Sources: ACC, Clemson, FSU renew talks on revenue distribution

Talks between Clemson, Florida State and the ACC have ramped up in recent weeks, according to sources, on a proposal that would allot a greater share of revenue to schools based on brand valuation and television ratings, as well as potentially alter the expiration of the league’s grant of rights — which currently runs through 2036 — in exchange for the Tigers and Seminoles dropping their lawsuits against the conference.

According to multiple sources within the league, the conversations are preliminary and the sides are not close to an agreement, but the conversations represent a strong signal that Florida State and Clemson are open to remaining in the conference under more favorable financial terms.

The proposal, which was formulated by Clemson and Florida State and discussed by the league’s presidents during Tuesday’s regularly scheduled meeting, includes additional money going to schools with better ratings success in football and basketball.

While the proposal has not been widely distributed or discussed among conference athletic directors, administrators from more than a half-dozen schools who spoke with ESPN said they would at least be open to some altered revenue split.

In 2022-23, the ACC distributed an average of $44.8 million per school, roughly $7 million less than the SEC; however, that difference is expected to grow to more than $30 million when accounting for the SEC’s new television contract, which began this year.

Florida State athletic director Michael Alford has called the forthcoming revenue gap an existential threat, and he pushed for the ACC to divide revenue unequally during the league’s 2023 spring meetings, asking for more money to go to schools that had success on the field as well as those that drew the highest ratings for television. The league ultimately agreed to institute a new revenue-sharing policy dubbed “success initiatives” that would reward programs that made bowl games, the College Football Playoff or the NCAA men’s and women’s basketball tournament with a higher share of postseason revenue, but at the time, ADs were not interested in any plan that included brand valuation or television ratings, too.

In the months that followed, however, Florida State and Clemson filed lawsuits against the ACC in an effort to extricate themselves from the league’s grant of rights, which binds each member’s media rights to the ACC through June 2036. The ACC countersued both parties in North Carolina. To date, little movement has occurred on the legal front, and should the cases go to trial, a final resolution to the lawsuits could still be years away, according to attorneys for all sides. As part of a judge’s ruling in Leon County, Florida, the sides were required to enter into mediation, which is when discussions about ratings-based revenue splits took on new life.

Within the proposal put forth by Clemson and Florida State, the term of the grant of rights would also be reduced — potentially as early as 2030 — to better fall in line with the expiration of TV deals in the Big 12 and Big Ten.

While the basic talking points of the proposal had some support within member schools, there were significant questions about the details. As one athletic director who supported the general idea noted, properly evaluating something like TV ratings can be difficult with numerous outside factors influencing kickoff times, networks and ratings share that may not directly reflect a program’s value.

Several administrators who did not support the proposal did admit there was a potential incentive to continue discussions if it helped insure the future of the conference for the foreseeable future, with one noting that it would be better than seeing the ACC fall apart completely and another suggesting a brand-based revenue split could be inevitable for every league as TV contracts continue to grow and leagues continue to expand.

The ACC is also in talks with ESPN, which holds an exclusive option to extend the league’s television contract from 2027 through 2036. ESPN must pick up or decline the option by February 2025.

The ACC declined to comment on the status of discussions on changes to the revenue distribution model, but in May, commissioner Jim Phillips said he was open to all options that would secure the league’s standing.

“You have to stay optimistic,” Phillips said, “and you work through these things. We’ll manage what we have to manage, and I’m always optimistic about a really good ending out of this situation. I won’t have a change until somebody else tells me different. But am I going to fight for the ACC? Absolutely. That’s my responsibility.”