ACC lands $165 million deal with FSU & Clemson to avoid Pac-12-like implosion in conference realignment era

Following a tumultuous period in the conference, the Atlantic Coast Conference ended its legal battle with Florida State and Clemson on Tuesday. The parties reached an agreement that modifies the league's revenue distribution model and lowers exit penalties for schools seeking to depart before 2036.

The agreement helps the ACC in avoiding a Pac-12-like implosion, ensuring stability in its future in the collegiate athletics landscape. Under the settlement, the penalty for leaving the conference has been significantly reduced, while the grant of rights remains in effect through 2036.

The exit fee will be set at $165 million starting next year and decrease by $18 million annually, reaching $75 million by the 2030-31 season. Universities that pay the exit fee at any time will retain their media rights upon departure.

"Today's resolution begins the next chapter of this storied league and further solidifies the ACC as a premier conference," Phillips said in a statement. "As we look ahead to our collective long-term future, I want to express my deepest appreciation to the ACC Board of Directors for its ongoing leadership, patience and dedication throughout this process.”

“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 previous agreement, which Clemson and Florida State contested in court, had more stringent clauses. It made it almost impossible for teams to leave the conference at will.

In the agreement, any school leaving the ACC before 2036 must pay a penalty equal to three times the conference’s operating budget, approximately $120 million. The school will also forfeit control of its media rights until the grant of rights expires.

The new ACC revenue distribution model

The agreement reached on Tuesday introduces a new Atlantic Coast Conference revenue distribution model starting in 2026. The model aligns with Clemson and Florida State's long-standing demand to consider programs’ contributions.

The newly implemented revenue distribution model, known as the "brand initiative," will operate on a five-year rolling average. 60 percent of the ACC’s total television revenue will be allocated to this initiative, with an emphasis on recent viewership figures.

A team's viewership will be divided by the conference's overall viewership to determine its revenue share under this model. Meanwhile, the remaining 40 percent of television revenue will be evenly distributed among all conference members.