5/18/2023 football Edit

Questions abound about FSU, ACC exiting conference spring meetings

Curt Weiler • TheOsceola

Senior Writer

Florida State director of athletics Michael Alford has been far and away the most vocal person talking about the need for a new ACC revenue model.

He was the first person to publicly open that can of worms back in February and entered this week’s ACC Spring Meetings in Amelia Island with that discussion atop his to-do list with a bullet.

With the ACC’s Grant of Rights agreement set to run through 2036, there’s no easy path out of the conference for the Seminoles. The exit fee alone is expected to be north of $100 million and that doesn’t even factor in the vacated media rights through 2036, which would let the ACC prevent any FSU games from being broadcast on television until then if it so chose, effectively tanking its value to any other conference.

That leaves Alford having to find other ways to try and make up the revenue gap between the ACC, which has the third-most profitable television contract, and the SEC and Big Ten, which are about to have far and away the two most profitable TV deals.

While discussions of splitting television revenue unevenly are still ongoing, the ACC ADs left their meetings Wednesday with a deal on the horizon that will reward athletic departments that have more success more heavily than those that have less.

It’s far from optimal for FSU. However, it’s a positive enough step for Alford that he backed off his aggressive messaging, preaching to a group of reporters Tuesday about his desire for FSU to remain in the ACC long-term and the unification of the ACC ADs exiting the meetings.

“A step in the right direction,” Alford said of the pending revenue-sharing shift.

How much money could a school make from the new success initiative revenue model?

Alford said at ACC Meetings that he is under the impression that some of the models being considered could see athletic departments make as much as $10 million more than they are now if they have the proper level of success.

ACC Commissioner Jim Phillips wouldn’t commit to any such estimate, citing the process not being that far down the road.

One thing is clear, though. The days of the ACC equally dividing the revenue created by the success of its best teams may be coming to an end.

Under the current agreement, each conference is awarded $6 million for each team that makes it into the College Football Playoff and $4 million for any teams which are selected for New Year’s Six bowls under the CFP umbrella.

As things currently stand, that money is divided equally among all conference teams. That means that every school – even those that haven’t come close to sniffing the Playoff since its 2014 inception – has made just north of $425,000 for each of the conference’s six CFP appearances outside the 2020 season (Clemson has five and FSU made one) and $800,000 for Clemson and Notre Dame’s 2020 CFP appearances when the Irish were full-time members of the conference.

Nothing is concrete yet, but could the ACC begin distributing that CFP/NY6 revenue directly to the school that accomplished the feat instead of evenly distributing it? That would go a long way towards setting up the possibility of Alford’s estimate if things broke right.

“What I like about it is it puts the onus on me to go and capitalize on it,” Alford said of the success initiative model. “I will bet on Florida State to go out and do the best we can, control our own fate.”

FSU AD Michael Alford says ACC took step in right direction at ACC Spring Meetings

The bad news for FSU is that it sounds like this new model will go into place starting in 2024, meaning that it’s quite likely if the 2023 FSU football team makes a run to a New Year’s Six bowl or even the College Football Playoff, as some are projecting, it could still be sharing that money with the rest of the conference.

Another area where revenue distribution could be revisited is in the NCAA men’s basketball tournament. As things currently operate, the ACC receives one unit for each game one of its member organizations play in March Madness. Those units each have identical monetary values and the pool of money generated by the units is distributed evenly amongst the member schools over the next six years.

In 2022, units were worth $338,887, which is multiplied to just north of $2 million over the course of the following six years. The ACC earned over $32 million ($2.17 million per school over the next six years) with 16 units in the 2022 tournament, but saw a lower number with just 12 units in the 2023 tournament.

Another way to reward success could be to pay schools directly for the units they earn instead of splitting the ACC’s pot evenly. While not confirmed to be in play, there is a precedent for this, with Gonzaga keeping all of its NCAA Tournament units for itself since 2019 as the runaway leader of the West Coast Conference.

If that were to be a factor in the ACC’s new success initiative model, it would put an onus on the FSU men to break their recent skid and return to the form of 2018-2021 when they made three straight Sweet 16s to better reward the FSU athletic department.

The NCAA women’s basketball and baseball tournaments don’t operate under the same unit-based system, but it’s possible one or both of them could factor into the success initiative model, financially rewarding ACC teams which make these respective tournaments.

How big is revenue gap now? How much bigger will it be soon?

Competitive was a word that came up quite a bit in Alford’s talk with the media Tuesday.

He mentioned on a few occasions that his main focus is ensuring that FSU will continue to remain competitive in the college athletics landscape.

At this point in time, the revenue gap between the ACC and the Big Ten/SEC remains present but manageable.

The ACC distributed $36.1 million to each school for the 2020-21 fiscal year and the AP has reported that it is expected to distribute about $43 million per school for the 2021-22 fiscal year. That increase is a factor of Notre Dame no longer being a full-time football member as it was in 2020-21.

That’s not horribly far behind the SEC, which distributed $49.9 million per school for the 2021-22 fiscal year, or the Big Ten, which distributed $48.6 million per school in the pandemic-impacted 2020-21 fiscal year.

The problem for the ACC is that gap is about to grow exponentially.

While the ACC is locked into a television deal for the next 13 years, which shouldn’t grow its distribution to schools much, the SEC and Big Ten are about to significantly widen their advantages thanks to new television deals.

ACC Commissioner Jim Phillips talks need to address revenue gap

The Big Ten’s new deal, which was announced last August, goes into effect July 1 of this year and will pay the conference over $1 billion per year annually through the 2029-30 season.

The SEC has agreed to a 10-year, $3 billion deal with ESPN, which goes into effect ahead of the 2024-25 season.

Both deals will see schools in the conferences paid upwards of $70 million annually, creating a much larger revenue gap that the ACC will struggle to make up. The even crazier part is that both the Big Ten and SEC will be able to agree to new deals again before the ACC’s 20-year deal with ESPN finally runs out in 2036.

The revenue gap as it currently stands hasn’t yet stopped FSU from remaining competitive nationally in football and other sports. The recent football struggles were due to other, non-financial issues that stemmed from an ugly breakup with Jimbo Fisher and a poor decision to hire Willie Taggart as his replacement.

The 2022 FSU football season and the hype around the 2023 FSU team is proof that the Seminoles can remain competitive in the football landscape as things currently stand. As that revenue gap grows, though, that will become more challenging.

That’s also true beyond football. Alford talked Tuesday about his pride in FSU’s ability to fund all of its athletic teams to be able to compete for championships. That’s been especially clear in soccer, softball and beach volleyball, where the Seminoles are perennially one of the best teams in the country.

But as the revenue gap grows and Big Ten/SEC schools are able to outspend FSU in that space, that challenge will grow tougher for the Seminoles, a point that Alford addressed Tuesday.

What is the state of the ACC’s Grant of Rights agreement?

No matter what anyone may think or wish, the ACC was never going to splinter this week.

Look no further than the timelines surrounding Oklahoma and Texas’ Big 12 departure or USC and UCLA’s Pac-12 departure – both nearly two years in the making and still not totally resolved – for proof of that.

Despite the report shared on Twitter by Action Network’s Brett McMurphy that outed FSU, Clemson, Miami, North Carolina, NC State, Virginia and Virginia Tech as a “Magnificent 7” group, which has met together with lawyers to examine how unbreakable the Grant of Rights agreement is, there wasn’t going to be any action at this week’s spring meetings.

For one, it’s unclear if all seven of those schools would improve their standing in college athletics if they left the ACC. While FSU, Clemson and a few others have done enough that they would likely elevate their spot, it’s unlikely that all seven of the aforementioned schools would be invited to either the SEC or the Big Ten.

Much has been made about the magic number being eight and that if eight ACC schools all want to leave that it will dissolve the GoR and allow all of them to exit without surrendering their media rights and leaving just a buyout in the neighborhood of $120 million to escape the ACC.

While FSU may be able to raise that money considering the significantly increased revenue it could receive in either the Big Ten or SEC, it just won’t be that easy.

Any such effort would likely lead to a lengthy and pricey legal battle. After all, the ACC took Maryland to court before settling on an exit fee buyout when it announced it was leaving the conference for the Big Ten in 2012.

Considering that was the case for one school leaving, imagine how much more drastic the legal effort may be if the potential dissolution of the ACC was on the line with over half the member institutions attempting to leave.

The fact that no one has yet been able to find an escape-clause loophole in the ACC’s Grant of Rights means it may not exist. That’s bad news for FSU and likely part of why Alford played nice in his public address this week, citing unity among ACC leadership because at this point in time there is no other option.

Maybe that changes at some point in the next few years. FSU isn’t going to take being as much as $30 million a year behind its competitors in the Big Ten and SEC sitting down.

Maybe as the 2036 deadline nears and the exorbitant total exit fee shrinks, FSU can begin to explore other options

But for now, it would seem that FSU will have to accept its fate while doing everything in its power to shrink the gap that could turn more and more from a molehill into a mountain over the next decade.