FSU & Clemson Settle Lawsuits with ACC. New Revenue Sharing & Exit Fees Now in Place

Today, Clemson and FSU settled their lawsuits with the ACC, and as a result, a new revenue sharing structure is now in place, as well as changes in the exit fees that teams would have to pay if they were to leave the conference.

Regarding revenue sharing, 40% of the money received from ESPN through their TV deal will be evenly distributed. The other 60% will be divvied out based on a ratings-based formula that uses a 5-year weighted average. As a result, the schools that have the highest TV ratings will see a boost in the money they receive, while others might see a decrease due to this change. More money will be available for the schools at the top, because schools at the bottom will make less.

The funds for the 60% divided according to the schools’ TV ratings will come from a “Brand Fund.” This is separate from the Success Initiative that was introduced in 2023, which fiscally incentivizes schools whose football and basketball teams thrive in the postseason and achieve national success: making the College Football Playoff, making a run in the NCAA tournament, achieving Top-25 finishes, and winning conference championships.

These funds are primarily funded through the addition of SMU, Cal, and Stanford, who all agreed to take reduced payouts from the TV deal. SMU will take no money for the first nine years, while Cal and Stanford will receive 30% of roughly $25-30 million for the first seven years.

Regarding exit fees, if a school wants to leave the ACC starting in the 2025-26 fiscal year, they will have to pay $165 million. Each subsequent year, this fee decreases annually by $18 million until it reaches $75 million in 2030-31, where it will remain until the Grant of Rights deal with ESPN concludes in 2036. It’s also significant to note that if a school pays the fee and leaves, they will retain their own media rights.

For more details of the new arrangement, check out Pete Thamel and David Hale.