ESPN made a monumental decision for the near-term future of college sports on Thursday.
According to a report by ESPN’s David Hale and Andrea Adelson, the network has opted to pickup its option to continue its media rights agreement with the ACC, a move that could end ongoing litigation against the conference from member institutions Clemson and Florida State.
ESPN had until Feb. 1 to decide on its option with the conference. The ACC and ESPN agreed to a 20-year media rights deal in 2016 that helped launch the ACC Network. The timing and long-term nature of the agreement has left the ACC a step behind its rivals in the SEC and Big Ten when it comes to television revenue, though there are some provisions that the conference and ESPN have agreed to that could help alleviate some of these disparities, at least for top programs.
Among the most important provisions is an agreement to create more marquee matchups in football and men’s basketball to help maximize the value of the conference’s biggest brands. That could include leveraging Notre Dame’s relationship with the conference.
Currently, the Fighting Irish play five to six regular season football games against ACC opponents. Part of the new agreement could see these games going to top brands — namely Clemson, Florida State, Miami, and North Carolina — more often than not.
The new provisions would also include opportunities for the conference’s most prominent schools to receive a larger portion of the television revenue.
Per Hale and Adelson, “Under the proposed plan, a percentage of the ACC’s television revenue would be included in a ‘brand’ fund, and that money would then be distributed to schools that annually generate the most revenue for the conference in football and men’s and women’s basketball.
“Should that agreement be finalized…Clemson and Florida State would be expected to drop their lawsuits.”
The two schools have been in litigation against the conference for over a year with the stated goal of exploring ways to get out of the “grant of rights” that has essentially bound the ACC together during a volatile time in college athletics. Monetary penalties for exiting the grant of rights number into the hundreds of millions, making any desired exit to another conference incredibly cost-prohibitive.
Under the current agreement, ACC schools earn approximately half the television revenue of those in the SEC and Big Ten. From an ESPN perspective, the relatively inexpensive nature of the current agreement made for an easy decision to pickup the option. Otherwise, the network could’ve been left paying more for the ACC’s top brands had they ended up in the SEC.
The certainty around its media rights, and the dropping of ongoing litigation, should create some level of stability for the ACC.
However, the next hurdle could come just six years from now. As a condition of settling the ongoing lawsuits, Clemson and Florida State are asking for reduced penalties for exiting the grant of rights in 2031, when media rights agreements for the SEC, Big Ten, and Big 12 all expire.
