By AARON BEARD AP Sports Writer
The legal fights between the Atlantic Coast Conference and high-profile member schools Clemson and Florida State appear close to resolution, which could provide the league with a measure of stability for the coming years.
The league and the two schools have reached a proposed settlement that would include changing the league’s revenue-distribution model, a person familiar with the situation said Monday. The person spoke to The Associated Press on condition of anonymity because neither the league nor the schools have publicly addressed the deal, which requires all three to approve. ESPN first reported the details.
Trustees at Clemson and Florida State have each scheduled meetings for Tuesday. The FSU meeting specifically lists lawsuits involving the ACC on the agenda, while the Clemson meeting agenda refers to settling “athletic litigations.”
The ACC’s Board of Directors – made up of university presidents and chancellors – will also hold a call to sign off on the settlement Tuesday during a previously scheduled meeting, the person who spoke to AP said.
If approved, the settlement would incorporate viewership ratings into revenue distribution among member schools, which would increase payouts to schools generating the most TV interest. The upside could be $15 million or more for top-earning schools, while it could also result in a decline of about $7 million for others, the person told the AP.
The agreement would also provide clarity on the costs for a team to potentially exit before the expiration of a grant-of-rights deal — signed by all schools to give the ACC control of a school’s media rights — through the duration of the league’s TV deal with ESPN in 2036. Those costs had been a key subject of FSU’s December 2023 lawsuit, filed as it sought to explore potential membership in other leagues, and Clemson’s March 2024 lawsuit. The ACC had conversely sued both schools.
Approval would quell that threat for the league and Commissioner Jim Phillips, who has spent much of his four-year tenure working to find ways to enhance revenue for schools as the league faces an increasing gap behind the Big Ten and Southeastern conferences. That has included expansion and a success-driven boost to revenues in what he has previously called “aggressive” efforts to change the financial picture, along with ACC leaders discussing ways to rethink revenue distribution.
According to tax documents, the ACC distributed an average of $44.8 million to its 14 football-playing members (Notre Dame receives a partial share as a football independent) and a record $706.6 million in total revenue for the 2022-23 season, its most recent available year. TV revenue increased 67% from $288.6 million in the 2018-19 fiscal year before the launch of the ACC Network to $481.7 million for 2022-23.
Overall, the ACC ranked third behind the Big Ten ($879.9 million revenue, $60.3 million average payout) and SEC ($852.6 million, $51.3 million) for that same year, and ahead of the smaller Big 12 ($510.7 million, $44.2 million).
The settlement comes roughly a month after ESPN exercised its option to extend its media base-rights agreement, aligning that deal with a separate one that covers their partnership for the ACC Network through 2036.
It also comes in the first year of a Phillips-championed “success initiative” that allows schools to keep more of the money generated by their own postseason success, which could amount to about $25 million in a year — tied mostly to performance in the College Football Playoff. For example, Clemson and SMU each were set to earn $4 million for their first-round CFP appearances this year, which the amount increasing as a team plays deeper into the bracket.
As with that initiative, the revenue-distribution proposal designed around viewership would follow a similar goal for Phillips: the additional money would theoretically be accessible to any league member, incentivizing a school to field a program that viewers want to watch because of its elevated success.
With this model, 60% of league revenues would go into a pot to be distributed based on a rolling formula tied to TV ratings. The remaining 40% would be distributed equally, the person told the AP.
The league has 18 member schools, 17 in football, after realignment led to westward expansion with the additions of California, Stanford and SMU.
That expansion created $600 million in additional incremental revenue gains through the ACC’s ESPN deal. Additionally, the league that has long leaned on equitable distributions has Cal and Stanford taking reduced payouts (around 30%) for the first seven seasons before gradually increasing to a full share in the 10th season, while SMU is forgoing nine years of TV money.