Florida State has officially ended its ongoing legal battle with the ACC as an agreed-upon settlement was reached on Tuesday afternoon. The day started with the ACC Board of Directors approving the terms of the deal on Tuesday morning, followed by admins from Florida State and Clemson agreeing to move forward with the settlement soon after. Let’s discuss some of the important details and why this is a win for the university.
As we detailed in yesterday’s article, the two main points of this settlement are the conference adopting a new revenue model and providing clarity on an agreed-upon exit path from the conference. Both of those factors were included in the settlement and provide FSU, Clemson, and other universities in the ACC an opportunity to earn additional revenue as well as exit the conference if desired prior to 2036.
Under the current agreement, revenue is distributed evenly among conference members despite performance, brand value, or viewership. In the new, agreed upon model, the majority share (60%) of base media rights will be placed into a viewership pool to be distributed via a ratings-based payout model. This is a significant change for the top-performing brands in the conference. These payouts will be based on a rolling five-year average viewership weighted toward the most recent years. Football will be the main driver, with men’s basketball being the second-largest component.
Why is this a big win for FSU and Clemson? From 2019 to 2024, in Nielsen-rated games (excluding the 2020 season), FSU brought in 15.23% of the ACC’s viewership, with Clemson coming in second at 14.73%. No other program in the ACC accounted for over 10%. That’s also considering that over those five years, FSU only had two winning seasons, so despite a tough time for the program, it still accounted for a significantly larger portion of viewership than any other program not named Clemson.
FSU AD Michael Alford stated before that FSU brings in 15% of the TV revenue for the conference but only receives a payout of around 7%, and these numbers back that up. The program will now be fairly rewarded for the disproportionate viewership they bring in.
Of course, this is open to every program in the conference and should incentivize them to invest in their program. That’s another topic worth discussing for any program that is not happy with the outcome. Everyone in the ACC has had the opportunity to invest heavily in its football programs, like Florida State and Clemson, but most chose not to.
Now, they will face the repercussions of their own decisions, and although it may sound harsh, it is hard to find sympathy for those who have become victim of their own decision. They have long benefited from being paid much more than what they brought in, and the gravy train has finally come to a halt. These revenue changes will take effect in the coming fiscal year.
The other major aspect was the path to exiting the conference if they chose to. Prior to this settlement, a program wishing to exit the conference would have to pay three times the operating budget of the ACC, which is currently estimated to be around $165M. That number will be reduced by $18M per year until after the 2030-2031 year, at which time the number will level out at a flat fee of $75M. That is still a hefty number, but with the added revenue from joining the Big Ten or SEC, it would very quickly pay for itself.
The even bigger component was whether they could take their media rights with them, which is the basis of the legal battle to begin with. FSU argued they would, and the ACC argued otherwise.
In the settlement, it is now the understanding that upon notice of desire to withdraw and payment, exiting schools will take their media rights with them. This is a MASSIVE win for FSU. It would cost an estimated 50 or so million dollars per contract year to buy those out prior to this, so you can see how important this was, and FSU probably would not have settled without this being part of the deal.
For the ACC, this gives short-term stability and potentially kicks the can down the road before the big brands hit the door. Now, it is possible that any program can leave after the 2025 season if they want to pony up the $165M. However, I expect the exits to align more with the 2030 timeline. This does not mean the death of the ACC, but the conference will likely reach a crossroads for its future around that time. Keep in mind that the Big Ten renegotiates its TV contract in 2030, and the SEC comes back to the table in 2034. This gives them time to start searching for replacements to keep the conference from falling apart if a mass exodus occurs.
For Florida State, it means they have clear options of what the future may hold. They now have a realistic and reasonable path to exit the conference prior to 2036. They also can tap additional revenue streams to help bridge the growing revenue gap between the ACC and the Power 2 conferences. Of course, it all starts with FSU handling its own business and getting back to its winning ways to maximize the additional revenue opportunities and look desirable in the eyes of the other conferences when the exit day arrives.
As most college football fans know, the Big Ten and SEC have emerged as the controlling powers in the sport. It would greatly benefit Florida State to become part of one of those two to secure its future as a national power brand from both a revenue and “seat at the big boy’s table” aspect.
This settlement provides a path to do just that and allows them to rake in extra money while they wait. As for the desire to add Florida State, with conference realignment spreading like wildfire across college football, there are only so many big brands remaining on the prize wall, and Florida State is one of the bigger and more desirable ones out there.
If there is any further appetite for expansion, FSU will get the call. We already suspect that Fox and the Big Ten would love nothing more than to plant a flag in their main competitor’s backyard and capture a piece of the massive Southeastern/Florida TV market that they do not currently have. On the other hand, the SEC would probably like to keep them from doing that by cornering the market.
Lastly, I want to thank and congratulate the Florida State administration for having the gall to stand toe-to-toe with the giants and come out victorious. They received a lot of heat for making that decision, but they knew what they brought to the table and were willing to fight for the best interest of the university. The announcement of this settlement lands as a feather in the cap of those that entered the fight. It provides an exciting future for the program and gives them some bonuses for their value in the near future as well. Today is a great day to be a Seminole. Thanks for reading and Go Noles!
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