this brand-based distribution, though North Carolina and Miami are others expected to come out with a higher payout. Georgia Tech was actually the ACC’s highest-rated program in 2024, based in part on a Week 0 game against Florida State and a seven-overtime thriller against Georgia on the final Friday of the regular season.
Basketball ratings will be included in the brand initiative, too, however at a smaller rate than football, which is responsible for about 75% of the league’s TV revenue.
If ACC commissioner Jim Phillips is able to get this to the finish line Tuesday, it would be a big win for both him and the conference during a time of unprecedented change in collegiate athletics — particularly for a league that many speculated would break apart when litigation between the ACC, Florida State and Clemson began in 2023.
Both schools would consider it a win as well after they decided to file lawsuits in their home states in hopes of extricating themselves from a grant of rights agreement that, according to Florida State’s attorneys, could have meant paying as much as $700 million to leave the conference. The ACC countersued both schools to preserve the grant of rights agreement through 2036.
While the settlement will not make substantive changes to the grant of rights, it is expected that there will be declining financial penalties for schools who exit prior to 2036 with the steepest decreases coming after 2030 — something that would apply to any ACC school, not just Clemson and Florida State.
This was seen as a critical piece to the settlement, allowing flexibility for ACC schools amid a shifting college football landscape, particularly beyond the 2030 season when TV deals for the Big Ten (2029-30), Big 12 (2030) and the next iteration of the College Football Playoff (2031) come up for renewal.
The specific financial figures for schools to get released from the grant of rights were not readily available. But the total cost to exit the league after the 2029-30 season is expected to drop to below $100 million dollars, sources said.
The current language would require any school exiting prior to June 2036 to pay three times the annual distribution — a figure that would be about $120 million — plus control of that team’s media rights through the conclusion of the grant of rights.
This was seen as a critical piece to the settlement, allowing flexibility for ACC schools amid a shifting college football landscape, particularly beyond the 2030 season when TV deals for the Big Ten (2029-30), Big 12 (2030) and the next iteration of the College Football Playoff (2031) come up for renewal — a figure Florida State’s attorneys valued at more than $500 million over 10 years.
Sources told ESPN that there’d just be one number to exit the league, not the combination estimated by FSU of a traditional exit fee and the loss of media from the grant of rights.
In addition to securing the success and brand initiatives, viewed within the league as progressive ideas to help incentivize winning, Phillips also guided the recently announced ESPN option pickup to continue broadcasting the ACC through 2036.
