Report: ACC, FSU, Clemson reach proposed settlement to change revenue distribution

The Atlantic Coast Conference, Clemson and Florida State have reached a proposed settlement that would end their legal fight and change the league’s revenue-distribution model, a person familiar with the situation said Monday.

The person spoke to The Associated Press on condition of anonymity because neither the league nor the schools have publicly addressed the settlement, which requires all three to formally approve. ESPN first reported details of the settlement.

Trustees at Clemson and Florida State have each scheduled meetings for Tuesday. The FSU meeting specifically lists lawsuits involving the ACC on the agenda, while the Clemson meeting agenda refers to settling “athletic litigations.”

The ACC’s Board of Directors – made up of university presidents and chancellors – will also hold a call to sign off on the settlement Tuesday during a previously scheduled meeting, the person who spoke to AP said.

If approved, the settlement would incorporate viewership ratings into revenue distribution among member schools, which would increase payouts to schools generating the most TV interest. The upside could be $15 million or more for top-earning schools, while it could also result in a decline of about $7 million for others, the person told the AP.

Still, it would offer another sign of stability in the immediate term for the ACC and Commissioner Jim Phillips, who has spent much of his four-year tenure working to find ways to enhance revenue as the league faces an increasing gap behind the Big Ten and Southeastern conferences.

The settlement comes roughly a month after ESPN exercised its option to extend its media base-rights agreement with the league through 2036, aligning that deal with a separate one that covers their partnership for the ACC Network through that same period.

It also comes in the first year of a Phillips-championed “success initiative" that allows schools to keep more of the money generated by their own postseason success, which could amount to about $25 million in a year — tied mostly to performance in the College Football Playoff.

League schools signed a grant-of-rights agreement that gives the ACC control of media rights for any school that attempts to exit for the duration of the ESPN deal. Schools had signed that agreement in the lead-up to the ACC Network's 2019 launch, which meant the league could charge hundreds of millions of dollars for leaving the conference early.

Still, FSU filed a lawsuit in December 2023 seeking to explore potential membership in other leagues and challenging the league's ability to impose those penalties. Clemson followed in March 2024. The ACC had countersued both.

ACC leaders had been discussing ways to rethink revenue distribution to help potentially resolve the legal fights with FSU and Clemson back to last fall.

The ACC has 18 member schools — 17 in football — after realignment led to the addition of Cal, Stanford and SMU.

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AP college football: https://apnews.com/hub/college-football and https://apnews.com/hub/ap-top-25-college-football-poll