Roughly 20 minutes past 10 a.m., peace came to the middle east, the Southeast, the Northeast, the Southern Plains, the Bay Area and every corner of the ACC’s scattered geography.
The governing boards of Clemson, Florida State and the conference itself approved settlement terms of lawsuits that threatened to devastate the conference. The agreement announced Tuesday ensures stability for the rest of the decade — and pushes the devastation off until at least the early 2030s.
Put another way: The ACC opted to kick the existential can down Tobacco Road.
Then again, the industry dynamics are so fluid, the legal challenges so great and the economic pressures so intense that short-term survival is the priority on campuses across major college football.
“If you can buy five or six years of stability in this crazy landscape, good for you,” an industry source unaffiliated with the ACC told the Hotline on Tuesday.
A settlement favoring Clemson and Florida State was the likeliest outcome the minute they began legal action against the conference, with the Seminoles firing the first salvo in late 2023.
The deal approved Tuesday has three key elements:
— Clemson and Florida State are dropping their lawsuits against the conference over the grant-of-rights agreement that binds each member’s media rights to the ACC. (Those rights are worth tens of millions of dollars annually.)
— The ACC will change its revenue model and allocate a significant portion of the media dollars to schools based on their TV ratings. (To this point, the ACC’s media revenue has been shared equally by the longstanding members.)
— The total cost to depart the conference will plunge from hundreds of millions — a combination of the exit fees and the grant-of-rights commitments — to just $75 million per school in the early 2030s. (The timeline coincides with the expiration of the Big Ten and Big 12 media contract cycles.)
The settlement constitutes a major victory for the plaintiffs and for Miami and North Carolina, which did not bring legal action against the ACC but sought the same outcome. Those four schools hope to eventually join the SEC or Big Ten and have the most to gain from both a ratings-based distribution model and reduced exit fees.
For everyone else in the ACC, including Cal and Stanford, the short-term stability is partially offset by long-haul uncertainty.
Let’s examine the implications of the settlement, starting with those directly involved and expanding across the land.
Florida State and Clemson: The ACC’s rebels got what they wanted in the short and long term. The new revenue model could stuff their coffers with as much as $20 million more annually than they would have otherwise received, allowing them to compete against the blue bloods in the SEC and Big Ten. And the reduction in exit fees offers them a chance to take advantage of realignment opportunities that surface in the early 2030s.
Cal and Stanford: The Bay Area schools are unlikely to lose significant revenue because they were already at a major disadvantage in that area, thanks to the partial-share terms of their membership agreements. The Cardinal and Bears are set to receive just 33 percent of the ACC’s media rights for seven years, followed by a two-year increase and then full-share membership in Year 10. But there’s a massive catch: By the time Cal and Stanford reach full-share status, in 2033, the biggest brands in the conference could be long gone and the ACC on its way to a major restructuring — or collapse.
The ACC: For the longstanding members, the settlement is about avoiding a messy court trial and securing a short-term home. The adoption of unequal revenue sharing means schools like Wake Forest, NC State, Boston College and Syracuse could relinquish several million dollars annually because of TV ratings. But they know what they need to do and when they need to accomplish it. “This gives everyone in the ACC a runway to secure a spot on the top tier,” the source said.
ESPN: The ACC’s media rights partner played an integral role in the process by agreeing in January to exercise its option to retain the conference’s media rights through 2036. It would not have taken that step without assurances that the conference would settle the lawsuit and remain intact. But the conference would not have settled with Clemson and Florida State without knowing the move would result in ESPN extending the media deal.
The Big 12: Near-term stability for the ACC impacts its peer conference on several fronts, with realignment — or the lack thereof — atop the list. (Had the ACC splintered, the Big 12 potentially could have provided a home for any interested schools.) On a practical level, ACC stability means the two conferences can stand together in much the same fashion as the SEC and Big Ten are doing, albeit with vastly fewer resources and less influence. (One possible option: a scheduling agreement.)
The Big Ten and SEC: The heavyweight conferences can begin making expansion plans for the early 2030s, knowing the ACC’s top football brands will have manageable exit fees. In that regard, the Big Ten has a slight strategic advantage: Its media rights contract with Fox, CBS and NBC expires in the summer of 2030, four years earlier than the SEC’s deal with ESPN.
The Power Four: The unprecedented adoption of a revenue model based on TV ratings amplifies a step the ACC took last year, when the schools agreed to a so-called success initiative. Taken together, they represent a codified differentiation in the way schools are treated financially — the biggest, most successful brands will receive the largest revenue shares.
And that sets a precedent for the Big Ten, SEC and Big 12 that could have mammoth repercussions over time.
Given the ACC’s step, we should expect the Big Ten to follow a similar path when it strikes a new TV deal. Why should Ohio State accept the same dollar amount as Purdue? Why would Michigan agree to the same deal as Minnesota?
Which means success on the field from 2025-29 will matter even more — the programs that struggle will be vulnerable to smaller revenue shares in the Big Ten’s next contract cycle.
That could be problematic for UCLA, for example, and it could impact Oregon and Washington in a related manner.
The Pacific Northwest schools agreed to receive half shares of Big Ten TV revenue under the current media deal assuming they would graduate to full-share status for the next cycle.
But if the Big Ten adopts a revenue distribution model based on success and TV ratings, there’s no guarantee of full-share status for anyone.
The full ramifications of the ACC’s settlement, both on conference realignment and revenue distribution, will take years to play out. But this much is clear: The peace is temporary.
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