5/17/2023 football Edit

Commissioner Jim Phillips knows ACC must close revenue gap with SEC/Big Ten

Curt Weiler • TheOsceola

Senior Writer

AMELIA ISLAND – ACC commissioner Jim Phillips wasn’t caught off guard or taken aback by Monday’s report about the Magnificent Seven group of ACC schools.

In his address to media members at the conclusion of the conference’s spring meetings this week, he said he considers anything on that front simply schools doing due diligence about their own future in the uncertain landscape of college athletics.

“That just isn't news to me, per se. There's not a conference in the country and there isn’t an institution in the country that hasn't talked about conference expansion and the landscape and what's best for our individual institution, what's best for our conference, etc.,” Phillips said Wednesday morning. “But I appreciate that and understand the attention to it. It's no different than when folks come to Greensboro to take a look at the Grant of Rights, our media rights and those types of things. I encourage them to come. I really do. That’s not a warning sign to me from the standpoint of something bad may happen. These are schools that are under a lot of stress and a lot of pressures and I understand that, I really do.”

The ACC has established itself as a solid third-place team in the college athletics television contract sweepstakes. While the Big Ten and SEC have new contracts set to go into effect soon that will see them shoot upwards of $60 million and possibly even $70 million distributed to each school annually, the ACC distributed $36.1 million to each school for the 2020-21 fiscal year.

While that number is a distant third, it should be well ahead of the deals the Big 12 and Pac-12 (without Oklahoma, Texas and UCLA, USC, respectively) have just signed or are about to sign in terms of annual payouts to the schools.

The bad news for the ACC is that it is locked into this deal with ESPN through 2036 and won’t see a sizable increase on that front until over a decade from now.

“The reality is our conference is third in the country in distribution. As we look at the projections, at least in this decade, we're going to continue to be there,” Phillips said. “Now we want to close the gap and we need to close the gap between the top two conferences that have started to run away from us…

“I don’t think there’s one silver bullet or one move that you make that can close that financial gap. All that being said, the league is strong, the league has been successful.”

Finding ways to reduce this gap was one of the main goals of this week’s meetings at the Ritz-Carlton in Amelia Island. And there was definite success on that front.

While there’s nothing official yet, the ACC is expected to begin implementing “success incentives” in its conference revenue distribution to schools. Schools that make the College Football Playoff or the NCAA Tournaments in basketball or baseball will get a bigger piece of the ACC’s revenue pie.

A group of ACC Board of Directors members, including FSU president Richard McCullough, saw the models being considered during a Tuesday meeting this week.

“There's great enthusiasm there…” Phillips said of the early feedback for the models. “I’ve said before we just have to look at revenue differently. I said that when I first came and certainly say that now two-plus years later. So I feel good about that.”

“We're heavily invested in all of our sports, but certainly football is the one that everyone's mind goes to and so heavily invested there and we've seen the outcome of performance there and we're going to continue to take action,” Clemson director of athletics Graham Neff told the Osceola. “So I think a lot of the notion with the revenue share discussion or model, whatever you want to call it, is to connect those dots. That investment will hopefully breed performance, which now with a revenue model as such, would breed revenue or a greater share of revenue. So the connectivity makes some sense, encouraged to see how that continues to transpire and work through a president's group on that (model).”

FSU AD Michael Alford told a group of reporters in Amelia Island on Tuesday night that the models being considered could reward teams upwards of $10 million annually for on-field success with their various teams.

However, Phillips wasn’t willing to commit to a similar potential ceiling with a few models still being considered.

“It’s too early to tell. We're not that far down the road. We're not ready to announce this thing in the next week or so,” Phillips said. “The percentages, that will be decided by the presidents on the formula and some of the metrics and how we put it together. But they've seen it and it's got really good traction.”

Another decision that will come down to the ACC Board is when this new revenue-sharing model is enacted. Phillips did say, though, that it could go into effect simultaneously with the expansion of the College Football Playoff next year.

Another ongoing discussion point is the possibility of adding the conference’s television revenue into the conversation of potentially being split unevenly in favor of the conference’s bigger brands.

“We’re still talking about that,” Phillips said.

Especially when television revenue – a big chunk of the pie – is not factored in, it’s hard to envision the success initiatives making up the difference in revenue between the ACC and SEC/Big Ten. As such, Phillips pledged he’s continuing to look for further ways to make up that gap.

“It's never good enough for anybody that's competitive. Of course not. Our schools have done a great job with the resources they've been given and so what I understand is anything else that we can do to close that gap will exponentially help our schools. I think about it every day, I do and it is what it is…” Phillips said. “I understand times change and so you adjust, just like anything else in life. It's not always a straight line. So we're figuring this thing out.”

The bottom line as far as the ACC is concerned is that a breakup does not appear imminent. While the report of the Magnificent 7 that began this week’s meetings seemed to indicate the conference may be on the brink, that simply isn’t the case.

Even if the extended ACC Grant of Rights agreement is the main thing keeping FSU, Clemson and others from potentially bolting right now, this week proved to be a fruitful one for the conference in Phillips’ eyes.

“I feel like we have a really connected group, I really do and I'm not just saying that. They understand what we're faced with. Having discussions and thinking about what's best for my school, I don't know how you can completely criticize that because that's the nature of this business that we're in in college sports…” Phillips said. “What I’ve been told is we’re all in this thing together. Just that. We believe in the ACC, we believe in where we’re going and we want to continue to work together.”