The ACC’s board of directors has endorsed a new “success incentive initiative” that could help Clemson in a big way starting next year.
The plan, announced Wednesday, will provide extra revenue to ACC schools based on their “performance in revenue-generating postseason competition” such as the College Football Playoff and NCAA men’s and women’s basketball tournaments, on top the conference’s annual distributions to its 14 member schools.
The ACC, in a news release, said the endorsement of the plan followed “analysis and discussions that have occurred throughout the past year.” Specifics of the plan are “in progress” and will be confirmed in the coming months ahead of its rollout for the 2024-25 academic year.
The ACC announcement is in direct reaction to its growing revenue gap with the SEC and the Big Ten, two Power Five conference rivals, and came a week after a vocal portion of athletic directors — including Clemson’s Graham Neff — pushed hard for the change at the conference’s spring meetings May 15-18 in Amelia Island, Florida.
The new plan could be a short-term financial boon for Clemson, which is the league’s football standard bearer with seven ACC titles over the past eight seasons and six CFP appearances (with two national titles) from 2015-2020.
The same goes for Florida State, whose AD, Michael Alford, was also at the forefront of the new revenue model push. The Seminoles, who have a rich football tradition but have struggled in recent seasons, went 10-3 in 2022, finished above Clemson in the final AP Top 25 and will likely be their top adversary in ACC play this season.
According to ESPN projections, the ACC’s success incentive initiative could provide schools with anywhere from $10 million to $15 million annually on top of the ACC’s per-school payouts, which won’t change under the model.
“Today’s endorsement follows significant and meaningful conversations by the ACC Board of Directors,” ACC Commissioner Jim Phillips said through a statement. “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.”
How the plans helps Clemson
The ACC’s 2021-22 tax return, released last week, revealed league records for total revenue ($617 million) and average distribution to schools ($39.4 million), according to the Richmond Times-Dispatch. That was a jump from the $36.1 million, on average, distributed to schools during fiscal year 2019-20, per The Athletic.
Now, on top of that record-setting number, the ACC has endorsed a new model that could provide an additional $10 million or more in revenue to top-performing schools, Alford told 247Sports last week.
That’s a significant bump from initial projections for the revenue model, which, according to ESPN, ranged anywhere from $250,000 to $3 million. (One anonymous AD told ESPN that number was “pocket change.”)
And it’s the most direct step the conference has taken to address its revenue gap with the SEC and Big Ten, both of whom have added two schools apiece in this latest wave of college football realignment and signed splashy new television deals.
For fiscal year 2021-22, the same in which the ACC set records for total revenue and per-school distributions ($39.4 million), it still fell well behind its conference rivals.
The Big Ten distributed $58.8 million on average to its member schools, and the SEC distributed $49.9 million to schools on average, according to USA TODAY.
ESPN has projected that ACC schools could fall anywhere from $30 million to $40 million behind SEC and Big Ten schools in annual revenue distribution in coming years, which could affect everything from recruiting budgets to assistant coach salary pools and widen an already prominent gap between college football’s haves and have-nots. (The SEC has won 13 of the sport’s last 17 football national championships including Georgia in 2022.)
The “success incentive initiative” should, on a short-term basis, placate football powers such as Clemson and Florida State, who haven’t been shy about asking for more revenue based on their value to the ACC.
As spring meetings began last week, college football insider Brett McMurphy also reported last week that Miami, UNC, NC State, Virginia and Virginia Tech had been “working behind the scenes for weeks” with Clemson and FSU to explore new revenue options or, in a more extreme scenario, find a way out of the conference.
Even though schools are bound to the conference through 2036 by a legally sound grant of rights, which lines up with the ACC’s TV contract with ESPN and would require enormous financial penalty to get out of, McMurphy’s reporting naturally caused a stir. As did league ADs leaving the first day of meetings without addressing the media last Monday.
But the league’s athletic directors and commissioner Jim Phillips quelled those concerns as spring meetings wrapped last Thursday, putting up a mostly unified front and hinting toward a new revenue model just months after leaving winter meetings without “anything approaching consensus” on a new revenue distribution plan, as ESPN put it in February.
“We’re going to continue to do what’s best for Clemson,” Neff told 247Sports after spring meetings. “That means strengthening and supporting the ACC and being a proud member, but also just making sure that we’re very connected (in the industry) in doing what’s best for Clemson.”
As noted by CBS Sports, such revenue distribution models have historical precedent. The old Big East used one to keep Miami and its then-dynastic football program around (albeit briefly), and the Mountain West used one to court former Western Athletic darling Boise State. Gonzaga, thanks to its men’s basketball team, gets weighted shares from the West Coast Conference.
Now, the ACC will follow. Even if some observers, such as McMurphy, see the move as logical but far from a long-term solution — more like “putting a Band-Aid on a gunshot wound,” as he wrote.
“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,” Duke president Vincent Price, the ACC’s board of directors chair, said in Tuesday’s release. “Today’s decision provides a path to reward athletic success while also distributing additional revenue to the full membership.”
