JD PicKell: Why the ACC finds itself searching for a new revenue distribution plan

As ACC meetings in Amelia Island, Fla., take place this week, the conference’s revenue distribution model is under heavy scrutiny, with key power players looking to enforce some changes that would have them better compensated for the value they provide the league.

In those discussions and negotiations, the very real possibility of teams leaving the ACC has been bandied about.

“So here’s where it stands right now. The Grant of Rights runs through 2036 and even if you were to leave the ACC, it would cost a pretty penny for all these schools,” On3’s JD PicKell explained. “How much, who knows, but it’s at least 120 for the exit fee, $120 million to exit the ACC. Even if you get out of the ACC, the ACC still owns your broadcast rights.

“Now why is that a problem for these teams within the ACC? Teams in the SEC, teams in the Big Ten, are making a smooth $30 million per year more than these teams in the ACC. And so if you’re any of these brands, any of these schools, you expect to compete on a national level, on a national landscape.”

As lucrative TV deals continue to kick in for other conferences, the ACC is locked into one of the more long-term TV rights deals.

That has the conference’s revenue distribution payouts likely to lag significantly behind the likes of the Big Ten and SEC in the very near future, with that trend continuing for the foreseeable future unless the league can force some change.

“How are you supposed to compete with some of these teams when they have better resources consistently?” PicKell said. “And I’m not saying just one-off year you make a run at it. TCU did that last year, they weren’t the most well-resourced team. But I do think that you have to at least take a look at for sustained success it’s not wild to assume that you need better resources, you need on-par resources to compete with the teams you want to compete with.”

For now, the ACC still has considerable national relevance when it comes to the Power 5 conferences. The goal for the league is to ensure that remains the case.

It’ll take some hard negotiating and perhaps some outside-the-box thinking when it comes to revenue distribution, though.

And some current schools having seasons that could draw more eyeballs and give the conference a little more panache wouldn’t hurt.

“Florida State, perfect example this coming season,” PicKell said. “They expect to compete for a national title. Good for Florida State, same for Clemson. Expect to compete for a national title, good for Clemson. That’s fine in a one-off situation, but as time grows on, if you continue to go $30 million in the negative compared to your other teams in the SEC and Big Ten, that’s going to add up over time now. It’s going to add up.

“So they’re saying, ‘Listen, we’ve got to find a way to make some more money.’ And it sounds like that hasn’t gone well based on them having conversations with lawyers about trying to get out of the ACC, so this is where we find ourselves.”

Programs like Clemson, Florida State, Miami and North Carolina should drive the direction of the conversations and negotiations on revenue distribution at the ACC meetings. They’re the power brokers in a league that is in danger of being knocked down a peg in the pecking order.

“This was inevitable. This was going to happen,” PicKell said. “Whether it happened this week, whether it happened five years from now. It can only take so much time before these teams that expect to compete how they want to compete start saying, ‘Hey, uh, excuse me. We’re worth a lot of money. We’re worth a lot of eyeballs and we aren’t getting I think what we’re deserving of.’

“So these teams now are saying, ‘Well, we’ve got to figure this out. Something’s got to give here.’ So this was inevitable. You can’t tell me I’m worth this much and then see a smaller portion of the pie and then, oh, by the way, the teams that you’re competing with, they’re getting a larger piece of a larger pie and I’m supposed to just stay put. Not how this works. Not how this works by any stretch of the imagination.”