ACC’s Phillips touts financial gains, plans to fight lawsuits in strong position for future
CHARLOTTE, North Carolina — Commissioner Jim Phillips believes strongly in the future of the Atlantic Coast Conference amid the uncertainty of realignment and sweeping changes to the model of college sports itself.
He was also ready to explain to everyone why, as the league opened its preseason football media days on Monday.
Trading his usually reserved comments for a more assertive message, Phillips touted the gains made years of work to improve the ACC’s financial situationHe vowed the league will fight “as long as it takes” in the lawsuits against Florida State and Clemson as those member schools challenge the league’s ability to charge hundreds of millions of dollars to leave the conference. And he came with specifics, from dollar amounts to recent national title tallies.
“This league is better than the narrative it’s being told right now because people want to talk about what could happen rather than what is happening,” Phillips said in an interview with The Associated Press.
The league opened its four-day “ACC Kickoff” event Monday in an expanded format after the addition of California and Stanford from the Pac-12, and SMU from the American Athletic Conference. Phillips, who is preparing for his fourth full season at the ACC’s helm, lifted the lid a bit on a league he described as “aggressive” in its fight against a growing revenue gap with its peers in the Big Ten and Southeastern Conference.
“Our modus operandi has not been to do this publicly,” Phillips told the AP. “Our goal is to do it internally, to be aggressive and look at every avenue that we have to grow our revenue. … That’s going to continue, not just what we’ve done and what we’re going to do in the future.”
For example, Phillips said adding three new schools to the league would create $600 million in additional revenue from the ACC’s current ESPN deal that runs through 2036. Additionally, a league that has long relied on fair distributions sees Cal and Stanford receive reduced payments (roughly 30%) over the first seven seasons before gradually increasing those amounts to a full share in the 10th season, while SMU forgoes nine years of television money.
Also there are Launching a success-based incentive model this season Schools could keep more money based on their own playoff success instead of sending it to conference coffers to be distributed evenly. Phillips said that could amount to $20 million to $25 million in additional payments to schools based on their success in the College Football Playoff, bowl games and the NCAA men’s basketball tournament.
Add to that corporate partnerships and sponsorships of marquee events like the mega men’s basketball tournament earlier this year, and Phillips points to multiple revenue streams to boost its bottom line.
“I think we’ve done a really good job in a difficult situation to generate the revenue that we’ve generated, new revenue,” Phillips said. “To also be able to unanimously agree to disproportionate revenue for the first time with the success initiative and (expansion), that requires alignment. That’s not easy to do.”
“The idea is to continue this momentum. So we have to be creative.”
The good news is that these moves come amid record revenue years, even as the ACC lags behind what many now consider a Power Two with the Big Ten and SEC.
According to tax documents, the ACC distributed an average of $44.8 million to its 14 football members (Notre Dame receives a partial share as an independent football association) and $706.6 million in total revenue for the 2022-23 season. That represents a 13.6% increase in payments from the previous year, with Phillips saying increases to the league’s television contract accounted for about two-thirds of that increase.
Additionally, television revenues increased from approximately $288.6 million in fiscal year 2018-19, prior to the launch of the ACC Network, to $481.7 million for 2022-23, an increase of 66.9%.
Overall, the ACC ranked third behind the Big Ten ($879.9 million in revenue, $60.3 million in average payouts) and SEC ($852.6 million, $51.3 million) in the most recent filings, and ahead of the smaller Big 12 ($510.7 million, $44.2 million). Of that quartet, the SEC (six), Big Ten (two) and ACC (two) have won a combined 10 CFP championships leading up to its expansion to a 12-team field this season.
“All the data points to this being a top-3 conference,” SMU coach Rhett Lashlee said of the Mustangs’ new home.
And those revenue figures don’t take into account the recent wave of realignment that tore the Pac-12 apart and scattered its pieces across the ACC, Big Ten and Big 12, as well as sending the Big 12’s two major football brands (Texas and Oklahoma) to the SEC.
However, Phillips knows the league faces challenges other than money.
He called the lawsuits filed by FSU And Clemson “extremely damaging, disruptive and harmful” at its annual forum. Specifically, the schools are challenging the league’s media rights agreement, which gives the ACC control over the media rights of any school that attempts to leave during the term of its ESPN contract. The league’s schools signed the agreement in the run-up to the 2019 launch of the ACC Network.
The league has also sued those schools to enforce the agreement in a legal dispute that has no end in sight and likely leaves everyone in a rut.
“I can say that we will fight to protect the ACC and our members for as long as it takes,” Phillips said emphatically at the forum.
Asked later about his comments, Phillips told the AP: “It’s important that our members know, and the country knows, where we stand.”
Still, there was some discomfort seeing Florida State among the schools featured after Phillips’ forum. For Seminoles coach Mike Norvell, there wasn’t much to talk about other than trying to win a second straight title in a league FSU is also looking to leave.
“Life is full of distractions,” Norvell said. “Ultimately, you stay focused on the things that are in front of you and, ultimately, the things that you can control. I’m fortunate to have the responsibility to help lead this team and that’s where I’m going to focus.”
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