In a recent video, a college football analyst made some dismal comments about the present situation between Florida State (FSU) and Clemson regarding their economic struggles in the Atlantic Coast Conference (ACC).
While it may seem like many things have occurred over the last several months, things are, in fact, quite similar to how they have been for long-term outcomes. The two schools, along with others, have been surfing a web of intricate financial and legal problems, but the actual turning point will only be reached in 2031.
Florida State and Clemson Face Off With the ACC: The Countdown to the $75M Exit Fee
Settlement and De-escalation: For Now
The drama began when FSU and Clemson threatened the ACC with lawsuits to exit the conference. But both institutions have since withdrawn their lawsuits for the time being. The move calmed nerves, and neither institution pursued a lawsuit against the other. While this deal seems to have a calming effect, it’s a band-aid solution for the time being, and delays are inevitable only where the financial realities of the conference are involved.
The situation is equivalent to a metaphor involving starved children—FSU and Clemson (the “starved” schools) compared to other ACC schools (the “fed” schools). The conference, recognizing the issue, acquiesced to giving somewhat more munificent financial obligations to avoid the loss of these schools.
The analyst pointed out that the deal struck by the ACC introduces brand initiatives and “success factors,” which means that schools will earn more if they gain more viewership and win more matches. This introduces a system of merit where success will be rewarded, which sounds very positive. But the underlying issue remains: the exit fee.
Now, it is just too costly for a school to attempt to depart from the ACC, with the cost they will pay decreasing by the year each year until they are down to $75 million in 2031. Okay, $75 million is not a small change, but it’s not something that the wealthier programs of the conference can’t spare, either.
2031: The Date of Importance
In the short term, Florida State, Clemson, and other strong programs in the ACC will benefit from the new revenue-sharing scheme that rewards success. If they continue to win and draw high ratings, they will make more money, closing the gap with conferences like the SEC and Big Ten. However, the gap will still exist.
To illustrate the gap, consider that SEC and Big Ten schools are making significantly more annually. For instance, if Tennessee in the SEC and Michigan in the Big Ten are making $75 million annually, a successful program such as Florida State would make $61 million.
But, the key here is that a $60 million revenue figure is not enough to keep up with the money titans of the SEC or Big Ten in the long run.
Ultimately, while the ACC has tweaked its financial configuration somewhat, the real tipping point will be when the exit fee is cut to $75 million in 2031.
By that point, schools like FSU and Clemson will likely be ready to make a break for a more financially appealing configuration. Until that time, it is in suspended animation, with the ACC giving a temporary Band-Aid to a deeper problem.
KEEP READING: ESPN Secures New ACC TV Deal Through 2036
As the calendar continues to roll into 2031, expect further negotiations and talks. Unless there is a dramatic change in the financial landscape, exit doors will soon be open for some of the ACC’s top-paid programs.
College Sports Network has you covered with the latest news, analysis, insights, and trending stories in football, basketball, and more!
