Details In ACC’s Legal Settlement Suggest Only Short-Term Stability
By David Glenn
Four months after the Atlantic Coast Conference announced the settlement of its dueling lawsuits with long-standing members Clemson and Florida State, it’s becoming increasingly clear that the league assured itself of — at most — only short-term stability.
Multiple media outlets obtained copies of the 68-page settlement agreement in early July, and most of the previously unspecified details are overwhelmingly favorable to Clemson and FSU, whose lawsuits had challenged the legality of the ACC’s unique combination of mega-million-dollar exit fees and its lengthier-than-most (from 2016 into 2036) Grant of Rights.
(Because of the legal settlement, there was no final judicial conclusion on the enforceability of the ACC’s framework. Whereas a North Carolina judge seemed to favor the conference’s perspective, a Florida judge clearly was receptive to some of FSU’s most important arguments.)
In its lawsuit against the ACC, Florida State had argued that it would have cost the Seminoles more than $500 million to leave the conference, given the league’s $130 million traditional exit fee and — under the league’s lengthy Grant of Rights — the loss of $429 million of the school’s future media-rights revenue.
Under the terms of the new legal settlement, the ACC’s exit fee will drop to a relatively measly $75 million in the not-too-distant future … and the Grant of Rights no longer applies at all. In other words, a departing school can simply pay whatever exit fee is in effect at the time (see schedule below) and take its media rights with it, too.
Academic Year: Revised (Total) ACC Exit Fee
2025-26: $165 million
2026-27: $147 million
2027-28: $129 million
2028-29: $111 million
2029-30: $93 million
2030-31: $75 million
2031-32: $75 million
2032-33: $75 million
2033-34: $75 million
2034-35: $75 million
2035-36: $75 million
Remember, Clemson, FSU and even other ACC schools initially became restless a few years ago, when it became clear that the conference — which once had boasted the highest per-school financial payout (mostly television-related revenue) for decades — was falling dangerously behind the Big Ten and the Southeastern Conference on money matters.
By the 2023-24 academic year, for example, when the ACC paid its member schools an average of roughly $45 million out of its shared conference revenue, the Big Ten paid out approximately $63 million per school, and the SEC paid out about $52-53 million per school.
Those financial gaps are growing with each passing year, because whereas the Big Ten (current deal runs from 2023-24 through 2029-30) and the SEC (2024-25 through 3033-34) signed recent contracts that reflected both their tremendous football popularity (much greater than the ACC’s overall) and the rising value of live sports TV programming, the ACC remains stuck in its long-term, below-market ESPN deal — signed back in 2016 — all the way through 2035-36.
To pacify Clemson and FSU, the league’s two strongest modern-day football brands (the past decade’s worth of TV numbers back that up), the ACC also agreed in its recent legal settlement to dramatic changes in its revenue-distribution model (changes the majority of schools had rejected for many years) and even outlined how the conference would handle the Tigers, Seminoles and perhaps others leaving for a “College Football Super League” at some point.
In a revolutionary move, the ACC became the first conference in NCAA history to incorporate TV metrics into its annual payout formula. Whereas 40 percent of the league’s money from its multi-media contracts still will be distributed equally among its qualifying members (remember that newcomers Cal, Stanford and SMU agreed to forgo a lot of money for many years), 45 percent will be distributed based on football viewership numbers, and the remaining 15 percent will be distributed based on men’s basketball viewership data.
While the ACC redacted large chunks of information from the publicly released version of its legal settlement, citing the “trade secrets” aspect of its relationship with ESPN, the bottom line is that its schools now — for the first time — will be rewarded financially based on the ability of their football and men’s basketball teams to attract large numbers of TV/streaming eyeballs.
The Tigers and Seminoles believe that this new ratings-related factor, along with the league’s recently adopted success initiative (which started in 2024-25 and directly rewards schools for College Football Playoff and NCAA Tournament participation/success), will enable them to keep pace with their wealthy counterparts in the Big Ten and the SEC.
Whereas those two prominent leagues still share their conference-related revenue almost equally (there are minor variations for long-standing members and sometimes much different rules for new members), the ACC is entering a brand-new reality in which one school could get a $75 million check from the league office in the same year someone else receives $50 million.
History suggests that unequal revenue-sharing doesn’t bode well for long-term relationships. In the Big 12, the first major conference that strayed from equal revenue-sharing, the four schools that always demanded more money were Nebraska, Oklahoma, Texas and Texas A&M. All four ultimately left the league, for the much bigger bucks of either the Big Ten or the SEC.
The ACC’s legal settlement seems to embrace exactly this sort of volatility. It even directly addresses the possibility that, at some point between now and 2036, there may be a “College Football Super League,” which could invite Clemson, FSU and perhaps others from the ACC.
In an interesting detail (“Option of Limited Withdrawal”) first reported by The Athletic, an ACC school would be permitted to play football in this theoretical league while keeping the remainder of its sports in the ACC. The cost? A football-only exit fee of either $75 million or half the league’s applicable exit fee (see above) at the time of departure, whichever is greater.
In all likelihood, the current ACC schools — even Clemson and FSU — probably want to see how things go over the next handful of years. The league’s revised exit costs, while no longer prohibitive, remain considerable. The success initiative is only one year old. The TV-related money initiative hasn’t even officially begun yet. Heck, the NCAA’s revolutionary new revenue-sharing model ($20.5 million per school in Year One) and roster caps just started, on July 1.
Leading up to 2030, however, things likely will get interesting again.
Even if no “Super League” is emerging at that point, the mighty Big Ten and/or SEC may want to further expand their geographical footprints, and their huge money may be too much for almost anyone to refuse. (The ACC’s reduced exit fee certainly wouldn’t be much of a hurdle.) The Big Ten’s massive TV deals, along with Notre Dame’s legendary football-only NBC contract (first signed in 1991), are scheduled to conclude with the 2029-30 academic year. The current College Football Playoff agreement also will be nearing its end (2031).
The ACC almost certainly will still be alive at that point, and it probably will survive decades into the future, too.
In exactly what form, though, who knows?
David Glenn (DavidGlennShow.com, @DavidGlennShow) is an award-winning author, broadcaster, editor, entrepreneur, publisher, speaker, writer and university lecturer (now at UNC Wilmington) who has covered sports in North Carolina since 1987.
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