On Thursday, ESPN made a significant decision regarding the immediate future of college sports. According to a report by ESPN’s David Hale and Andrea Adelson, the network has chosen to exercise its option to extend its media rights agreement with the ACC. This choice could potentially conclude ongoing litigation against the conference from member institutions Clemson and Florida State.
ESPN had a deadline of February 1 to make this decision. Back in 2016, the ACC and ESPN formed a 20-year media rights deal that was instrumental in launching the ACC Network. However, the timing and long duration of this agreement have resulted in the ACC lagging behind its counterparts in the SEC and Big Ten regarding television revenue. Yet, there are provisions that both the conference and ESPN have negotiated to address some of these revenue disparities, especially for top programs. Among the most crucial provisions is an agreement to create more high-profile matchups in football and men’s basketball to maximize the value of the conference’s leading teams, which could also involve leveraging Notre Dame’s partnership with the ACC.
Currently, Notre Dame plays five to six regular-season football games against ACC teams, and under the new agreement, these matchups could predominantly feature top brands like Clemson, Florida State, Miami, and North Carolina. Additionally, the new provisions may allow the ACC’s most prominent schools to receive a larger share of television revenue. Per Hale and Adelson, “Under the proposed plan, a percentage of the ACC’s television revenue would be included in a ‘brand’ fund, which would then be distributed to schools that annually generate the most revenue for the conference in football and men’s and women’s basketball. Should that agreement be finalized…Clemson and Florida State would be expected to drop their lawsuits.”
The two universities have been in litigation against the conference for over a year, seeking ways to exit the “grant of rights” agreement that has inherently united the ACC during a tumultuous period in college athletics. Exiting this grant of rights could lead to financial penalties in the hundreds of millions, making any move to another conference exceedingly costly.
Currently, ACC schools receive about half the television revenue compared to those in the SEC and Big Ten. From ESPN’s perspective, the relatively low cost of the existing agreement made it an easy choice to exercise the option. Otherwise, the network might have faced higher payments for the ACC’s leading teams if they transitioned to the SEC.
The clarity surrounding its media rights and the conclusion of ongoing litigation should provide a degree of stability for the ACC. However, the next challenge could arise in just six years. As part of the lawsuit settlement, Clemson and Florida State are requesting reduced penalties for potentially leaving the grant of rights in 2031, coinciding with the expiration of media rights agreements for the SEC, Big Ten, and Big 12.
