Clemson AD Explains why ACC’s new Revenue Model Works

CLEMSON — When Clemson University filed a formal complaint against the ACC last March, the school made it clear from the beginning what it set out to do.

Clemson started its litigation with these three goals: contain clarity regrading the disposition of its media rights, determine the validity of the conference’s exit fees and obtain an enhance revenue model that will allow Clemson to remain competitive at a national level.”

On Tuesday, the ACC met all of those goals, as Clemson University’s Board of Trustees agreed to settle with the league, ending its year-long dispute in the courts.

Florida State University also settled its complaint against the ACC, as the league, Clemson, and Florida State announced Tuesday they have resolved all ongoing legal disputes.

With this resolution, Clemson and Florida State will remain full members of the ACC, and the parties will dismiss all pending lawsuits in the states of Florida, North Carolina and South Carolina.

“At the end of the day, this innovated distribution model, which further incentivizes performance, and investment will help strengthen the ACC,” Clemson athletic director Graham Neff said to the BOT at Clemson. “A strong ACC is good for Clemson and a strong Clemson is good for the ACC.”

As part of the settlement, the members of the ACC have agreed to build upon the previously announced success initiatives by creating an additional revenue distribution model that is based on viewership. The new and innovative model will continue to support the entire membership while adding a component directly focused on annual football and men’s basketball viewership.

As with success initiatives, ACC member schools will have the opportunity to earn increased viewership distributions from the ACC’s media revenues and will be incentivized to take actions that enhance viewership across the ACC’s 18 member schools.

“I believe this is an excellent outcome for Clemson,” Clemson University President Jim Clements said to the BOT. “We achieved our goals. We have enhanced revenue opportunities that will allow us to stay competitive on a national basis and we remain a proud member of the ACC, which is a great home for Clemson.”

Obviously, the new model benefits Clemson a lot.

In the last 10 years, five times a Clemson game has been the most watched college football game in that season. Over the last six years, Clemson Football is the most viewed college football program within the ACC.

The settlement will call for 40 percent of the ACC’s revenues to be spilt equally between league members, while the other 60 percent will be divided based on a five-year rolling average of television ratings.

Clemson could see its payout increase by $15 million or more per year, which will put the school financially within striking distance of some of the SEC and Big Ten schools it competes with on a yearly basis.

“We certainly have proven success of viewership and brand value over recent years and certainly this is going to further incentivize our investment to capture, not only competitive success on the field, but also viewership and the viewership methodology from a financial standpoint going forward,” Neff said.

The ACC already established a success initiative that allows its members to keep money earned from participating in the College Football Playoff. In other words, Clemson and SMU were allowed to keep all of the $4 million they earned from making the CFP in 2024.

How did Clemson, FSU and the ACC all come to a settlement?

Neff provided clarity in his presentation to the board, which is outlined below.

Settlement Framework

Enhanced revenue distribution model

Rewards performance and media value measured by viewership

New exit fee schedule

Coupled with the clarity that a withdrawing member leaves with their future media rights fees and clear upon the payment of only the exit fee

Viewership Pool

60 percent of the ESPN Base Rights’ value goes into Viewership Pool

Fully “Proportional”: Clemson Total Viewers divided by ACC Total Viewers

5-year weighted, rolling viewership figures (most recent years have greater weight)

Football & Men’s Basketball

ACC Financial Methodology

Projected opportunity of $120 million in new revenue over the next six years

New “Viewership Poll” and enhanced ACC “Success Initiatives”

Additionally, “Direct pass Thru” of CFP participants shares

1^stRound: $4M | 2^nd Rd: $8M | Semis: $14M | Natty: $20M

Exit Fee Schedule

CURRENT Exit Fee: 3X ACC Budget

Escalating over time

FY26: $165M +/-

NEW Exit Fee Schedule

FY26: $165M

Descending $18M per year until $75M in 2030-’31, and leveling off

Upon payment of Exit Fee an exiting member leaves with their future media rights

Advantages of Settlement

Absolute Clarity on Media Rights

Enhanced Revenue Distribution Model

Declining Exit Fee

ACC is an excellent fit for Clemson

Historic football success and access to the College Football Playoff

Preeminent Conference for Olympic Sports

The ACC’s new revenue distribution model also provides flexibility to adapt to future changes in collegiate athletics.

“All of these are consistent with the objectives we set out with initially within the litigation,” Neff said. “That being said, the ACC is an excellent fit for Clemson. The academic prestige and growing reputation that we, this board and President Clements so emphasis at Clemson is touching nationally and with other members within the ACC.

“Certainly, the historic football success that the league has had and Clemson has had within the ACC and the access to the College Football Playoff currently, let alone any changes ahead, this is a great home for Clemson.”