Included in Thursday’s news that the Pac (1)2 is expanding — adding Mountain West members Boise State, Colorado State, Fresno State and San Diego State ahead of the 2026-27 athletic calendar — is a fascinating footnote:
Oregon State and Washington State are reportedly keeping their eyes on Stanford and Cal as potential re-additions to the Pac-12, despite those programs formally joining the ACC this summer.
That’s the sort of conjecture the ACC has to expect and endure when two of its league members, Florida State and Clemson, are actively suing to get out of the conference. The ACC is mired in four lawsuits in three separate states regarding those two football powers, both of which are seeking an early (and cheaper) exit from the league’s grant of rights, which extends to 2036.
Short of uncovering some legal Hail Mary — one neither school has seemingly discovered, according to their legal actions to date — any unraveling of the league likely won’t be that easy or fast. Instead, it’s likely, even as conference realignment rolls on, that the ACC has protections that will keep it intact. Here’s where the league actually stands. League sources were granted anonymity in exchange for their candor.
ESPN’s ‘look-in’ period
The main vulnerability the ACC has to deal with is its February 2025 “look-in” period with ESPN, regarding the league’s television contract. In Florida State’s initial 2023 filing against the ACC in Florida, the school revealed that ESPN’s media rights contract with the ACC actually extends to only 2027 — rather than 2036 — and that ESPN had to decide by 2021 whether to extend it to 2036. In that same filing, FSU alleged that commissioner Jim Phillips extended that 2021 deadline to February 2025 without approval from two-thirds of the league’s membership. So could ESPN pull out of the deal early next year?
ACC sources maintain that the “look-in” is solely for tweaking the league’s media deal in the margins, advocating for (among other things):
• Better TV time slots for marquee ACC games
• More visibility for ACC teams on ESPN’s main networks, instead of the ACC Network
• Other ways to maximize revenue within the current ACC-ESPN contract
Additionally, both within the league office and member athletic departments, there’s no understood rationale for why ESPN would want out of its current deal with the ACC. Put another way, why would ESPN willingly relinquish the ACC’s television inventory — especially when it already has it locked in at a below-market-value rate for another decade?
About that rate — the specifics of the ACC-ESPN deal are pertinent to any realignment talks. According to tax filings for 2022-23, the most recent year for which information is available, the ACC distributed about $44.8 million to each of its 14 full-time members. (Notre Dame, an affiliate member for football, also receives a partial share.) That ranks third amongst the power four conferences, behind the Big Ten — which distributed $60.3 million, on average, per school — and the SEC ($51.3 million per school), but narrowly ahead of the Big 12 ($44.2 million per school).
But those figures don’t account for recent realignment moves, many of which went into effect this summer. With Texas and Oklahoma now in the SEC, plus USC, UCLA, Washington, and Oregon now in the Big Ten, those revenue gaps stand to only grow. That’s especially true when factoring in that the SEC and Big Ten are expected to receive the majority of the expanded College Football Playoff berths — and therefore, the revenue that comes from making the 12-team field.
Therefore, the only hypothetical reason why ESPN would opt for a shortened ACC deal would be a wink-wink agreement with certain ACC schools that, once a shortened deal ended in 2027, they would join the SEC — therefore allowing the SEC and ESPN to negotiate an even more lucrative TV deal.
However, there are critical sticking points with that idea. Should the ACC grant of rights end in 2027, industry chatter suggests that multiple current ACC members — chief among them, North Carolina and Miami — would prefer joining the Big Ten over the SEC. Considering the Big Ten has its media rights deal with Fox, not ESPN, there’s really no incentive for ESPN to shorten the current ACC-ESPN deal and allow valuable ACC brands to depart for another network’s benefit.
So if in February, ESPN does formally lock in its television contract with the ACC through 2036? Then the league and its members are right back at square one: mired in court proceedings that, realistically, may take another decade to resolve.
Where do the lawsuits stand?
The ACC has maintained, both publicly and privately, that it does not intend to settle with either Florida State or Clemson. At the league’s preseason media event in July, Phillips said during his opening remarks that “we will fight to protect the ACC and our members for as long as it takes,” adding that “every member of this conference willingly signed the grant of rights, and quite frankly, eagerly agreed to this television contract.”
Behind closed doors, the conference has doubled down on that sentiment. There’s the belief that if the ACC did settle with Clemson and Florida State, even in a scenario that netted the league hundreds of millions of dollars, the resulting precedent — that withdrawal is possible — would be so damaging that it would threaten the league’s existence.
To maintain its status as a power conference, the ACC must meet a 15-team threshold — which was part of the league’s initial motivation for adding Cal, Stanford and SMU. Even with Thursday’s expansion news, the revamped Pac-(1)2 is uncertain to receive power conference status, further disincentivizing Stanford and Cal from returning even if doing so were feasible.
With settling off the table, both the league and the schools suing to exit it are stuck in a back-and-forth legal battle. Earlier in September, in a legal response to FSU and Clemson’s respective lawsuits, the ACC argued that the schools missed their chances to push back against the league’s media rights contracts, since they approved them and have accepted millions of dollars from them over multiple years. The ACC claimed that the schools missed their statute of limitations by three or four years, depending on the state.
As a second leg of its defense, the ACC also referenced Maryland’s departure from the league in 2013. In 2012, there was a 10-2 league vote to increase the withdrawal penalty for exiting schools to three times the ACC’s operating budget; FSU and Maryland were the dissenting votes, but Clemson supported the move. That said, every ACC school except Maryland voted to approve litigation against the Terps for the withdrawal fee, and then accepted payment from it. The ACC is arguing, therefore, that Clemson and FSU can’t take issue with the same departure process — and penalty — this time around.
The league’s current withdrawal penalty is about $140 million. Florida State lawyers estimate that, short of a court victory nullifying the ACC’s grant of rights, it would cost about $542 million to exit the conference.
And while the ongoing lawsuits validate both schools’ desire to leave the conference, their other actions affirm that they’re unlikely to actually do so, at least not imminently. Neither school told the ACC by this summer’s Aug. 15 deadline that it intended to leave the league before the 2025-26 athletic year, locking both schools in with the conference for at least two more full seasons. That’s the case regardless of any future legal decisions.
How are ACC schools reacting to the legal standoff?
ACC schools have pivoted their focus to prioritize further revenue generation.
North Carolina, according to public records, has at least had conversations with private equity firms, as did Florida State as it publicly raised concerns about the growing gap between the ACC and SEC/Big Ten before it filed suit. Neither school has advanced beyond initial discussions.
Asked directly if the ACC has discussed partnering with private equity firms, Phillips said he wouldn’t be doing his job if he didn’t explore all available options.
Elsewhere, the ACC has already acted with revenue generation in mind. While the league formally added Cal, Stanford, and SMU this summer, the conditions of their acceptance were that Cal and Stanford would receive reduced (but escalating) TV distributions over the course of 12 years — starting at about 30 percent of the standard per-school distribution — until they reached full membership. SMU is not receiving any distributions for its first seven years of membership. Those conditions created a pool of roughly $50 million that the league can disperse to its prior membership, as a way to mitigate its growing revenue gap compared with the SEC and Big Ten.
Additionally, this athletic year — for the first time in power conference history — the ACC has established a “success initiative” that will funnel more money to schools with the most actual sports success, especially in football and men’s basketball. Schools can earn between $20 million-$25 million for big years, chiefly through the CFP. According to the Associated Press, ACC schools that make the 12-team field will automatically earn $4 million, plus another $4 million for advancing to the next round, $6 million for making the semifinals, and another $6 million for appearing in the national championship game — good for a maximum total of $20 million. Schools can also earn additional “success initiative” revenue for finishing in the Top 25 in football, and for qualifying for a postseason bowl game.
That’s on top of the existing system that rewards men’s basketball success, specifically making and advancing in the NCAA Tournament; the league currently earns “units” — which are paid to conferences via the NCAA — for each member school victory in March Madness, up to the Final Four.
The NCAA is progressing on distributing “units” for the women’s NCAA Tournament, as well, and once that’s official, those earnings will also be included in the ACC’s “success initiative” pool.
“It will reward the teams that have the most success,” Phillips said in July. “It’s not an absolute correlation, but those that invest more have a higher chance to have success.”
(Photo: Eakin Howard / Getty Images)
