ACC sets revenue record — again — despite turmoil, lawsuits surrounding conference

The ACC generated a record amount of revenue, again, during the 2022-23 fiscal year, despite the conference’s ominous circumstances and the continued narrative that it is fighting for its long term survival. If anything, the league’s latest tax return, released Thursday, suggests the conference won’t have trouble funding its legal defense against Clemson and Florida State.

Both of those schools have sued the ACC, and are seeking an escape from the league’s Grant of Rights agreement. The conference, meanwhile, continues to set revenue records. It reported total revenue of $706.6 million last year — an increase of about $90 million from the 2021-22 fiscal year. The league paid out an average of $44.8 million to its 14 full-time members.

The 2022-23 fiscal year represented a couple of milestones for the ACC. It was the first time the conference generated more than $700 million. It was also the first time the conference distributed an annual full-share payout of more than $40 million to member schools. The problem, for the league, is that its two wealthiest rivals — the Big Ten and SEC — surpassed those milestones years ago.

Mid-to-late May has become something of “990 season” in college athletics — the time of year when conferences release their tax forms from the previous fiscal year. The numbers routinely reflect the obscene financial growth throughout major college athletics. It has been no different in the ACC, despite the growing public perception that the league faces a money problem.

ACC tries to keep up

It is not so much a money problem as it is a problem of having enough money — as judged by conference commissioners and everyone from school presidents and administrators to boosters and fans. And if there’s one thing college sports has underscored again and again it’s that more is never enough. The ACC has become Exhibit A of that reality, amid the lawsuits threatening its future.

ACC revenue has increased more than 50% over the past five years. It’s up more than 200% over the past 10 years, more than 330% over the past 15 years and almost 550% over the past 20. And yet in their lawsuits, both Florida State and Clemson have essentially accused the conference of financial mismanagement; of failing its members as television money has become more and more lucrative.

Indeed, the ACC has fallen behind in a financial sense. The SEC during the 2022-23 fiscal year reported $852.6 million in revenue, according to tax documents it released earlier this year. The Big Ten reported $880 million in revenue, Sportico reported earlier this week. Both of those conferences, bolstered by strong football followings and mostly made up of large schools with robust alumni bases, are soon likely to cross the billion-dollar mark in revenue.

On a per-member distribution basis, the Big Ten last year paid out an average of more than $60 million to its member schools. The SEC last year paid more than $50 million to its members. As recently as 2006, the ACC paid out more than both the Big Ten and SEC — but that was the year before the Big Ten Network launched, and before the SEC signed a landmark TV deal before the 2009 football season.

Conference payouts to schools represent a significant chunk of individual athletic department budgets, but league TV money is hardly the only source of income for schools. They also make money from booster contributions, ticket and merchandise sales and individual multimedia deals (like radio broadcast contracts, for instance), among other sources.

The TV revenue factor

Television money, though, has become a singular point of focus, with everyone from university trustees to message-board-addled fans obsessing over the dollars in recent years. The ACC won nine NCAA championships during the 2022-23 academic year, and has won 21 over the past two and a half years, and yet because of TV money the conference has continued to fight a narrative that it’s in decline.

The Big Ten and SEC will continue to distance themselves, in a financial sense, given both leagues will soon enter into new television rights agreements that will make them even wealthier. The ACC’s contract with ESPN, meanwhile, runs through 2036. The length of that deal has caused consternation, but every league member signed off on it — and also agreed to the Grant of Rights.

At the time the ACC signed that deal, in 2016, a long term agreement with ESPN was seen as a stabilizing move. The length of the contract also incentivized ESPN to agree to launch the ACC Network, which came on the air in 2019.

Florida State in its legal filings has claimed that the ACC’s TV deal actually expires in 2027, with ESPN needing to agree to an extension. Jim Phillips, the ACC Commissioner, refuted that last week during the ACC’s annual spring meetings.

“The contract runs through ‘36,” Phillips said, “and we’re working internally with them on a piece of the contract. I can’t go into the details on it, but the partnership’s not going away or going to be affected in a negative light at all, or a negative way at all.”

Amid growth, a fight for survival

This year, the release of conference revenue figures comes amid a heightened focus — even more than usual — on money in college sports. The NCAA and the nation’s four most powerful college athletics conferences, along with the remnants of the Pac-12, agreed to settle three antitrust cases against the NCAA. Among those cases, the most commonly-known is House vs. NCAA.

The settlement for the first time will allow schools to offer direct payment to athletes. The NCAA agreed to pay more than $2.7 billion in damages to former and current athletes, according to ESPN.com, which also reported that a proposed revenue-sharing plan would allow schools to share about $20 million annually with athletes.

Many of the details of how the settlement will work remain unclear. There are Title IX implications to work through, for one. And it’s unknown how much certain athletes in certain sports might receive, or how their compensation would be calculated. College sports leaders have also remained adamant that athletes not be considered employees.

Still, the settlement has only fueled the money-driven hysteria that surrounds college athletics. Already, there are cries of needing more, or not having enough. Meanwhile, conference 990s tell a story of an industry flush with more and more cash — even in the beleaguered ACC.

The conference’s 14.5% year-to-year revenue growth was its second-largest of the past 10 years. The league’s TV revenue increased 9%, to $481.7 million. The league spent at least $3.6 million on legal services, a figure that will undoubtedly rise this year. Phillips, with a total compensation of $2.8 million, was the league’s highest-paid employee.

The ACC also paid John Swofford, its former commissioner who retired in June 2021, $2.6 million. Five other current employees received at least $300,000 in compensation, including base salary and bonuses. None of the numbers suggested an organization in any kind of financial plight, and yet its fight for survival, the fight to generate more and more, continues.