The inner revolt of the ACC
How a survival of the fittest mindset is threating to start another round of realignment
Realignment is a constantly burning issue across the college football landscape. As more and more teams and conferences are seeing member changes, it’s become a new standard. The PAC-12 has been the main topic of questions. Who is going to stay? Are Oregon and Washington heading to the Big 10? What about the Arizona, Arizona State, Colorado and Utah to the Big 12 rumors?
One major conference has flown under the radar until now: the ACC.
On May 15, Sports Illustrated’s Ross Dellenger put out a column about conference realignment that included some bombshells about the conference, and how realignment could be pushed by some of its biggest brands.
Who’s trying to leave the ACC?
Dellenger reported that there is a subset of seven teams in the conference that want to see an uptick in revenue in line with the other Power Five conferences.
A subset of seven schools in the 14-member conference has coalesced over what many of them describe as an untenable situation. Officials from the seven schools, led by Florida State and Clemson, have met a handful of times over the past several months, with their lawyers examining the grant-of-rights to determine just how unbreakable it is.
- Ross Dellenger, Sports Illustrated
We’ve got two names: Florida State and Clemson. Later on Monday, we got the rest of the list from Action Network’s Brett McMurphy: Florida State, Clemson, Miami, North Carolina, NC State, Virginia and Virginia Tech.
(No link to the tweet, as Twitter decided to no longer function with Substack, but that’s neither here nor there. Follow me on Substack Notes.)
Each of these schools bring a big brand. North Carolina has had success on the gridiron recently with Drake Maye, and they’re a premier basketball program. Virginia brings perennial basketball power. Miami has the massive “The U” branding that still drives numbers, and is a very highly regarded research university. NC State may seem like the odd school out here, but they could have protection from their rival, North Carolina. They’re one of the top academic schools in the Power Five, ranked only behind Stanford in Sports Illustrated’s Desirability Rankings. Likewise, Virginia Tech looks similar to NC State, but are also getting brought around by their similarly desirable rivals.
What’s stopping these schools from just leaving the ACC?
The ACC has one of the nation’s most stringent grant-of-rights.
For those who don’t know, a grant-of-rights is an agreement by schools to transfer their media rights to the conference. Basically, each school sells the rights to broadcast their games to the conference for the duration of the contract. Then, the conference sells the entire package of broadcast rights to a media company for multiple billion dollars at the Power Five level. That money is then evenly distributed back to the schools on an annual basis, and makes up most of the schools’ athletic budgets.
The ACC’s was signed way back in 2014, during the last round of realignment. The Big 10 had just poached charter member Maryland and was moving further east to grab Rutgers. To replace the Terrapins, the ACC turned to Louisville, and added Notre Dame as a non-football member.
To keep the league together, the ACC and then-commissioner John Swofford signed a new grant-of-rights agreement that would hold the league together through June 30, 2027. Then, in 2016, the grant-of-rights was amended with the creation of the ACC Network to take the deal through 2036.
Teams can break a grant-of-rights, but it’s very difficult and very expensive. Texas and Oklahoma broke the Big 12’s grant-of-rights to facilitate their move to the SEC after this season, one year ahead of the Big 12’s grant-of-rights’ expiration. The cost of that one year of broadcast rights? A combined $100 million.
Now, that doesn’t mean the universities cut nine-figure checks to the conference. Instead, the $100 will be paid out in “foregone distributable revenues.” That basically means that the two programs won’t collect checks for their media rights. The SEC move is going to make up that money, but it will take time. A lost $100 million is the same as a paid $100 million, at least in the budget of these schools.
Does the ACC’s rebellious brands have the cash to break a grant-of-rights this far in advance? Probably not. That $100 million was swallowed by two of the nation’s most valuable brands. And that’s only for one year. What would potentially more than a decade cost?
If breaking the grant-of-rights is out of the question, what comes next?
According to Dellenger, there are four main options for the ACC. Let’s run through them all to see how likely or even possible they are.
1. Ask ESPN to pay more for their rights
Yeah, that’s not going to happen. ESPN is currently mired in budget cuts, and they already have a contract signed at a lower value. With negotiations stalling between the Mickey Mouse-led sports network and the UFC/WWE, PAC-12, and NBA due to money, they’re not going to just fork over more money for a brand they already own. Cross this off the list.
2. Secede from the ACC
We already touched on this, so I’ll keep it short here. Most of these brands don’t have the capital to afford breaking the grant-of-rights. Maybe Clemson or Florida State could, and Miami and UNC are a stretch, but that’s years away if they want to break the grant-of-rights. If we use the Oklahoma-Texas move as a model, the price could top $500 million per school if they left now. That’s not going to happen.
3. Create a new league
Now that’s an idea.
The so-called “Magnificent Seven,” as dubbed by McMurphy, are the biggest brands in the conference. They also make up half the conference. Is that enough power to dissolve the ACC? Potentially.
Schools like Duke could potentially weather the storm, but they’re the only ones on the outside that could still participate at a Power Five level without the ACC deal. Wake Forest, Pitt, Boston College, and Louisville would likely have to drop to a lower level, especially as some value academics more than athletics. Georgia Tech and Syracuse had previously invested into athletics, but that’s waned in recent years.
Would the not-so-Magnificent Seven let the other half leave? Or would it be a messy divorce that leaves everyone unsatisfied?
4. Force an uneven revenue split
This is the most likely outcome.
The league is already considering this option at their current spring meetings, according to Dellenger. There’s a lot to figure out about how the system would work, though. Reports are generally showing that the idea is revenue would be split by on-field performance. But, what field?
Football is the primary money driver, so it would be fair to assume that gridiron success would be a primary determinant. Men’s basketball is the second biggest money generating sport, so that’s another. But what about Olympic sports? Or women’s sports? The ACC has some premier track and field programs, both for women and men. What impact does a track and field national championship have on the revenue split? What about softball?
I think that the uneven revenue split will happen with the threat of the Magnificent Seven leaving. There’s a lot of hurdles to clear for that to happen, though. For updates, keep an eye on Florida State AD Michael Alford, who is the most loose-lipped representative of the Magnificent Seven.
What’s next for the ACC?
In all honesty, that depends on how these spring meetings go. If the league and commissioner Jim Phillips are able to decide on a revenue split, the league could survive. If not, then more doom and gloom articles are to come a la the PAC-12.
In the end, I think that Clemson and Florida State will leave. Regardless of what their revenue split could end up being, they recognize that they can make more in either of the Big 2 conferences: the Big Ten and the SEC. It won’t be immediate, but they’re going to leave. It’ll probably be closer to 2030 when they pull the trigger and really start driving home the threats, but it’s coming.
This isn’t a conference that is going to implode overnight, though. There’s too much money involved and a grant-of-rights that stretches too long. Even though we’ve all been told that the ACC grant-of-rights is iron clad, it’s not. We can see that now.
In the end, the ACC is going through some drastic changes. It’s going to be a big adjustment that will have shockwaves across the college sport landscape. This is something worth watching, and no matter what happens, college football will be changed.
But don’t sleep on this. Change is coming. Realignment is coming. It’s not a matter of if. It’s a matter of when.