ACC endorses new “success-based” revenue distribution starting in 2024

After news leaked during the Atlantic Coast Conference’s spring meetings that Florida State, alongside Clemson, Miami, UNC, NC State, Virginia, and Virginia Tech had been exploring possible ways to break the conference’s iron-clad Grant of Rights contract, the need for the ACC to make moves to placate its more frustrated members amped up even more.

One such move that’s been discussed ad nauseam has been a switch up to the way that the ACC distributes revenue — and today, the conference announced that it has taken the first major steps towards implementing a “success incentive initiative.”

Per the ACC:

The specifics of the plan are in progress and will be solidified in the coming months. Under this initiative, the implementation of the success incentives will come solely from the performance of teams in revenue-generating postseason competition. All other revenues will continue to be equally shared as currently outlined.

Florida State, by way of its athletic director Michael Alford, has been the main advocate for rewarding the more prominent members of the ACC with Alford sharing numbers at an FSU Board of Trustees meeting last year to highlight the university’s earning potential.

According to numbers he shared, if conference distributions were removed (TV contracts, postseason payouts, etc.), FSU would rank third in the SEC in revenue generated — ahead of schools like the Alabama Crimson Tide, LSU Tigers and Florida Gators.

When comparing against Big 10 schools, Florida State ranks third, behind the Ohio State Buckeyes and Michigan Wolverines but ahead of the Penn State Nittany Lions, Iowa Hawkeyes, Wisconsin Badgers, and others.

He took a much firmer stance advocating for FSU’s financial status in February this year, saying that “something has to change.”

“Right now, when you throw everything in, we receive about $42 million — $30 million behind our competitors and peers across the country, and that’s $30 million every year,” Alford said, noting that the gap could continue to grow as conferences exercise their flexibility around media rights. The ACC’s Grant of Rights agreement “irrevocably and exclusively grants to the conference during the term all rights necessary for the conference to perform the contractual obligations of the conference expressly set forth in the ESPN agreement,” which basically means any money a school makes from a TV broadcast belongs to the ACC until 2036.

According to numbers obtained by USA Today Sports, the ACC distributed $36.1 million per school in 2020-21, while the SEC divvied out $54.6 million and the Big Ten sent out $47.9 million.

“Each conference gets to go to the open market before our deal is even up...some of them a couple of times — so that [deficit] number is even going to get larger.”

“If the Big 12 was to get some teams from the Pac, that is going to open up some windows. If the Big Ten goes and gets some other teams from the Pac that are left out, you are going to open up other media windows.”

“We’re working every day. The president and I are talking daily about our future.”

Alford said that he and university officials are “in the weeds on everything that will impact the future of FSU revenues,” remarking that every hypothetical from sponsorships to ticket sales to another round of conference expansion has been considered and analyzed, all the way out to 2042.

Alford shared numbers then that re-emphasized how crucial Florida State is to the ACC brand, saying the school makes up an estimated 15 percent of the ACC’s TV rights value but only receives around 7 percent of the distribution.

According to FSU, the Seminoles are the most-watched team in the ACC since 2014 and earn 70% more viewers than the ACC average.

From our “How could unequal revenue sharing impact Florida State and the ACC?” piece, published :

Florida State and Clemson were the only ACC teams to play in multiple games that drew over 4 million TV viewers. In fact, only one of the 18 games involving ACC teams that drew 3+ million viewers last year was a conference game that didn’t feature Clemson or FSU. One 2022 study looked at how potential conference realignment moves would impact conference TV ratings and it wasn’t pretty for the ACC. If Miami, FSU, and Clemson left the ACC, the conference would rank dead last amongst the power conferences and it would fall below even The American.

Alford spoke further with Tomahawk Nation about that February presentation, re-emphasizing the need for the Seminoles to stay competitive financially.

“We understand, especially at Florida State and a couple of other institutions, really understand the commitment of that gap that’s coming. It’s a freight train. That’s barreling down the tracks... I’m very involved and looking at solutions. Because I can’t sit here. And for five years, it’d be 30 million behind every year. It’s not a one-year thing. And that makes a big difference, especially when you start compounding that year after year after year.”

“I need to protect Florida State University, and make sure that we’re doing everything we can to make sure that we’re able to compete nationally. And I’m not talking just football, everyone is going to immediately go there. And I agree. But you know, one thing that’s great about our institution and the culture of our institution is we expect national championships across the board. We want to compete in everything we do... With that revenue gap, you’re going to see maybe some decisions that that we have to make that won’t allow that... want to protect that student-athlete experience, what we’re able to offer them and how they’re able to grow during their time here as much as I can. And that’s the driving factor behind it.”

You can find the full release from the conference below:

GREENSBORO, N.C. (theACC.com) – The Atlantic Coast Conference Board of Directors today announced that it has endorsed a success incentive initiative that will begin during the 2024-25 academic year. The decision follows analysis and discussions that have occurred throughout the past year.

The specifics of the plan are in progress and will be solidified in the coming months. Under this initiative, the implementation of the success incentives will come solely from the performance of teams in revenue-generating postseason competition. All other revenues will continue to be equally shared as currently outlined.

“The ACC Board of Directors continues to be committed to exploring all potential opportunities that will result in additional revenues and resources for the conference,” said ACC Board of Directors Chair and Duke University President Vincent E. Price. “Today’s decision provides a path to reward athletic success while also distributing additional revenue to the full membership.”

“Today’s endorsement follows significant and meaningful conversations by the ACC Board of Directors,” said ACC Commissioner Jim Phillips, Ph.D. “To be certain, I applaud their thoughtfulness and continued commitment to working collectively. As we’ve communicated consistently, we remain dedicated to exploring all options to enhance support for our member institutions and their student-athletes.”