Ending more than a year of legal wrangling in two states, Florida State University and the Atlantic Coast Conference on Tuesday finalized a settlement that will create additional revenue for schools based on television viewership and shrink penalties for ACC members seeking to exit the conference.
Florida State’s Board of Trustees met behind closed doors for about an hour before unanimously signing off on the settlement, which the ACC Board of Directors approved earlier Tuesday. Trustees for Clemson University, which also has been involved in litigation over the school’s revenue-sharing agreement with the ACC, also gave the settlement the go-ahead.
Sixty percent of total ACC television revenue will go toward the new revenue-sharing agreement, called a “brand initiative.” The settlement also will slash hefty penalties member schools have faced if they wanted to exit the ACC.
“What you’re going to see represents a large paradigm shift in revenue sharing and conference exit with media rights from the world we existed in before,” FSU General Counsel Carolyn Egan said.
The legal battle over media rights, which has drawn national attention, included dueling lawsuits, with the conference filing a case in North Carolina in December 2023, one day before Florida State filed a lawsuit in Leon County. FSU essentially contended that the ACC has shortchanged its members through television contracts and that the school would face exorbitant financial penalties if it leaves the conference.
But the North Carolina-based ACC argued that the university entered a contract that granted media rights to the conference. The Florida Supreme Court on Thursday declined to take up a request by the ACC to pause the lawsuit filed in Leon County.
FSU trustees did not discuss details of the agreement during Tuesday’s public portion of the board meeting, but Egan provided an overview.
Currently, revenue from media rights is distributed equally among schools “regardless of performance, brand value or viewership,” Egan’s presentation said.
Under the settlement, the ACC will move toward a “proportional viewership model” based on television viewership. A majority share of the base media rights, or 60 percent, will be placed into a “viewership pool” that would be distributed based on a five-year, rolling rating of average viewership.
The “ratings-based model” is “important to us,” Egan said.
“That is very important that these are media rights and that they are earned by viewership,” she said.
The pool will be in effect for the upcoming season, “so we would immediately get to work on enhancing revenues through the viewership pool,” Egan added.
Egan said the agreement leaves intact a “success initiative” launched in the fall, which is aimed at allowing member schools to keep more of the money they generate from post-season success. The settlement allows FSU to continue investing in its athletic programs, she said.
“Not only have we looked outward at the landscape of collegiate athletics, but we've looked at, what is FSU? What is FSU’s brand? What does FSU bring to the media marketplace? So we have a very tight grip on what our brand is and what our viewership numbers are, and we know that regardless, year over year, our viewership is steady for decades. People watch us. Maybe they love-watch us, maybe they hate-watch us, but they watch,” Egan said.
Peter Collins, chairman of the FSU Board of Trustees, said the settlement was “good for Florida State.”
“We’re way better off than where we were 14 months ago where we were being told we had no options. And now we have options and we have a good fit for the conference, as well,” Collins said. “I think this is going to make the conference better. I think it’s going to incentivize people in the conference to really invest and for the conference to grow.”
The new revenue-sharing model “will continue to support the entire membership while adding a component directly focused on annual football and men’s basketball viewership,” according to a news release posted on Florida State’s website.
The revamped system also addresses a major flashpoint in the ligation between the universities and the conference — the “grant of rights” agreement that gave the ACC media rights over games in a deal with ESPN that runs through 2036. FSU in court documents said penalties could cost the school $700 million if it tried to exit the conference.
“There was a fee. But what did that fee entail? We don't know. … I think it's fair to just call it disputed. At this point, we did not agree about what the grant of rights meant, what the effect was,” Egan said. “This provides clarity and certainty for each school to determine what its best fit is, and if there is a school that decides to withdraw, there's just certainty and clarity that wasn't there before.”
The fee to exit the conference currently would be about $165 million under the settlement. The amount would drop about $18 million a year and level off around $75 million for the 2030-2031 season, according to a presentation given to Clemson trustees. Schools would be able to exit the conference with their media rights after paying the fee.
ACC Commissioner Jim Phillips thanked the conference’s board members for their “patience and dedication” in a prepared statement.
“Today’s resolution begins the next chapter of this storied league and further solidifies the ACC as a premier conference,” Phillips said. “The league has competed at the highest level for more than 70 years and this new structure demonstrates the ACC embracing innovation and further incentivizing our membership based on competition and viewership results. The settlements, coupled with the ACC’s continued partnership with ESPN, allow us to focus on our collective future – including Clemson and Florida State – united in an 18-member conference demonstrating the best in intercollegiate athletics.”
FSU trustee Drew Weatherford, a former quarterback at the school, praised the settlement.
“I’m proud of where we’ve landed,” Weatherford said. “I just wanted the Seminole nation to know that the future is bright. I am extremely encouraged, and I'm confident that we will remain one of the top athletic brands in the country for decades to come, and I wasn't that confident 14 months ago.”