ACC weighing revenue model that would send more money Clemson’s way. A closer look

Dating back to 1998, Clemson and Florida State have accounted for all eight of the ACC’s appearances in college football national championship games and all four of the wins.

Should that extended football success — and extended football investment — warrant the Tigers and the Seminoles more revenue than their conference counterparts?

Clemson athletic director Graham Neff and Florida State athletic director Michael Alford certainly think so. And their recent public comments in favor of the ACC adopting an “unequal revenue” distribution model have fueled another round of big-picture questions surrounding the conference’s viability in an evolving college sports world.

Alford made headlines Feb. 24 when he told FSU’s Board of Trustees that “something has to change” monetarily as the ACC plays continual catch-up to the Big Ten and the SEC, rival Power Five conferences whose flashy new TV contracts start in 2023 and 2024, respectively.

And Neff, Clemson’s second-year athletic director, has taken his most aggressive public stance on the matter yet as the Tigers and the rest of the ACC’s member schools face a looming revenue gap of $30 million to $40 million in comparison to Big Ten and SEC colleagues.

For Clemson, unequal revenue distribution isn’t a want. “In all candor,” Neff told the (Charleston) Post & Courier, “I put it as a need.”

“We certainly recognize the investment that we’ve continued to make as an institution, in our community, in athletics, namely in football, which certainly drives a lot of value that is important from a television and revenue-generation standpoint,” Neff told the paper in February. “Is it time revenue distribution within conferences, or at least the ACC, is done differently? Yeah, I’ve been very active in those conversations within the league and continue to expect to take a leadership role in our desire for that to be a changed circumstance. Urgently.”

A conference ‘arms race’

An unequal revenue distribution model — a performance-based system rewarding accolades such as College Football Playoff and major bowl appearances — is one of many improbabilities that now look like possibilities as the ACC tries to keep pace with the Big Ten and SEC amid what’s being branded, quite fairly, as an “arms race.”

The rich got richer when the Big Ten and the SEC, already beneficiaries of massive TV deals, added two iconic, name-brand member schools apiece. Texas and Oklahoma agreed to leave the Big 12 for the SEC in July 2021 (with a since-confirmed 2024 start date), and Southern Cal and UCLA agreed to leave the Pac-12 for the Big Ten in July 2022 (also starting in 2024).

No, the ACC isn’t dissolving. But as things stand, it’s a 14-school league with no recent acquisitions locked into a decent TV contract. And soon enough, it’ll be competing against two 16-school leagues with high-profile acquisitions and glitzy, renegotiated television deals.

If you’re a Clemson fan wondering how this impacts your teams, the truth is in the numbers, which reveal a financial discrepancy among conferences that’s only growing.

For fiscal year 2020-21, the most recent with full data available for all three conferences, here’s how conference-wide revenue and average per-school payouts shook out for the ACC, Big Ten and SEC, according to various outlets:

• ACC: $578 million, $36.1 million per school

• Big Ten: $680 million, $46.1 million per school

• SEC: $777.8 million, $54.6 million per school

The good news for the ACC there: The conference set a new league record for total revenue. The bad news: It took Notre Dame’s wildly popular football team temporarily joining as a full-time member amid the COVID-19 pandemic to set that record — and the ACC’s per-school distributions still fell about $10 million short of the Big Ten and $19 million short of the SEC.

And the gap will only get wider, even with commissioner Jim Phillips expecting a “sizable increase” to the ACC’s 2021-22 revenue since it now has full ACC Network distribution.

Once the Big Ten’s new deal with FOX, CBS and NBC for 2023 and the SEC’s new deal with ESPN and ABC for 2024 kick in, ESPN reported their member schools will, on average, earn $30 million to $40 million more annually than ACC schools.

It doesn’t take a rocket scientist to see how that cash influx could benefit certain schools within the Power Five and hurt others, creating the sort of divide currently seen and felt between, say, Power Five and Group of Five football schools when it comes to budgets, facilities and salaries.

Consider: If an up-and-coming defensive coordinator from the Sun Belt is trying to make the Power Five leap in 2025, why consider an ACC school when Big Ten schools are offering double that salary? If the No. 1 overall recruit in the Class of 2027 is dead set on winning a national championship, what do the best ACC schools offer that the middle-of-pack SEC schools don’t? How does one compete for prestige at a perpetual disadvantage?

New model ‘incentivizes’ success

Those, of course, are the doomsday scenarios. And it’s worth noting: After a summer of big-picture realignment talk, college football was college football at its best in 2022, full of Heisman moments and memorable upsets and reminders that with the right combinations of players and coaches, non-traditional powers (Hello, TCU!) can still thrive at the highest level.

Of course, undefeated and unchallenged Georgia also steamrolled that same TCU team by 58 points in January’s national championship, logging the biggest blowout in BCS and CFP history and reminding everyone college football remains a top-heavy sport.

Which begs the question: Should Clemson, responsible for two of only four non-SEC college football national championships over the past 17 seasons, get more resources from its conference to keep pace with the Georgias and Alabamas and LSUs of the world?

Neff certainly thinks so. He’s been actively working for over a year to present and pitch a new uneven revenue distribution model for the conference and told reporters in February he was “optimistic” there’d be change as the CFP’s 2024 expansion to 12 teams looms.

New revenue models were a hot topic at the ACC’s February winter meetings in Charlotte — the conference itself even advertised that as a point of discussion in a press release — and will certainly be on the table again during spring meetings this May in Fernandina Beach, Florida.

The ACC has successfully operated for years under an equal revenue sharing model that splits funds equally among its 14 member schools and gives a reduced percentage to Notre Dame, a full-time ACC member in every sport but football, which remains independent. In other words, change won’t be easy. Meeting with reporters in February, Neff acknowledged as much.

“But I think where the understanding is is that distribution should be constructed in a way that it drives — it incentivizes — success,” Neff said, per The Clemson Insider. “And by way of that, there’s some relationship to investment. And so it’s not just, ‘Hey, Clemson or Florida State or Miami, because you’re big brands, you’re gonna get more slices of the pie.’ It’s not that rudimentary. And that’s not my lens either. But it should be based on performance.”

What’s next?

An unequal distribution model could, for example, dole out bonuses to ACC schools that qualify for the College Football Playoff or a major bowl game or the men’s and women’s NCAA Tournaments — while also rewarding schools for investing in said programs.

Under that setup, a smaller school such as Wake Forest, which may never win a football national championship but has established a rich football tradition, could be rewarded on a similar level to Clemson and FSU, which spend far more money on football than anyone else in the ACC and are the early favorites to meet in December’s conference championship game.

Clemson football coach Dabo Swinney has steered clear of the revenue topic as of recent — “I’ll let (Neff) worry about that,” he said in March as the Tigers opened spring practice — but spoke openly last summer about “maybe having some type of minimum investment in football.”

“We’ve all benefited from each other throughout this league for a long time,” Swinney said at the 2022 ACC Kickoff. “Now, does that model need to change depending on the landscape of what’s coming, where we are, projections or speculation? Maybe. But again, it won’t be the coaches talking about that.”

As noted by CBS Sports, unequal 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.

Although ACC commissioner Phillips and league athletic directors haven’t been shy about prominent shakeups — moving to a divisonless football championship format last summer was a clear attempt to stay modern — movement on new revenue distribution models has been slow.

The league’s “grant of rights,” which gives the ACC ownership of member schools’ media rights through 2036, plays a factor there. Struck in 2016 amid the extension of the ACC’s ESPN TV deal, that “iron-clad” contract presents an enormous financial challenge for any school seeking to leave the ACC amid realignment (upwards of $300 million, per one projection).

It also nixes some leverage for the schools such as Clemson and FSU pushing for an unequal revenue model that, based on a lack of action, isn’t exactly a piece of unanimous legislation among colleagues. The Athletic asked: “If those schools do not have offers in hand to join the Big Ten or the SEC, can they really force the rest of the conference to acquiesce on this?”

Time will tell.

“We certainly have our lens at Clemson about how some of that should work,” Neff told reporters in February. “So I certainly have been pushy and very much have tried to drive that task. But, again, it’s top of mind and very present for everybody.”