Florida State University (FSU) and Clemson University are poised to resolve their legal disputes with the Atlantic Coast Conference (ACC) through a proposed settlement that includes significant changes to the conference’s revenue distribution model and exit fee structure. This agreement aims to address concerns raised by FSU and Clemson regarding their media rights and financial contributions, fostering stability within the ACC.
Proposed Changes to Revenue Distribution
Central to the settlement is a restructuring of how the ACC allocates its television revenue among member schools. The new model proposes dividing 40% of the conference’s revenue equally among all schools, while the remaining 60% would be distributed based on television ratings, favoring programs that generate higher viewership. This approach acknowledges the greater media value brought by schools like FSU and Clemson. As a result, top-performing schools could receive up to $15 million more annually, whereas institutions with lower ratings might see a reduction of approximately $7 million each year.
Modification of Exit Fees
The settlement also addresses the financial penalties associated with leaving the ACC before the expiration of its media rights agreement in 2036. Under the proposed terms, exit fees would gradually decrease, potentially falling below $100 million by the 2029-30 academic year. This reduction aligns with the expiration of media rights agreements in other major conferences, such as the Big Ten and SEC, and provides schools with more flexibility regarding their conference affiliations in the future.
Background and Context
The legal tensions between FSU, Clemson, and the ACC have their roots in disputes over media rights and revenue sharing. Both universities contended that their significant contributions to television ratings were not adequately reflected in the existing revenue distribution model. This dissatisfaction led to lawsuits aiming to secure a more favorable financial arrangement and clarify the terms of their media rights should they consider leaving the conference.
In January 2025, ESPN exercised its option to extend its broadcast partnership with the ACC through 2036, a decision that underscored the importance of long-term stability for the conference. This extension provided a foundation for renegotiating revenue distribution and addressing the concerns of member schools like FSU and Clemson.
Next Steps
For the settlement to be finalized, the boards of trustees at FSU, Clemson, and the ACC must approve the proposed changes. Meetings are scheduled for Tuesday, March 4, 2025, during which these governing bodies will vote on the agreement. If approved, the settlement is expected to bring an end to the ongoing litigation and establish a new revenue-sharing framework that better aligns with the media value generated by member schools.
Implications for the ACC
The resolution of this dispute is anticipated to enhance the ACC’s competitiveness and cohesion. By addressing the financial concerns of its prominent programs, the conference aims to retain its top-tier schools and maintain a strong negotiating position in future media rights discussions. This settlement represents a pivotal moment in collegiate athletics, highlighting the complex interplay between media contracts, revenue distribution, and conference realignment.
