D1.ticker Special Edition |
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D1.ticker Special Section - Thursday, March 6, 2025 |
The ACC’s settlement with Florida State & Clemson earlier this week was followed by a slew of analysis from notable industry journalists. With an aim to provide greater coverage of this important development, while not missing a beat on other key news across college athletics in our daily D1.ticker editions, we’ve curated a special section on the topic below. We hope this effort provides you with key insights and perspectives in D1.ticker’s efficient, easy-to-consume style.
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From the Virginian-Pilot’s David Teel: “[The settlement] appeases Florida State, a chronic malcontent that believes the Big Ten and/or SEC will grovel for its brand whenever the Seminoles become available. The wisdom in that arrogance is debatable, as those leagues have plenty of mouths to feed and no intention of diminishing their current members’ annual revenue shares. But de-escalating exit costs gives every school flexibility, while also stabilizing membership for a few years.” That said, Teel notes that in 2022-23, the most recent year for which tax documents are available, “the gulf between the largest share, North Carolina’s $46.9M, and smallest cut, Georgia Tech’s $43.3M, was less than $4M. That disparity could mushroom to $20M and beyond in the new model.” With a new emphasis on TV viewership, Teel notes North Carolina, Virginia Tech, Clemson, Florida State, Miami (FL) and Georgia Tech “should pounce” on 2025’s opening weekend. “The Hokies play South Carolina at Atlanta’s Mercedes-Benz Stadium in an exclusive Sunday window; the Tar Heels welcome TCU on Labor Day in Bill Belichick’s college coaching debut; the Tigers, Seminoles and Hurricanes host LSU, Alabama and Notre Dame, respectively; the Yellow Jackets travel to Colorado, coached by ratings magnet Deion Sanders.” (link)
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The Mercury News’ Jon Wilner analyzes how the settlement impacts Cal and Stanford and posits they are “unlikely to lose significant revenue because they were already at a major disadvantage in that area, thanks to the partial-share terms of their membership agreements. The Cardinal and Bears are set to receive just 33% of the ACC’s media rights for seven years, followed by a two-year increase and then full-share membership in Year 10. But there’s a massive catch: By the time Cal and Stanford reach full-share status, in 2033, the biggest brands in the conference could be long gone and the ACC on its way to a major restructuring — or collapse.” Looking at the bigger picture, Wilner submits that “we should expect the Big Ten to follow a similar [uneven distribution] path when it strikes a new TV deal. Why should Ohio State accept the same dollar amount as Purdue? Why would Michigan agree to the same deal as Minnesota?” Oregon and Washington, Wilner adds, “agreed to receive half shares of Big Ten’s TV revenue under the current media deal assuming they would graduate to full-share status for the next cycle. But if the Big Ten adopts a revenue distribution model based on success and TV ratings, there’s no guarantee of full-share status for anyone. The full ramifications of the ACC’s settlement, both on conference realignment and revenue distribution, will take years to play out. But this much is clear: The peace is temporary.” (link)
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The performance-based revenue distribution is reminiscent of an ultimatum issued by USC to the Pac-12 when the league presented a plan to end the unequal revenue received by the Trojans and USC. CBS’ John Talty: “When that plan was revealed, then-USC AD Pat Haden threatened to leave the conference if his school didn't receive a greater cut of the financial pie. It'd be more than a decade for that threat to be realized, but eventually, USC and UCLA left for the greener pastures of the Big Ten. That started the implosion that ultimately toppled the Pac-12 leaving only Oregon State and Washington State.” Former Utah AD Chris Hill, who was in the room for that conversation, looks back on rebuffing USC as a fatal error. "We should have woken up and said this is unique. We have one market that dominates and we need to recognize that and give them more money since we're all making a lot more money and accept that. We didn't do that. At the end of the day, that was a big mistake." The question for other conferences moving forward, Talty concludes, is “what happens when schools like Alabama and Texas decide they deserve a bigger cut than Mississippi State and Vanderbilt? Or Ohio State and Michigan saying we want more than Purdue and Rutgers?” (link)
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Sportico’s Eben Novy-Williams also examines the potential long-term impacts of the league’s new uneven revenue distribution model. Over the last few years, Novy-Williams has been told by Power 4 ADs and commissioners their leagues will “never” go so far as to expel the “least valuable” members. “But tiered revenue-sharing is a way of addressing this imbalance without the more nuclear option. If Texas and Georgia were to really push for a bigger piece of the SEC revenue pie, it would be hard for Vanderbilt to retain its share. Teasing the idea out further, we may not be far away from multi-tier leagues—A division and B division—or from conferences using revenue sharing percentages as a lever to nudge less-valuable schools elsewhere. (A rep for the Big Ten declined to comment on the future of the league’s revenue-sharing policies. A rep for the SEC didn’t respond to a request for comment.)” Regarding the future of the ACC – and whether Florida State and Clemson will be in it – Novy-Williams notes the “2031-36 stretch will be critical. The Big Ten’s media deals are up in 2030, followed by the Big 12’s the following year. The NCAA’s $8.8B March Madness agreements with Turner/CBS are up in 2032, as is the CFP’s $7.8B deal with ESPN. No telling what college sports will look like by then, but it won’t look like this.” (link)
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IP attorney David McKenzie tells CBS’ Brandon Marcello that “long-term, this revenue-sharing adjustment feels like a Band-Aid on a bullet wound. It might delay immediate chaos, but it doesn't solve the fundamental problem: FSU and Clemson don't want a bigger piece of the ACC pie — they want an entirely different pie (Big Ten or SEC money). When the next wave of media deals is up in 2030, those schools will face the same financial pressure, and the ACC will be back at the bargaining table — or the courthouse." As for how conference affiliation may shake out in the future, Marcello contends that it’s “likely the Big Ten and SEC continue to work together with new scheduling partnerships, which will create new lucrative TV packages to sell to media partners. Who can say that the Big Ten and SEC's partnership won't blossom into something we're not contemplating today? Forget the ‘super conference,’ why not create a Champions League with a relegation system? … Expanding a conference's footprint into new TV markets defined the 2010s and 2020s. That well is tapped. Cable is dying. Marquee matchups matter, and conferences are more reluctant to carve more pieces in the pie. Untapped business opportunities and creative thinking will define this next era, leading to better returns on investment. Conferences and athletic departments that capitalize on what they have rather than what they can create will produce the winners in these hunger games. Those that can't … well, natural selection will run its course.” (link)
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The Athletic’s Matt Baker crowns Florida State, Clemson, Miami (FL), North Carolina and Virginia winners in the settlement, noting the Tar Heels may be the biggest winner: “North Carolina is one of the top brands in the ACC and just hired NFL legend Bill Belichick as their head coach. That’s a recipe for high ratings and, by extension, money. Though the Tar Heels did their due diligence on conference realignment, the school did not sue,” thereby reaping the benefits without footing the legal bills. Whether the ACC is a winner in the settlement is TBD, according to Baker, who explains: “The league’s long-term future is still murky because it’s only going to get easier and cheaper for the ACC’s biggest brands to bail. Then again, the ACC’s long-term future was already in jeopardy as the Big Ten and SEC gained strength. The settlement brings a few years of peace and the end of legal fees while giving the ACC time to regroup before the next realignment wave. Perhaps the conference’s brand and value rise enough to entice better programs if they have to replace teams in the coming years.” For the “smaller brands” in the conference, Baker writes: “The poor will get poorer as the rich get richer. Then again, considering the propensity of the ACC’s big brands such as Miami (no ACC football titles), North Carolina (last title, 1980) and Florida State (five losing seasons in the past seven years) to underachieve, maybe we shouldn’t assume which schools will be cashing in.” (link)
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Yahoo’s Ross Dellenger and Dan Wetzel and Sports Illustrated’s Pat Forde discuss what the ACC’s next steps are. Regarding whether the league should change its position and support expanding the College Football Playoff to 14 teams, Forde notes that “in theory, you should always have two of the top 14, but in reality I would be concerned enough, I guess – whether or not you're dealing from any position of strength – again, I would like to see people stand up for what's best as a whole for college football, but those things are fungible and tend to take a backseat to what's best for the ACC, and that might be an easier deal for Jim Phillips to sell at this point.” Dellenger submits that the ACC and Big 12 know that “guaranteeing yourself two [CFP AQs] is not bad. I think it might be good for even some leagues, but it's just the thought of starting the season two spots in the hole. … But the path to the playoff and, thus, the path to the success initiative in the ACC – which, again, is a lot of money – if an ACC team makes it to the championship game, they get around $25M if you check all these benchmarks. The path to get there is easier, so if you can consistently make the playoffs, that'll probably guarantee you $10-12M in success initiative and then if you [rank in the] top couple [TV viewership] spots and you get an extra $15M, I mean, boom it is $20-25M right there and in that kind of helps you close the gap a little bit.” Forde on what the settlement means for Notre Dame: “Every destabilizing factor I think kind of adds to Notre Dame's precarious situation. They are obviously super tied to that league other than football and they need a healthy ACC to anchor their teams but still give them the sweetheart deal…where they can still be a football independent.” Full podcast. (link)
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In settling its lawsuits with Clemson and Florida State, the ACC may have “set a precedent that further destabilizes the entire landscape,’ according to Sports Illustrated’s Pat Forde, who writes: “Uneven revenue distribution is a concept that the likes of Ohio State, Michigan, Penn State, Texas, Alabama and Georgia could get behind, to the alarm of their SEC and Big Ten compatriots. If the schools that win and draw ratings are rewarded for it in the ACC, the idea is sure to come up elsewhere. The rank-and-file schools like Mississippi State and Minnesota had better clutch onto their equal conference revenue shares—heck, their conference membership—while they can.” Forde goes on to observe that “in another appeasement move, the ACC has agreed to schedule its top teams more frequently in the annual matchups with the Notre Dame Fighting Irish. The current plan is an annual Notre Dame–Clemson game, with Florida State and Miami [FL] rotating. That leaves three other ACC–Notre Dame games parceled out for the other 14 league members. Thus the league has created a self-fulfilling prophecy, boosting the ratings of the Tigers, Seminoles and Hurricanes more than the others by giving them more games against the high-profile Fighting Irish. Ratings-based financial incentives will also lead to greater scrutiny of which programs are granted viewer-friendly TV windows. Friday night games did well last season—Miami–Virginia Tech drew 3.26M viewers, for instance—so who gets those opportunities? The ACC also has some splashy traditional programming windows across Labor Day weekend that now could carry monetary advantages.” (link)
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The ACC’s settlement with Florida State and Clemson is “like Jurassic Park,” according to USA Today’s Dan Wolken, who explains: “For now, the ACC’s relationship with those two fidgety members has been placed in amber, suspended in time, just like the dinosaur DNA that scientists eventually unlocked in the novel/movie. But college sports isn’t going to have to wait several millennia before letting the hungry velociraptors out of their cages. It's only going to take until 2030. Because that's the year all hell is going to break loose in college sports. … Just wait until the Big 12's television deal expires in 2031, followed by the Big Ten’s in 2032 and the SEC’s in 2034. Oh, and it just so happens that the College Football Playoff and the NCAA’s March Madness media contracts will be up for renewal at the same time as the Big Ten. … And guess what? It just so happens that 2030 is when Clemson and Florida State will be able to leave the ACC for less than $100M.” As for what precisely that means, Wolken submits: “Further expansion of the SEC and Big Ten beyond their already bloated footprints? Some kind of merger into a superleague that mimics the NFL? A breakaway from the NCAA? Some type of hybrid where fully professionalized schools play in one division and everyone else has their own rules? … We won’t have answers to until things start to happen in 2030 and 2031.” Overall, the settlement leaves the “long-term future of the ACC a bit murky, but let’s be honest – that’s the case across college sports right now. Getting some short-term stability is probably worth that trade-off.” (link)
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The most important settlement point between the ACC and Florida State and Clemson is the exit fee dropping to “well below” $100M after the 2029-30 academic year, according to On3’s Andy Staples, who writes: “That number feels quite manageable. Especially for schools that would have three or four years to get their ducks in a row. What massively important event happens at the end of the 2029-30 school year? That’s when the Big Ten’s current media rights deal expires. If the Big Ten wanted to expand beyond its current 18, that would be the year to do it. Even though the SEC’s current deal doesn’t end until 2034, its best chance to keep the Big Ten from encroaching on its footprint would be to make a defensive move that year.” Staples goes on to point out that “by 2029, an ACC school making $60M a year might still be $20M or more behind a Big Ten school. If the gap remains wide, the questions at that point would be: Could the Big Ten make more money per school by expanding beyond 18? Would the SEC consider expansion beyond 16 in order to keep the Big Ten out of its footprint? If the answer to the first question is no, then this version of the ACC might hold together. The Big Ten probably wouldn’t expand if it weren’t financially worthwhile. The SEC probably doesn’t need to add southern schools for the sake of adding them. But if the answer to the first question is yes, someone is probably leaving the ACC. If the answer to both questions is yes, then the two richest leagues could wind up competing for new members.” (link)
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