Sources – ACC, Clemson and FSU renew talks on revenue sharing

Talks between Clemson, Florida State and the ACC have intensified in recent weeks, according to sources, over a proposal that would allocate a larger share of revenue to the schools based on brand valuation and television ratings, as well as potentially alter the expiration of the league’s rights lease (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 talks are preliminary and the sides are not close to a deal, but the discussions represent a strong signal that Florida State and Clemson are open to remaining in the conference on more favorable financial terms.

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

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

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

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

In the months that followed, however, Florida State and Clemson filed lawsuits against the ACC in an attempt to free themselves from the league’s rights grant, which ties each member’s media rights to the ACC through June 2036. The ACC countersued both sides in North Carolina. To date, there has been little movement on the legal front, and if the cases do go to trial, a final resolution of the lawsuits could take years, according to attorneys for all parties. As part of a judge’s decision in Leon County, Florida, the parties were required to enter mediation, which is when discussions over revenue splits based on ratings took on new life.

Under the proposal put forward by Clemson and Florida State, the vesting period would also be shortened, potentially starting in 2030, to better align with the expiration of television deals in the Big 12 and Big Ten.

While the basics of the proposal had some support among member schools, there were significant questions about the details. As one athletic director who supported the general idea noted, properly evaluating something like television ratings can be difficult, as there are numerous outside factors that influence start times, networks and ratings that may not directly reflect the value of a program.

Several administrators who did not support the proposal admitted there was a potential incentive to continue discussions if it helped secure the conference's future for the foreseeable future, with one noting it would be better than seeing the ACC fall apart entirely and another suggesting a brand-based revenue split might be inevitable for each league as television contracts continue to grow and leagues continue to expand.

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

The ACC declined to comment on the status of discussions about changes to the revenue-sharing model, but in May, Commissioner Jim Phillips said he was open to all options that would ensure the league's standing.

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