Inside Clemson's settlement with the ACC: What does it mean for the Tigers?

Clemson Athletic Director Graham Neff and the school has settled the lawsuit with the ACC.

David Hood - Senior Writer - Tuesday, March 04 2025

CLEMSON – The Clemson Board of Trustees met and voted Tuesday to end the lawsuit against the Atlantic Coast Conference.

What does it mean for Clemson? It’s a good thing because Clemson negotiated clarity on the two things it wanted as part of the lawsuit. An article released Monday by ESPN was clearly sourced (at least in part) by people at the ACC, and Clemson can’t look at today’s settlement the same way as Florida State. Why? Because Florida State came out talking and swinging a battering ram while announcing their intentions, Clemson’s stated intentions of the lawsuit – and the school flew under the radar for most of this – was to figure out the league’s Grant of Rights and exit fees and figure out (legally) what rights the school had (or, would take with it should it, or any school, leave the conference).

Three votes are held today as the Florida State Board of Trustees and the Atlantic Coast Conference Board of Directors discuss settlement terms that would result in the settlement of four ongoing lawsuits between Clemson/Florida St. and the ACC and a new revenue-distribution strategy that would solidify the conference's membership in the near future. All three parties have approved the settlement.

“This settlement allows Clemson to remain nationally competitive at the highest levels and makes our conference stronger,” said Clemson University President Jim Clements in a news release. “I appreciate the efforts of the ACC members and Commissioner Jim Phillips in the creation of this innovative conference model. We remain proud members of the ACC, one of the strongest conferences in the country and one in which our students, the other 17 ACC schools, and the league are committed to accomplishing greatness both on the field and in the classroom.”

"We are incredibly thankful for all of the time and work that has gone into this proposed settlement,” said Clemson Director of Athletics Graham Neff in the same news release. “We often talk about competitive excellence, and this settlement allows us to leverage our national brand to fuel that success.”

Pete Thamel of ESPN released an article Monday that said there were two key objectives: establishing a new revenue-distribution model based on viewership and a change in the financial penalties for exiting the league's grant of rights before its conclusion in June 2036 and whether those schools would take those rights with them.

Thamel said, “This new revenue-distribution model -- or 'brand initiative' -- is based on a five-year rolling average of TV ratings, though some logistics of this formula remain tricky, including how to properly average games on the unrated ACC Network or other subscription channels. The brand initiative will be funded through a split in the league's TV revenue, with 40% distributed evenly among the 14 longstanding members and 60% going toward the brand initiative and distributed based on TV ratings.

“Top earners are expected to net an additional $15 million or more while some schools will see a net reduction in annual payout of up to about $7 million annually, an acceptable loss, according to several administrators at schools likely to be impacted, in exchange for some near-term stability.”

The brand initiative is expected to begin for the coming fiscal year, and we will get more into that later because I think Thamel does a great job of breaking it down.

How does this affect Clemson? Yes, Clemson will earn more money for Fiscal Year 2026 as part of the new settlement. If the figures I’ve seen in the past are correct, it could go from around $44 million to around $62 million. That number has the potential to increase to as much as $81 or $82 million or more over the next half-decade.

Those numbers include base media rights fees from ESPN, Brand Success Initiatives (landing in the Top 25, reaching a bowl game, making March Madness), and the rolling viewership numbers. Basketball ratings will be included in the brand initiative, but the split appears to be 75%-25% in favor of football.

Over the next six years, that could amount to as much as $120 million in new revenue – a strong ROI based on legal fees.

Now, let’s take a step back. Under the old agreement, Clemson’s media rights were owned by the ACC through 2036, the end of the contract with ESPN. That means that all broadcast monies from Clemson sporting events would go to the ACC, not the school or its new conference. Plus, the school that left would have to pay an exit fee that is three times the operating budget of the conference (now around $165 million or so). That amounted to a withdrawal fee of around $700 million or more (that number was not in stone, just an amount FSU indicated in its lawsuit).

Under the new agreement, the exit fee de-escalates yearly and is down to around a reported $75 million by 2031. Even more importantly, the schools retain their media rights fees (future earnings) no matter when they leave. For example, if Clemson were to leave today, it would pay the exit fee but take the media rights money with it. $165 million is a lot less than $700 million. That applies to all schools in the Atlantic Coast Conference.

There are, of course, layers to the increased payout. Winning is paramount due to the Success Initiatives and the viewership numbers. And not included in the projections (I think around $62 million for FY26) are trips to the College Football Playoff, which could be anywhere from $4 million per school for an appearance to $20 million if that school reaches the championship game.

Just a quick note – I’ve been told that Clemson spent around $5 million in legal fees with the lawsuit, so the ROI (Return On Investment) is worth it because the school can make that up by Thanksgiving.

What schools are the winners in this? I would think that the top five schools in projected earnings would be Clemson, Florida St. Miami, UNC, and Duke, closely followed by Louisville and Georgia Tech. A next tier would be Syracuse, NC State, Virginia, Virginia Tech and Pitt and a bottom two of Wake Forest and Boston College.

Those latter schools – who haven’t invested in their athletic programs like the top-tier schools, now have an incentive to invest and get better.

To reiterate – Clemson gained what it wanted out of the lawsuit. A clearer understanding of the Grant of Rights (and a retention of those media rights fees, which are huge), and a projection of more money out of the conference, or at least a bigger piece of the pie compared to those that don’t spend as much on their athletic programs.

According to Thamel, “This was seen as a critical piece to the settlement, allowing flexibility for ACC schools amid a shifting college football landscape, particularly beyond the 2030 season, when TV deals for the Big Ten (2029-30), Big 12 (2030) and the next iteration of the College Football Playoff (2031) come up for renewal -- a figure Florida State's attorneys valued at more than $500 million over 10 years.”