The ACC, Clemson and FSU are talking increased revenue distribution: Is it enough?

Could the ACC be coming to the table with a better deal for Clemson and Florida State? (Photo: Ken Ruinard / USATODAY)

David Hood - Senior Writer - Wednesday, September 18 2024

Is the Atlantic Coast Conference finally coming to its senses? Is it too late?

Ross Dellenger, the Senior College Football Reporter for Yahoo Sports, released a story late Tuesday that detailed how the ACC is exploring a new revenue structure that would end the litigation between Clemson and the ACC, and Florida State and the ACC.

Both schools are currently involved in lawsuits with the league over the Grant of Rights, the media rights deal with ESPN that runs through 2036. Leaving the league before the end of the deal brings heavy financial penalties and a loss of owning those media rights until the end of the contract, the ACC is arguing in lawsuits currently. In other words, a school that leaves the conference would still have all of its media rights (televised games) owned by the ACC, they argue.

Dellenger wrote: The conference’s presidents recently examined a proposal that would distribute revenue differently to league members in a move to provide stability and preserve the membership of Florida State and Clemson. Nothing is imminent and particulars of the deal remain mostly private, but the structure’s ultimate goal is to resolve a dispute with the Tigers and Seminoles, both suing the conference in an attempt to exit the league.

Details around the new revenue structure remain murky, but leaders have reviewed a plan to create a separate pot of revenue to be divided based on media value metrics. This separate distribution would be specifically tied to a school’s television viewership ratings for football and potentially basketball.

The league would also examine amending, or shortening, the length of the Grant of Rights.

It’s important on the Clemson front to note a few things:

*This is still in the conceptual stages, or infancy, and talks are ongoing among the league’s presidents. There is no proposal in place, and details are in the beginning stages of being worked out.

*The payout for the ACC schools from the media rights deals is inferior to the SEC and Big Ten and puts the league schools at a competitive disadvantage due to the monetary discrepancy. For instance, during the 2022-23 year, the ACC distributed an average of $44.8 million per school while the SEC was around $7 million more.

However, that difference is expected to grow to more than $30 million with the SEC’s new media rights deal, which began this year,

If the two schools are willing to listen to what the ACC has to say, and if the ACC is willing to bring this to the negotiating table, one would think that the re-structured amounts would be significant. Meaning it would have to bring the schools on an even playing field with the schools in the other conferences. This wouldn’t mean, “Oh, we will add a couple of million dollars more for a bowl game.” This would be a significant addition of funds.

When Clemson made the College Football Playoff in six consecutive seasons, the payout was roughly $6 million. Clemson had to share that $6 million with the other schools in the conference, meaning that Pitt and Syracuse and Duke received the same share as the Tigers. The conference divides all bowl revenue, including CFP revenue, evenly among its members after reimbursing expenses to the participating institution. Clemson did receive the expense allotment provided by the CFP.

*Shortening the timeline for the GOR is another game-changer. As we’ve written before, ESPN will look at the ACC contract in February 2025. By that date, ESPN must pick up or decline the option and can choose to lower the payout, increase the payout, keep it the same, or nix the deal altogether.

The feeling around the world of conference realignment is that the next round of movement will occur towards the end of the decade, and a shortening of the contract (to perhaps 2028, 2029 or 2030) would buy the conference (and the schools) the time to assess the changing landscape.

*This would allow Clemson to stay in its current situation, remain on a financially even-footing with the other conferences, and essentially buy time until the next round of expansion, whether that is a super conference with the top schools breaking away or the conferences simply expanding.

*I also think it’s important to note that Washington and Oregon, in moving to the Big Ten, are taking a lesser deal to move. Unlike other Big Ten teams, which will earn around $60 million, Washington and Oregon are due for just $30 million. The agreement with the Big Ten will, however, see the Huskies and Ducks take a $1 million increase in their annual media revenue throughout the seven years of the conference media deal.

Would Clemson do that? Perhaps, if this deal comes to fruition, it would allow Clemson to not take a pay cut (for now) and be well-positioned to look towards the end of the decade and the next phase of realignment or expansion.

*And yes, my assumption is that ESPN is in the middle of this. If a deal gets done, with ESPN’s approval, the lawsuits would go away, and a re-written media rights deal would fall into place.

*This last part, to me, can't be overstated. Staying in the ACC through what would be an amended timeline gives Clemson College Football Playoff access. People in Clemson believe the football program is positioned to succeed, and the added revenue from appearances in the CFP would make Clemson, already a "heavy" in the league, even "heavier" with the distribution of dollars.

As Reba would say, this is your one chance Fancy, don’t let me down.