Florida State and Clemson reportedly agree to settle lawsuits with new revenue distribution strategy

A Tuesday vote is scheduled between Clemson and Florida State that would result in a settlement agreement for a lawsuit between the two schools and the ACC, according to a report from ESPN's Pete Thamel.

A new revenue distribution strategy for the ACC will catalyze the settlement of the lawsuit, which stems from conference realignment. The new revenue distribution system will be based on viewership, and there will be a change to the financial penalties for leaving the league's grant of rights before it ends in June 2036.

The new revenue distribution system will be primarily based on a five-year rolling average of television ratings. The revenue split will see 40% being distributed evenly among longstanding schools (which does not include SMU, Stanford and Cal), while 60% goes to the "brand initiative" based on the ratings.

The new model will see top schools earn upwards of $15 million. Some schools, however, will see a reduction in annual payouts of up to nearly $7 million, which is reportedly an "acceptable loss" by several school administrators in exchange for near-term stability.

If voted on successfully, the new revenue distribution strategy would kick into effect at the beginning of the upcoming fiscal year. ACC board of directors has scheduled a call on Tuesday to go over the terms of the new deal. Both Clemson and Florida State have also called for board hearings to present terms at noon ET on Tuesday.

New settlement could help ACC teams earn big money in 2025

NCAA Football: Clemson at Florida State - Source: Imagn

The settlement has the potential to help schools earn big revenue, rivaling that of the SEC and Big 10.

Paired with the "success initiatives" fund that was approved and enacted in 2023, which rewarded schools for postseason appearances, schools could earn upwards of $30 million or more annually in additional revenue should they make deep runs in the College Football Playoff or NCAA basketball tournaments and lead the way in ratings.

Clemson and Florida State reportedly will be big winners from the new distribution deal. However, programs such as North Carolina and Miami are expected to see the biggest payouts from the deal.

Basketball ratings will also be included in the new distribution deal. However, they do not have as big of an impact as football, given the latter makes up 75% of the league's TV revenue.

While financial compensation for the programs in the new deal is a huge plus, perhaps even more significant is the reduction in penalties schools will have to pay for exiting the league's grant of rights early. Currently, should a program decide to leave the league, it would need to pay as much as $700 million to leave the conference, according to Florida State's attorneys.

The new deal will see financial penalties for leaving the conference decrease for teams leaving before 2036, with the steepest decrease coming after 2030. Reports suggest the cost to leave the conference after the 2029 to 2030 season will be below $100 million.