ESPN has agreed to exercise its option to continue broadcasting ACC sports through 2036, sources told on Thursday.
This agreement is a crucial step toward bringing stability to the ACC. With the TV deal settled, the conference is now working on reaching a resolution with Clemson and Florida State to potentially end their ongoing lawsuits against the ACC.
ESPN had until February 1 to pick up the option on the 20-year contract signed in 2016, which helped launch the ACC Network. If ESPN had not accepted, the partnership would have ended after the 2027 season.
After ESPN agreed to pick up the option, which the ACC board of directors approved on Wednesday, the conference is working on additional “value adds,” such as creating more high-profile matchups in football and men’s basketball to increase content on the networks. This could help build a new revenue distribution model and work toward a settlement with Clemson and Florida State.
Some athletic directors mentioned that the ACC could use its relationship with Notre Dame to create more games with the conference’s top teams. Notre Dame athletic director Pete Bevacqua recently said he was open to scheduling more games against Clemson.
Notre Dame already plays five to six regular-season football games against the ACC each year and is part of the conference in all other sports.
Discussions about the ESPN option ran alongside talks between the ACC and Clemson and Florida State about a new revenue distribution model. This plan aims to address concerns about financial disparities between the ACC and the Big Ten and SEC, which have bigger TV contracts.
Under the proposed plan, a portion of the ACC’s TV revenue would go into a “brand” fund. This money would be distributed to schools that generate the most revenue in football and basketball, with Clemson, Florida State, Miami, and North Carolina likely to benefit the most.
If this agreement is finalized, sources say Clemson and Florida State are expected to drop their lawsuits.
Clemson’s lawsuit was mainly focused on determining the cost of leaving the ACC, rather than an intention to leave the conference. Florida State has been more vocal about testing the waters but has maintained it only wants to explore options, not necessarily leave the ACC.
Whether either school would find a place in another conference remains uncertain. Securing media rights, which each school signed over to the ACC in 2016, would have been crucial to any potential move.
ACC sources suggest that the vote on the new revenue distribution plan may not be unanimous. However, one administrator said a reduction in distributions might be acceptable if it leads to stability in college sports, which is currently facing major changes in its structure.
The collapse of the Pac-12 and the decline in the value of Oregon State and Washington State programs have made negotiations for a settlement more appealing.
The new brand distribution fund would be in addition to the ACC’s “success initiatives,” which were approved in 2023. These initiatives are funded by revenue from the expanded College Football Playoff and payouts from ESPN for the conference adding new members like Stanford, California, and SMU in 2024.
SMU agreed to give up its TV revenue for its first nine years in the ACC, while Cal and Stanford will receive only 30% of their share.
The ACC’s success initiatives, which started this year, offer extra revenue to schools participating in postseason games. The brand initiatives would be available to all ACC schools, but the top programs would likely have an advantage. Specific metrics for these initiatives have not yet been decided.
With both the brand and success initiatives, it is expected that ACC schools could reduce the financial gap between Big Ten and SEC schools to just a few million dollars annually.
As early as February 2023, Florida State’s Alford began pushing for a change in how the ACC’s TV revenue is distributed, focusing on teams that provide the most brand value and television ratings. Alford claimed that Florida State provided about 15% of the value in the ACC’s media deal but only received 7% of the revenue.
The ACC has been in legal battles with Florida State and Clemson for over a year, as both schools filed lawsuits in their home states, hoping to break free from a grant of rights agreement that could cost them as much as $700 million to leave. The ACC countersued to preserve the grant of rights through 2036.
Clemson and Florida State argue that the ACC’s television contract, which brings in about half of what the Big Ten gets from Fox, puts them at a significant financial disadvantage compared to SEC and Big Ten schools, making it harder to compete for national championships.
As part of a settlement, Clemson and Florida State are asking the ACC to reduce penalties for leaving the grant of rights after 2031, when the TV deals for the Big Ten, SEC, and Big 12 are set to expire.
