Report: ACC approves settlement in legal fights with FSU, Clemson

The Atlantic Coast Conference's Board of Directors has approved a proposed settlement that would end the legal fights with Clemson and Florida State as well as change the league's revenue-distribution model, a person familiar with the situation said Tuesday.

The person spoke to The Associated Press on condition of anonymity because the league nor the schools have publicly addressed the settlement, which requires all three to formally approve. ESPN first reported that the board, made up of university presidents and chancellors, had signed off on the plan during its call Tuesday morning.

Trustees for Clemson and FSU began separate meetings after the ACC board's approval. The FSU meeting specifically listed lawsuits involving the ACC on the agenda, while the Clemson meeting agenda listed authorizing school administration “to settle athletic litigations.”

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 on Monday.

The agreement would also provide clarity on the costs for a team to potentially exit before the expiration of a grant-of-rights deal — signed by all schools to give the ACC control of a school’s media rights — through the duration of the league’s TV deal with ESPN in 2036. Those costs had been a key subject of FSU’s December 2023 lawsuit, filed as it sought to explore potential membership in other leagues, and Clemson’s March 2024 lawsuit. The ACC had conversely sued both schools.

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 proposed settlement comes in the first year of an expansion that added California, Stanford and SMU to generate $600 million in additional incremental revenue.

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

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.

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