Florida State, Clemson and the ACC have agreed in principle to settle their dueling lawsuits, stabilizing membership for the near-term and adding a second innovation to the conference’s revenue-sharing model.
Governing boards of the three parties are scheduled to vote on the settlement Tuesday, and approval would end more than 400 days of litigation. The entanglements began in late December 2023, when Florida State and the ACC sued one another, and escalated in March 2024, with Clemson and the league filing actions against the other.
ESPN and Yahoo Sports broke the settlement news Monday, which sources quickly confirmed.
In settling the cases, which have been heard on parallel tracks in Florida, South Carolina and North Carolina, FSU, Clemson and the ACC’s 16 other members will alter the financial penalties for withdrawing from the conference and add a brand-value component to the revenue-sharing formula.
The latter will reward those schools that drive the largest television audiences, in football primarily and men’s basketball secondarily. The Tigers and Seminoles are the ACC’s most-recent football national champions and figure to benefit the most from the change.
ESPN reported that 60% of the league’s annual television revenue would be distributed based on five-year, rolling TV ratings, with 40% split evenly among all members. The ACC reported $481.7 million in media rights for 2022-23 on its most recent tax filing.
In joining the ACC last year, Stanford, Cal and SMU agreed to smaller shares of media revenue, with the Mustangs forgoing any conference TV share for nine years. Those concessions translate to an incremental, $600 million windfall for the long-standing members, league officials have said.
The top television draws could earn up to $15 million more annually, while others receive as much as $7 million less, according to ESPN.
Acknowledging brand value, long advocated by Florida State athletic director Michael Alford and the university’s Board of Trustees, comes on the heels of what ACC officials dub a “success initiative,” which rewards the league’s top on-the-field performers in football and men’s basketball.
The bonuses started last fall, and as the Virginian-Pilot and Daily Press reported in December, College Football Playoff qualification, coupled with top-25 rankings and bowl eligibility, earned Clemson and SMU approximately $7.2 million each.
Neither advanced in the playoff, but an ACC team that wins a football national title would net $20 million-$25 million from the success initiative.
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The drastic reworking of the revenue-sharing model is in response to the Big Ten’s and SEC’s burgeoning financial advantages, a long-simmering concern that boiled over when Florida State and Clemson challenged the ACC’s grant of media rights and exit fee in court.
The grant conveys each school’s television rights to the conference through 2035-36, and FSU’s counsel estimated that if the grant and exit fee were strictly enforced, departing the league would cost the school more than $600 million. Under the settlement’s terms, the withdrawal penalties would decrease markedly after 2030, ESPN reported.
Since the spring of 2023, ACC commissioner Jim Phillips has shepherded the league through two revenue-sharing innovations, the contentious additions of three members — Clemson, FSU and North Carolina opposed the expansion — an extension of a long-term television contract with ESPN through 2036 and, pending Tuesday’s votes, the settlement of lawsuits that many believed would splinter the conference.
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