Florida State Athletic Director Michael Alford’s update on Friday to his school’s board of trustees was part informative, part performative.
In a speech that made headlines across ACC country, Alford pointed to the striking difference in the likely distribution of conference revenue between the ACC and the Big Ten and SEC once those leagues’ new media rights deals begin.
“At the end of the day, something has to change for the state of Florida to compete statewide,” Alford told the board.
The focus was on a $120 million exit fee that doesn’t account for the possibility that a school trying to leave the ACC might not be able to sell the rights to its home games until 2036 either — a factor affecting hundreds of Could be worth millions more. ACC schools, even those fairly dissatisfied with the league’s earnings, are not exactly ready to challenge the grant of rights that ties each school’s media rights to the ACC through the end of the 2035-36 school year.
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However, some of these schools are pushing for a change in how the league distributes revenue. Talking about exit fees might be sexier, but that was the meatiest thing Alford said:
“We are currently working with the conference. We talk to them about how to create a revenue distribution model that takes into account who you are, how you produce, how you play, what your brand is. We’re working on that with other sporting directors. The President and I have attended a number of meetings on this subject. We’re working with the conference. I don’t know if we’ll get there.”
ACC commissioner Jim Phillips told The Athletic that concerns about the league’s revenue generation are not new and the ACC has been looking for ways to innovate and find new revenue streams to improve its business. He added that he’s been in discussions with Disney/ESPN about “their course forward” and has also been exploring new sponsorship opportunities.
“I fully understand that some member institutions are frustrated and as such we are working together to address these concerns,” said Phillips.
Asked specifically about discussions about unequal revenue sharing, Phillips said the ACC will continue to discuss it. The spring meetings of the league are held in May.
“We talked about this a lot during the fall and winter and will continue to make it a priority,” he said.
So what do the schools that see themselves as the biggest brands want? What do the other schools think about this? And what could actually happen?
Jim Phillips took over as ACC Commissioner in 2021. (Jim Dedmon / USA Today)
How did the unequal revenue share proposal come about? Which schools are in charge?
staples: This stems from a presentation made in early 2022 by Miami AD Dan Radakovich and Clemson’s sporting director Graham Neff – who worked together when Radakovich was Clemson’s AD – in which they laid out a plan that would lead to an uneven distribution of revenue in the Leading the league would be the one that splits revenue evenly among the 14 full members, giving a smaller share to non-football member Notre Dame.
The ADs discussed the possibility of splitting new money differently, like the increased college football playoff payout beginning in 2024. Perhaps, they suggested, the schools that produced more successful teams could receive bonuses. That way, schools that field teams in the CFP, Major Bowls, or the NCAA basketball tournament could be rewarded for investing in their programs. This would stimulate investment rather than giving more money to specific schools based on a somewhat nebulous concept like brand equity. A school like Wake Forest, for example, may not have the strongest brand but can reap financial benefits as their investments in football (facilities and retaining coach Dave Clawson) translated directly to success on the field.
This presentation received a rather tepid reaction from the ACC Presidents when it was brought up, but since then:
The world around the ACC continues to change, and that has sparked a desire by some schools to find ways to bridge the rather large gap between the ACC’s revenue allocation and the allocations used by the Big Ten and the SEC — which also collect revenue share equal parts – to close. will send them to their schools.
Clemson, Florida State, Miami and North Carolina are most excited about a change. That makes sense. If ACC schools could shop on the open market, these would probably be the most sought-after brands.
How do others feel about this topic?
Auerbach: To say that the Presidents had a “tepid” reaction might be a bit of an understatement. I’ve been reminded a couple of times this week by people in this league that the presidents are the ones making that kind of decision, not the ADs. And most recently at the league’s winter meetings a few weeks ago, the presidents don’t seem to have an appetite for it. Even schools that have ADs that support change don’t necessarily have presidents with the same attitude.
I don’t think anyone wants to make less money than they make now just because. The issue is really one of leverage. Do the State of Florida, Clemson and others actually have influence at this time? They’re tied to a deal with the ACC until 2036 that could cost more than $300 million (!) to get out between exit fees and granting rights. If these schools don’t have offers in hand to join the Big Ten or the SEC, can they really force the rest of the conference to agree?
For all it’s worth, I’m not sure that shuffling a few million dollars a year will actually fill the revenue gaps that Alford discussed with his board. If FSU is getting, say, $5 million more a year than it is now, is that actually closing the gap it’s staring down at Florida or Georgia? Or is it more of a philosophical conversation?
If this remains unresolved, could member schools leave the ACC?
staples: Based on conversations with people in the league, it feels like the gesture is seen as more important than the actual money. There’s an interesting piece of history here, dating back to the round of realignment that gripped collegiate sports a decade ago, combined with some far more recent consequences.
The Pac-10 had an uneven revenue-sharing arrangement based on television appearances that ended when Colorado and Utah joined and the league became the Pac-12. The launch of the Pac-12 network also ushered in an era of even revenue sharing. This did not sit well with USC, which had benefited from the previous arrangement. USC leaders and donors agitated behind the scenes for a more beneficial deal, warning that continuing down the same path could prompt the school to look elsewhere, but those warnings were ignored. In June 2022, USC and UCLA announced they would be leaving the Pac-12 for the Big Ten when the Pac-12 rights grant expired in June 2024.
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Texas and Oklahoma also once benefited from an uneven revenue-sharing arrangement in the Big 12. That league settled on an equal-sharing arrangement when leaders fended off a raid by the Pac-10 and then-Commissioner Larry Scott. Texas and Oklahoma only began seriously considering jumping conferences after Fox and ESPN refused to resume negotiations on the Big 12 media rights deal in early 2021 (four years early). By July 2021, these schools had decided that they would go to the SEC when the Big 12’s rights expired. (After making a deal, they will leave a year early.)
Auerbach: Well, that’s an interesting and timely example! This era of college sports has a very strong focus on self-preservation, whether that’s jumping from one conference to the next under cover of darkness or asking for more money where you are. I understand why this is happening – everyone needs money to maintain the ability to compete at the highest level and also, dare I say it, they need money to pay athletes directly when the business model changes. But it definitely leads to decisions about what’s best for an individual school, not for the bigger picture, what’s best for that school’s conference or college sports nationally.
staples: The point of all this is, in the minds of those in the schools pushing for a bigger share, that if nothing is done to accommodate them, they could go to another conference. That may not be for 10 or 13 years, but they will point out that 2023 felt like an eternity from 2012. And if they left, the other schools would not enjoy the same prestige and income as they do now.
It should be noted: an idea that came from a former Florida state board of trustee chair contributed directly to the granting of rights that have tied the Seminoles and the other hapless programs to the ACC until 2036.
In May 2012, then-Florida State Chief Executive Andy Haggard told Warchant.com that the school should consider joining the Big 12.
“Why don’t you check that option?” Haggard told the site. “On behalf of the Board of Trustees I can say that we would be unanimous in favor of seeing what the Big 12 have to offer. We must do what is in the best interest of the state of Florida.”
These comments set off alarm bells across the league. In September 2012, Notre Dame agreed to affiliate with the ACC in its non-football sports and schedule five football games per year against ACC teams. In November 2012, ACC founding member Maryland decided to join the Big Ten. That pushed the situation to DEFCON 1. Louisville was selected shortly thereafter to replace Maryland. At this point, the vast majority of members wanted to ensure that the ACC stayed together for as long as possible. Then all 15 members agreed on a rights deal that would run concurrently with the ACC’s media rights deal. This grant of rights was later extended through the end of the 2035-36 academic year under the Disney/ESPN agreement that established the ACC network.
Then-Commissioner John Swofford was asked in 2013 to make a deal that offered long-term security, and boy did he deliver. But the long-term consequences have been that the ACC cannot put its rights on the open market while other leagues are bitten in the apple multiple times. And that’s the main source of frustration for the schools that want an unequal share.
How should the schools that want to change the distribution of pitch income to the conference?
Auerbach: I do think that the revenue sharing associated with the upcoming expanded CFP is different and perhaps an easier battle to fight. It’s a new revenue stream, so don’t ask the world’s Boston colleges to take less money than they’re making right now. And it supports those programs that invest in football at the highest level. It reminds me of the agreement the Gonzaga men’s basketball program has had with the West Coast Conference since 2018. Basically, the Zags are allowed to eat what they kill; They keep more of the revenue they earn from deep runs in the NCAA tournament rather than splitting tournament money evenly among all WCC members. They could certainly do something similar with the ACC and the CFP, but again I’m not sure if it solves the underlying problem of a $30 million annual income gap between ACC schools and those in the leagues we already call Power 2. This is going to accumulate year after year.
Just telling others to admit that they are less valuable than you and accepting a smaller piece of the pie is not going to work. They would ask university presidents and athletic directors to return to their campuses and admit that they agreed to take less money, putting their school in a worse position now and in the future. You won’t do that, especially if it’s just to please a few co-workers. Also, I’m not really sure that agreeing to FSU and Clemson’s demands would stop them from leaving you in more than a decade anyway.
So… how do the schools that want more motivate the others to follow their plan? Or, I’m guessing more accurately, one of their plans?
staples: Here I fight. A Brexit threat in 2034, or a year before the end of rights, should feel like a real consequence. There’s a potential future where the Big Ten or SEC might want to add more quality brands, and Clemson, Florida State, Miami, and North Carolina would be candidates for one or both. (So do NC State, Virginia Tech, Georgia Tech, Louisville, and Virginia.)
For schools like Boston College, Duke and Syracuse, this is seen as a struggle to survive at this level of college sports. But it will be the people in those schools who make those decisions. What is the average tenure of a sports director? From the tenure of a university president? Should any of these people reasonably expect to be in their positions in 2034? And if not, what incentive would they have to look after the long-term health of the league? And what if the schools that push for unequal distribution get what they want now and just leave when the time comes? Then if you’re still in that role, you’re an AD or university president who gave away money for nothing.
Phillips, who didn’t contribute anything but is being paid to do so, is likely to have major concerns for the league’s long-term health. He certainly wouldn’t want to be the commissioner directing the dissolution of the league. Nor does he want to have to deal with entrenched factions that fundamentally disagree on an important issue for the next ten years.
What is the endgame?
Auerbach: I am not completely sure. Perhaps this topic is just a matter of memory – so that it will continue to be discussed in ACC meeting rooms and outside? I can understand the pressure that an AD at FSU or Clemson feels from their board or from celebrity supporters to get that kind of message out there.
We deserve more! We are more valuable than others!
Andy, you and I see the fear and hear the gossip from fandoms across the country every day. Everyone worries about revenue, stratification and the backlog. Therefore, hearing your leaders fight for more can help fans. But I’m also not sure whether there will be enough impetus here to force changes.
Another possible outcome, of course, is that someone actually decides to challenge the grant of rights in court.
staples: When that happens, things could get very messy. But I don’t think anyone is ready to take that leap yet.
(Photo above: Jim Dedmon / USA Today)