The Atlantic Coast Conference (ACC) is on the verge of resolving a contentious legal dispute with Clemson University and Florida State University. According to sources close to the situation, a proposed settlement has been drafted that would not only end the ongoing litigation but also introduce a new revenue-distribution model for the conference. This agreement must be formally approved by all three parties involved. Meetings have been scheduled for Tuesday at both universities, where trustees will discuss the terms of the settlement. The ACC's Board of Directors, comprising university presidents and chancellors, will also convene via a teleconference to sign off on the deal during a pre-planned meeting.

This potential resolution marks a significant step toward stabilizing the ACC under Commissioner Jim Phillips' leadership. Over the past four years, Phillips has worked tirelessly to enhance the league's financial standing amidst growing competition from other conferences like the Big Ten and Southeastern Conference (SEC). One of the key changes in the proposed settlement involves incorporating viewership ratings into the revenue-sharing formula among member schools. Schools generating higher television interest could see an increase in payouts, potentially reaching up to $15 million for top-performing institutions. Conversely, some schools might experience a decrease of approximately $7 million.

The timing of this settlement is noteworthy as it follows ESPN's recent decision to extend its media rights agreement with the ACC through 2036. This extension aligns with another contract covering the ACC Network for the same period. Additionally, the settlement coincides with the first year of a "success initiative" championed by Phillips. This initiative allows schools to retain more revenue generated from their own postseason achievements, potentially amounting to about $25 million annually. The ACC now comprises 18 member schools, including 17 in football, following realignment that added Cal, Stanford, and SMU.

The legal battles between FSU and Clemson with the ACC began when these institutions challenged the league's ability to impose penalties on schools attempting to leave the conference. FSU initiated a lawsuit in December 2023, followed by Clemson in March 2024. In response, the ACC filed counter-suits against both universities. Discussions to revise the revenue distribution model had been underway since last fall, aiming to address these disputes. If finalized, this settlement will bring much-needed stability to the ACC and set a precedent for future negotiations within collegiate sports leagues.