National

Will the ACC hold together or crumble apart like the Pac-12? 'They're just watching us bleed out'

AMELIA ISLAND, Fla. — Each year in the middle of May, conference administrators and coaches of the Atlantic Coast Conference gather for meetings at the Ritz-Carlton on a marshy barrier island along the northeast Florida coast.

In some regards, the ACC is like this resort’s lavish façade itself: a projection of perfection, a shining example of a collegiate conference of old. It is a collection of mostly high-academic institutions with broad-based, successful athletic programs led by a commissioner who exudes confidence, a man carrying the banner of purity and decency in a money-hungry, dollar-chasing industry quickly evolving into a semi-professional business.

But within this oceanside luxury resort, among its carpeted hallways, inside its spacious convention space and around its marbled lobby bar, there exists grime. There is unsaid animosity here, uncomfortable squirming and awkward moments. There are eye-rolls, glares and even the occasional public barb.

Despite the jovial and optimistic nature of its leader, commissioner Jim Phillips, and regardless of its Olympic sports trophies and lofty graduate rates, the ACC is a fractured family — one growing more fragmented with each passing day.

Two of its most unruly children, Florida State and Clemson, are causing disruption as they work to leave the family behind. A half-dozen of their siblings wish they had the resources and wherewithal to join them. And another group, clinging to their morals and missions, are content, nestled quietly in their beds, avoiding trouble at all costs, an angry fist raised toward their misbehaving brethren.

Dad is trying his best to hold intact the group, steer the ship into smooth waters, salvage his family and protect it from the same affliction suffered by their cross-country neighbor: the Pac-12.

Back at one of their campuses, trouble brews. A third child grows restless.

On Monday, the opening day of meetings, a handful of North Carolina Board of Trustees members expressed concern over UNC athletic department’s financial situation, approved an audit of the department’s budget and lobbed criticism toward longtime athletic director Bubba Cunningham, one of the most respected administrators in college sports who was noticeably absent during Wednesday’s final day of meetings (presumably, returning to Chapel Hill to put out proverbial fires).

One of the trustees at least voiced something else: a not-so-subtle suggestion that the school should pursue an exit from the conference.

"I am advocating for that," Dave Boliek told WRAL in North Carolina. "That's what we need to do. We need to do everything we can to get there. Or the alternative is the ACC is going to have to reconstruct itself. I think all options are on the table."

Florida State and Clemson are further along the exit path, each having filed suit in an effort to leave the league over the revenue gap between their current conference and the ones in which they aspire to join: the SEC and Big Ten.

There’s no turning back now. The only question: How much will they owe the ACC in any exit settlement? Any negotiation probably starts at about $550 million, the suggested tab from the league of exit fee plus the cost of breaking the grant of rights.

Meanwhile, all parties this week moved about the Ritz-Carlton oftentimes as if things are rosy. In a news conference Wednesday at the end of meetings, Phillips described the legal challenges from his most unruly members as “difficult, disruptive and harmful,” strong words from a man who mostly speaks in hushed tones. “But that’s the world we live in,” he continued. “We’ll let the legal folks handle it. It hasn’t changed one iota how we’ve interacted with them, treated them and treated the student-athletes. It shouldn’t.”

An eternal optimist, Phillips expressed hope that the situation resolves itself with a “really good ending,” that FSU and Clemson might turn the car around, pull back in the garage and settle back into their beds.

The chances of such a move feel fleeting, the hope dwindling. Every new change within college athletics exacerbates the revenue gap between the SEC and Big Ten and everyone else.

Take for instance, the new CFP distribution model, where the SEC and Big Ten each get about 29% of the annual distribution. The ACC and Big 12 will receive around 17% and 15%. Or how about the new television contracts, where the SEC and Big Ten schools will soon earn in excess of $70 million annually with the ACC at least $20 million behind.

“With the CFP numbers, we’re now talking about being $40 million behind every year,” said Florida State athletic director Michael Alford.

The latest, impending change in college sports is the biggest in perhaps its more than 100 year history: a costly new model permitting direct revenue sharing with athletes as part of a settlement of three consolidated antitrust cases.

One ACC school is budgeting to spend an additional $30 million annually in a combination of revenue sharing for current athletes, back damages to former athletes and an expansion of scholarships. Phillips described the impending settlement as a “seismic shift” in the industry and a decision that should be made jointly among the power conferences and NCAA, with each individual board expected to potentially authorize the adoption of the settlement next week.

For the ACC, the new model’s stiff tab is made more difficult to swallow when the competition is generating millions more.

But there is help on the way. In an effort to appease its football powers and reward their success, the ACC enacted last year their own uneven distribution of wealth. The league is using its CFP monies, normally evenly distributed, to create what it terms a “success initiative” fund that pays units to individual schools based on reaching benchmarks, according to those familiar with the model: (1) qualifying for a bowl game, (2) finishing in the top 25 and (3) participating and advancing in the CFP.

The value of a unit is estimated to be $2-4 million, depending on the overall conference CFP distribution. An ACC team can earn as much as $25 million if it advances to the championship game.

“We’re not standing still. We’re trying to address that gap,” Phillips said.

The initiative will help “mitigate the gap,” said Miami athletic director Dan Radakovich. While more money doesn’t always lead to more success, there is a correlation between success and resources, Cunningham said. And in the new era of college athletics, “it’s incumbent to be successful in football,” he added.

Football is the driving force behind, like all leagues, the ACC’s television contract — the long-discussed ESPN deal that has triggered FSU and Clemson’s intention to exit. The contract, paying a fraction of the SEC and Big Ten’s deals, extends through 2036 — maybe.

There are largely two ways that ESPN itself could set fire to the contract: If the ACC drops below the requisite 15-member threshold; or if ESPN elects next February to decline to opt into the final nine years of the deal.

The league and its TV partner are in active negotiations over what Phillips did confirm is a “look-in” provision.

“We are working internally with them on a piece of the contract. The partnership is not going away or being affected in a negative light,” Phillips said.

Could Florida State and Clemson’s inevitable exit impact the deal? Sure.

But where exactly will they go? And whom — North Carolina? — will follow them out the door?

These are questions without easy answers.

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. Also, the SEC programs in those states would likely make a fuss, if they haven’t already, over inviting into the league their arch-rivals (See: Texas A&M’s reaction to the SEC inviting Texas).

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. There is one problem with this.

“There isn’t as much money in the market as there once was,” said a conference official with knowledge of the networks’ dealings.

And what of the Big 12? The country’s most valuable basketball conference has an aggressive commissioner, Brett Yormark, whose league’s poaching of four schools contributed to the Pac-12’s collapse. However, Big 12 programs already are seeing a reduction in distribution from that expansion. They won’t withstand more. Can Yormark maneuver a way to gather more funds? Is there appetite for further expansion East?

There is another landing spot for FSU and Clemson: a new, restructured ACC — a similar plan discussed among seven schools last spring.

The idea back then: 8-10 schools vote to break away from the league, end the grant of rights with a majority decision and reform with a TV deal that is just as valuable but with fewer mouths to feed, so to speak.

Administrators from seven schools — FSU, Clemson, UNC, Miami, NC State, Virginia and Virginia Tech — met multiple times last spring over the matter in what was described as a serious endeavor.

It fizzled over legal fears, mostly from university presidents and counsels.

“Now look,” said one administrator. “It would have been the smart thing to do. The SEC and Big Ten have cut us open and they’re just watching us bleed out.”

And, so, what now? On Thursday, the UNC Board of Trustees gathers again and Cunningham is expected to appear before them.

Will another child of this fractured family be on the move out the exit door?

Inside the Ritz-Carlton, a beaming Phillips continues to exude hope.

“You always stay optimistic,” he said. You have to.”

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