Report: Clemson, Florida State to vote on settlement of lawsuit vs. ACC, discuss new distribution model

On Tuesday, Florida State and Clemson will vote on an agreement that would ultimately result in the settlement of four ongoing lawsuits, per ESPN’s Pete Thamel. Further, the vote could lead to a new revenue-distribution strategy that would solidify the conference’s membership for the near future.

In December 2023, Florida State filed a lawsuit against the ACC, expressing its concerns for the financial implications and potential exit penalties associated with leaving the ACC. Only three months later, Clemson followed suit, filing a lawsuit against the ACC over the terms of the grant-of-rights agreement, which grants the conference control over media rights revenues for its member institutions.

Both schools argued the ACC’s financial model put them at a disadvantage compared to the programs in the Big Ten and the SEC. Specifically, the schools weren’t satisfied with the ACC’s media rights deals, which led to lower revenue shares than some of their competitors across the country.

The ACC reportedly is set to propose a new deal that would solve some of these problems.

“This new revenue-distribution model — or ‘brand initiative’ — is based on a five-year rolling average of TV ratings, though some logistics of this formula remain tricky, including how to properly average games on the unrated ACC Network or other subscription channels,” according to ESPN. “The brand initiative will be funded through a split in the league’s TV revenue, with 40% distributed evenly among the 14 longstanding members and 60% going toward the brand initiative and distributed based on TV ratings.”

“Top earners are expected to net an additional $15 million or more, according to sources, while some schools will see a net deduction in annual payout of up to about $7 million annually, an acceptable loss, according to several administrators at schools likely to be impacted, in exchange for some near-term stability.”

In short, the new model would reward schools generating the most revenue and, thus, increasing the conference’s media appeal. Schools will also be able to reel in additional revenue by making deep runs in the College Football Playoff or NCAA Tournament due to the “success initiatives” approved in 2023.

The ACC Board of Directors will hold a call on Tuesday to discuss the settlement terms. Florida State and Clemson will also meet with their respective boards. All three boards must agree to the settlement before it can move forward. However, ESPN reports that insiders expect a deal to be reached.