Inside the big-money battle that could decide the ACC’s future
Florida State Athletic Director Michael Alford knew there would be controversy when he addressed the school’s board of trustees last week. He has already spoken to several other ACC athletic directors who shared his concerns. There was an elephant in the room, Alford thought, and it was time for someone to address him directly, publicly, directly.
“At the end of the day, for the state of Florida to compete at the national level,” Alford told the board, “something has to change in the future.”
The numbers, he explained, are impressive.
New television contracts for the SEC and the Big Ten will go into effect over the next few years, giving member organizations in those leagues $30 million to $40 million a year more than the state of Florida would receive from the ACC. The ACC distributed a record $36.1 million per full-time member in the 2020–21 season, and that number should rise slightly as the league distributes the ACC network in its entirety. However, the upcoming SEC television contract is expected to generate over $70 million per team in payouts, while the new Big Ten deal is expected to distribute at least $80 million per team annually.
The state of Florida currently shares the league’s profits equally with 13 other ACC state members (and shares a portion with partial member Notre Dame). But Alford told the board of directors that the Seminoles are responsible for a much larger percentage of that income — up to 15%, according to a consulting firm he hired on just his second day on the job — while earning just 7% a year. league payouts.
Put the two questions together—the size of the overall revenue pie and how the league decides to split it—and Alford thinks it will soon be next to impossible for the Seminoles to compete for the national football championship.
“I know how hard the commissioner and the office are working to provide conference members with solutions to the revenue gap we predict in the coming years for media contracts,” Alford told Sportzshala. “But at the end of the day, to compete to the standard we want to compete at, there has to be change, and the status quo is not good enough.”
While Alford’s concerns have been discussed at length behind closed doors over the past two years, his decision to go public with his frustrations sent a clear signal to some of his less motivated colleagues that the timeline for change must be accelerated.
At least for now, the state of Florida and each ACC school is linked to each other through the league’s grant of rights, which gives the league control of each member’s media revenue and runs until 2036. the rest of the college football world since Texas and Oklahoma first announced their intention to allocate the Big 12 to the SEC in 2021, but Alford’s comments, including speculation about how much a potential exit from the league could cost, have brought the future of the ACC to the fore. .
“None of the issues raised during this meeting were things that we hadn’t already addressed and hadn’t addressed at the conference,” Commissioner Jim Phillips told Sportzshala. “We have openly discussed revenue generation and business innovation in our league and are exploring all options to increase overall revenue.”
And yet, when Alford turned to his board of trustees, his biggest disappointment was that so little had changed. He’s hardly alone, but according to nearly a dozen ACC administrators who spoke to Sportzshala, Florida State has been the most aggressive in its pursuit of a more lucrative financial future, including exploring the possibility of leaving the league entirely.
When asked by the board of trustees about the possible costs of leaving the ACC, Florida State Counsel offered just $120 million, a figure Alford said could “hypothetically” be offset by just a few years of higher earnings in another league.
Alford’s calculations, however, do not take into account granting rights, which would make leaving the ACC – for the former Soviet Union or anyone else – a difficult task.
The league’s agreement with member schools requires an exit fee equal to three times annual income, or about $120 million. But granting the rights could potentially prevent a team from generating TV revenue – or perhaps even broadcasting their games – before the agreement expires. Phillips often pointed to the plight of Texas, Oklahoma, USC, and UCLA as examples of how difficult it would be for a team to relinquish their rights. The Longhorns and Sooners were forced to wait three seasons after announcing their intention to join the SEC and will still pay $100 million to buy out the final year of their Big 12 deal.
ACC schools have 13 years left in the agreement.
Over the past two years, several schools have sent teams of lawyers to review the official grant document, either looking for a potential exit or looking for assurances that the biggest brands can’t leave without a big fight.
As one of the administrators told Sportzshala, these reviews found several potentially valid arguments in favor of violating the agreement, but did not find an obvious loophole that would allow to get out of the situation without getting involved in lengthy litigation.
Is it worth the paper it’s written on? said one AD. “If one school starts to leave and then another, how strong is it? This will lead to a major legal battle.”
And, as one sports director pointed out, it would also take another conference to issue an invitation to join before it would know if it would have broadcast rights to that team’s games. It’s a legal Catch-22.
But despite all the hype – and at least one ACC athletic director dismissed Alford’s comments as nothing more than a game for his fans – the public statements were meant more as a warning than a threat.
A month earlier, the presidents and athletic directors of the ACC met in Charlotte, where one of the main topics on the agenda was the distribution of income. For years, larger schools such as Clemson and Florida State have argued that splitting all revenues shackles schools hoping to compete for the highest football levels while a contingent of schools happily cashes the same checks without paying serious attention to sports, which drives the vast majority of income.
.@FSUFootball leads the ACC rankings for average TV viewing at all levels from 2014 to 2021. #OneTribe pic.twitter.com/h5PC2zMG3f
— Seminoles of the former USSR (@Seminoles) February 7, 2023
Several other administrators who spoke to Sportzshala argued with Alford’s exact numbers, but mostly agreed with his main point: teams that take football seriously deserve more because they bring in more.
“I think that schools that help create income should be able to share in more revenue than they currently have, and not just split the pie the way it is, in equal shares.” Miami sports director Dan Radakovic made the announcement. “Award for success is a great motivator.”
This lack of motivation has been a point of contention for many years, dating back to the time when former commissioner John Swofford was at the helm. When Phillips took office in 2021, one of his main goals was to convince member schools to prioritize football and allocate more resources to sports. For example, last year Phillips urged schools to stop scheduling away games against G-5 opponents to save money. In 2022, the ACC played 10 such games, including three defeats that damaged the league’s image, while the rest of the Power 5 combined played just 12.
The point is, winning football requires a huge financial investment, and even before Alford’s comments to the board of trustees, Clemson athletic director Graham Neff said the need for more revenue is “urgent” if big brands want to compete with the SEC. and the Big Ten.
However, after lengthy discussions at the ACC Winter Meetings, the AD emerged without any approach to consensus on a new allocation plan, which would require a two-thirds majority. In fact, they can’t even agree on what to call this plan – “weighted distribution” as one AD said, “alternative income” as the league called it, or “unequal” as most of the administrators who oppose the plan said. .
However, for his part, Phillips believes that there is real energy behind finding a solution.
“I truly believe we have made progress,” Phillips said. “This is the main issue to discuss every time we get together. Not everyone liked the discussion or everyone agreed with everything that was said, but we left, agreeing to continue to collect options for consideration in the league. We went from never discussing it to having subcommittees to help guide the conversation.”
During talks about revising the revenue-sharing plan, the league considered a number of potential options, according to multiple sources involved in the talks, most of which include a complex formula that includes items such as total scholarships offered, brand strength, academic achievement. success and success on the field.
However, as one of the administrators of the small ACC school noted, income is a problem everywhere.
“I go to bed thinking about income,” the administrator said, “and wake up thinking about income.”
However, even the most dramatic shifts in distribution don’t quite paint a picture of financial surprise for energy programs like Clemson and the State of Florida. Estimates provided by sources with knowledge…