Sources: ACC in process of extending TV contract with ESPN for 9 more years

ACC executives are in the process of formally ratifying the extension of its television contract with ESPN for another nine years, sources tell Yahoo Sports.

In a long-expected move, ESPN is exercising the option in its agreement with the league. The network’s extension takes the contract, currently expiring in 2027, to 2036. The deal remains mostly unchanged.

ACC presidents met Wednesday for a briefing and are expected to accept, if they have not already done so, the network’s extension, though there is little to no other option. Within the ACC’s deal with ESPN, the network — not the league — is afforded the option to extend the package by its own discretion.

As part of the extension, the league’s biggest brands — Florida State, Miami and Clemson — are expected to play more football games regularly with Notre Dame. The Irish are expected to play, at the very least, two of the three each season in a rotation.

The extension paves the way for the league to potentially finalize a settlement with Clemson and Florida State that would keep them in the conference under possible alterations to the conference grant of rights and the league’s revenue distribution structure, as Yahoo Sports reported in September. The sides, negotiating for months now, are inching closer to a resolution.

The ESPN television contract is at the heart of the matter.

FSU and Clemson’s lawsuits against their own league was originally thought to be an effort to leave or, at the very least, spark change to both the ACC revenue distribution and the length of the league’s grant of rights, which coincides with ESPN’s television contract.

Frustrated over the conference’s long-term TV deal, Clemson and FSU officials have for months been negotiating with league administrators over concessions to remain in the conference. The ACC’s ESPN contract pays a fraction of the SEC and Big Ten’s media money and extends longer than any active major conference deal — a sore subject with the ACC’s biggest brands but a contract that each school president ratified years ago.

The potential willingness from the schools to remain in the conference is, for some, a shocking revelation and an about-face from their previous actions.

However, there is, perhaps, no place to go.

Those at Clemson and FSU have felt that, if they are legally unhinged from the ACC’s grant of rights, there will be takers. But it is unlikely that any SEC or Big Ten school will agree to accept a reduction in their TV distribution to add any school. For the SEC, that is especially so given its footprint: the league already owns a foothold in South Carolina and in Florida.

In order for the Big Ten and SEC to expand, they’d likely need more money from their television partners — a lot more money (more than $100 million a year). That’s primarily Fox for the Big Ten and ESPN for the SEC.

As reported by Yahoo Sports in September, Clemson and FSU introduced a new revenue structure proposal during negotiations with the ACC that creates a separate pot of cash to be divided based on media value metrics and other football performance marks. The proposal was introduced to ACC university presidents and is one of a possible two-part solution to a settlement.

The schools are proposing changes to the conference’s grant-of-rights agreement — at the center of both lawsuits — such as possibly reducing the penalty fees tethered to the contract or an amendment in its length.

The unequal revenue structure is not a wholly new idea. Last year, FSU athletic director Michael Alford and Seminole board members suggested that the conference distribution formula for its television money — now evenly distributed — be instead tied to viewership and other media value data.

The new revenue proposal is seen as a solution — perhaps maybe temporarily — to avoid any court decision over the validity of the grant of rights. A potential loss in court that immediately opens the grant of rights could have a catastrophic impact not only on the ACC but other conferences, setting a precedent for all schools to break what were at first thought to be binding agreements.

The changes would come after the conference approved last year what it describes as a “success initiative,” a system that distributes more revenue to teams that excel in football and basketball. The initiative rewards high-performing football programs as much as $25 million if all success benchmarks are met, such as qualifying for a bowl game, finishing inside the top 25 and advancing through the College Football Playoff.

The initiative is an attempt for commissioner Jim Phillips and league administrators to reward winning in a way that helps close the financial gap between the ACC and the two richest conferences: the SEC and Big Ten. The gaps in television distribution — a primary reason for FSU and Clemson’s attempted exits — could soar to more than $30 million per school within the next two years.