FSU, Clemson, ACC Near Landmark Settlement

Florida State, Clemson, and the ACC are considering a framework to settle all four lawsuits over the validity of the ACC’s contracts holding the conference together, sources confirmed to Front Office Sports. The settlement would implement a new revenue-incentive structure related to TV viewership, and it would provide “clarity” around what it would take for a school to leave the league.

If the parties can successfully settle, the ACC will have secured its future with its current 18 members until at least 2036, when its grant of rights contract—which binds schools’ media rights together and imposes exit fees if they leave early—expires.

It’s a remarkable turnaround from just a year ago, when the group of lawsuits threatened to invalidate the contracts holding the league together.

As part of a regularly scheduled meeting Tuesday, ACC presidents will discuss and potentially vote to agree to the settlement framework, a source said. Then, FSU and Clemson board members will hold their own separate meetings.

FSU sued the ACC in December 2023 alleging negligence and asking for its grant of rights contract to be invalidated so that the school could leave the conference. After losing out on a spot in the then-four-team College Football Playoff despite being undefeated, FSU was frustrated about not having a path to college football’s postseason, which it blamed on the conference. The school was also concerned the league’s revenues would fall behind those of the Big Ten and SEC. (The ACC’s media-rights deal with ESPN, which pays out in the mid-$30 million range annually, runs until 2036.)

Clemson filed a less harsh lawsuit soon afterward. The ACC countersued both schools.

The settlement would implement a revenue incentive for schools to earn extra dollars based on television ratings, sources said. The structure would be available to all schools, with no specific carve-outs for FSU or Clemson. (FSU presented this idea to the league in 2022 to no avail, another source said.) 

The revenue distribution would be in addition to the ACC’s new “success incentive” program, which offers $20 million to $25 million in extra revenue based on a school’s football postseason success. The league has also earned $600 million in additional media-rights revenue by adding Stanford, Cal, and SMU, which is bumping revenue distribution even more, the first source noted.

The settlement confirms that schools that want to leave before the media-rights deal and grant of rights expire in 2036 would have to pay a specific dollar amount in exit fees, based on a formula of conference annual revenue. This aspect of the settlement satisfies Clemson’s specific requests in litigation to understand what, exactly, the program would have to pay if it wanted to leave the ACC.

FSU, Clemson, and the ACC declined to comment due to the fact that the litigation was still pending.