The ACC lawsuit was actually a cluster of overlapping cases filed between December 2023 and March 2024 in which Florida State and Clemson tried to break the Atlantic Coast Conference’s exit fees and media rights agreement, and the ACC countersued to enforce them. All of it ended in a March 2025 settlement that kept both schools in the conference for now but rewrote the terms of leaving: departing members will owe a declining flat fee starting at $165 million and dropping to $75 million by 2030-31, and they get to walk out with their own media rights instead of forfeiting them through 2036.
What FSU and Clemson Were Actually Fighting
The problem for both schools was a document called the grant of rights. When the ACC extended its media deal with ESPN through 2036, member schools signed over their television rights to the conference for the life of the contract. Leaving meant paying a withdrawal fee of roughly three times the ACC’s annual operating budget — somewhere around $130 million to $140 million — and also giving up media rights revenue until 2036. Florida State put the all-in cost of departure at about $572 million.1
That price tag mattered because ACC payouts had fallen well behind the SEC and Big Ten, whose members were pulling in tens of millions more each year. FSU Board of Trustees Chairman Peter Collins said the school had tried to work with the ACC on a better revenue-sharing arrangement and gotten nowhere. The immediate trigger came in December 2023, when FSU finished the regular season undefeated and was left out of the College Football Playoff. FSU athletic director Michael Alford said the lawsuit was necessary because of the “unwillingness by the ACC and some of our fellow conference members to seriously consider remedies.”
Clemson’s grievances tracked FSU’s. Its complaint, filed March 19, 2024 in Pickens County, South Carolina, asked a court to declare the withdrawal fee unconscionable and to read the grant of rights narrowly, as conveying only the media rights needed to satisfy ESPN while Clemson remained a member, not an irrevocable transfer through 2036.
Three States, Four Lawsuits
The litigation moved fast and got messy. On December 21, 2023, the ACC filed first in Mecklenburg County, North Carolina, seeking a declaratory judgment that its exit fees and grant of rights were enforceable. FSU sued the next day in Leon County, Florida, alleging unreasonable restraint of trade, breach of contract, breach of fiduciary duty, and violations of Florida public policy, and calling the penalties “grossly excessive” and “monstrously harsh, shocking to the conscience.” When Clemson sued in South Carolina in March 2024, the ACC filed a countersuit against Clemson in North Carolina the following day.
Two competing rulings shaped the middle of the case. In North Carolina, Chief Business Court Judge Louis A. Bledsoe III refused to dismiss or stay the ACC’s case, finding that the conference is headquartered in the state and the contracts were executed under North Carolina law. In Florida, Circuit Judge John C. Cooper refused to stay FSU’s case, calling the ACC’s rush to file in North Carolina “forum shopping.” Cooper: “There’s only one reason one would engage in forum shopping. That’s because you think the forum you just shopped is better than the other place.” Both cases moved forward in parallel, and by late 2024 the North Carolina Supreme Court had scheduled April 2025 oral arguments on the sovereign immunity questions raised by FSU as a public university being sued out of state.
Those arguments never happened.
The March 2025 Settlement
On March 4, 2025, the ACC, Clemson, and Florida State announced they had resolved every pending case. Both university boards signed off the same day. The final agreement was signed by every ACC school in May, and on June 2, 2025 the parties filed to dismiss all the litigation.
The settlement did two things at once: it replaced the old exit structure with a schedule of declining flat fees, and it let departing schools keep their own media rights on the way out. That second piece was the surprise. North Carolina attorney David McKenzie compared it to a record label letting an artist buy back their masters at a fixed price.
The new exit fees:
- 2025-26: $165 million
- 2026-27: $147 million
- 2027-28: $129 million
- 2028-29: $111 million
- 2029-30: $93 million
- 2030-31 through 2036: $75 million flat
The conference also rewrote how it splits money. Forty percent of multimedia contract revenue is still divided evenly among members. The other 60 percent is distributed by a five-year weighted average of television viewership, with football counting for 75 percent and men’s basketball for 25 percent. Virginia Tech’s athletic department projected payouts under the new model ranging from roughly $35 million to $65 million per school, depending on how well their games draw on ABC and ESPN.
A separate “success initiative” pays for on-field performance. A College Football Playoff appearance is worth $4 million, with more for advancing. Bowl eligibility and an AP Top 25 football finish are each worth $1.8 million, and there are smaller amounts tied to NCAA basketball tournament games. In 2024-25, Clemson collected $7.95 million under these metrics. FSU, coming off a bad football season, got $120,000.
Clemson and FSU also secured a governance concession: any future changes to the ACC’s payout structure require approval from both schools through 2036.
The Football-Only Exit Clause
The 68-page settlement contains a provision called an “option of limited withdrawal” that lets six or more ACC schools leave the conference in a single sport — football most obviously — to join a “single sport league, conference or other association” while remaining ACC members for everything else. Schools using it would owe $75 million or 50 percent of the then-current standard withdrawal fee, whichever is greater.
The clause is a framework, not a plan. Assembling a six-school single-sport league is logistically difficult, but the option now exists on paper for schools like Clemson, FSU, Miami, and North Carolina, which it did not before the settlement.
Where the ACC Stands Financially
The ACC reported record revenue of $826.5 million for fiscal year 2024-25, up 16 percent, driven by $588.8 million in television rights and roughly $102 million in new money from the additions of Cal, Stanford, and SMU. The conference distributed $736.6 million to its 18 schools. Holdover football-playing members averaged $47.1 million; Clemson led at $55.1 million.
The gap the lawsuit was meant to close is still wide. The Big Ten reported $1.47 billion in revenue for the same period, with most members getting at least $76 million. The SEC reported $1.11 billion, with minimum distributions of $70.3 million. New ACC members took less to get in: SMU received zero percent of media rights payouts early on and took home $17 million in its first year, while Cal and Stanford accepted partial shares of $22.9 million and $19.5 million, respectively.
The ACC spent at least $8.3 million on legal fees in 2024-25, down from $12.3 million the year before. Clemson paid its outside counsel $2.86 million for more than 4,200 hours of work.
Why 2030-31 Matters
McKenzie described what the settlement really did: it converted ACC membership “from a binding obligation to an annual economic decision.” When the exit fee bottoms out at $75 million in 2030-31, major television contracts for the SEC and Big Ten are expected to be up for renegotiation. That timing is not accidental.
Reports have already placed the University of North Carolina at the “front of the pack” among schools weighing a move, alongside Clemson. UNC has spent nearly $650,000 over three years on legal and advisory services to study its options. Clemson athletic director Graham Neff said the settlement gives Clemson “flexibility” and estimated the new payout structure could bring in an additional $120 million over six years.
FSU Board Chair Peter Collins said the deal “successfully addresses every issue we passionately advocated for.” ACC Commissioner Jim Phillips has called it a foundation for stability. The ESPN deal runs through 2036. The 2030-31 window will show which of them was right.