Sources: ACC ‘Getting Closer’ to Adding Stanford, Cal, SMU

The league stands to earn substantial additional revenue in its media rights deal if it brings in the three schools.

The addition of Stanford, California and SMU to the ACC is gaining momentum after talks seemed to have stalled late last week, sources tell Sports Illustrated. “We’re getting closer, but it’s not done,” a source says. “There’s a lot to be worked out.” There is still no formal vote by the presidents of the ACC schools currently scheduled on the matter, but talks are progressing and were described as “positive.”

In order for Cal, SMU, and Stanford to join the league—and it is expected to be all three or none of them—12 of 15 schools must approve the addition. (Notre Dame, a football independent, is a voting member.) It’s expected that if the vote passes that they would join as members in all sports and would sign the league’s grant of rights agreement, which runs through 2036.

Two weeks ago, SI reported that Florida State, Clemson, North Carolina, and NC State were “no” votes with multiple other schools described as soft “yes” votes. According to multiple sources, no formal vote is expected to be taken unless it is certain that the vote will pass. But as one source put it: “you just need one more vote.” Both UNC and NC State were considered somewhat bound together due to their shared board of regents presiding over the North Carolina university system, and the amicable relationship between administrators. Clemson and Florida State were jointly against any expansions that didn’t materially change the revenue model, but this week there has been fresh discussion while reviewing the updated revenue models, sources say.

The ACC stands to earn over $70 million in additional revenue from ESPN by adding the three schools, money that kicks in automatically due to pro-rata increases already agreed to in the network’s contract with the league, according to a person familiar with the figures. How that amount is distributed has been the main sticking point throughout, and the focus of much of the recent conversations.

Stanford and Cal would come in earning a reduced share of the ACC’s annual roughly $35-40 million average total distribution—perhaps as little as 25% initially, according to sources—escalating over multiple years, according to a source. SMU, according to sources, would forego their share of the media distribution portion of that pot for multiple years and essentially come into the league earning only from non-media rights distributions such as bowl distribution payouts, College Football Playoff distributions and NCAA tournament units. The money all three new entrants would be forfeiting would then go into a pool to be doled out as part of a so-called “success initiative” that will distribute payouts to all ACC schools based on teams’ performance in postseason play in revenue sports.

For Stanford and Cal, the move to the ACC would provide a suitable home for many of their high level Olympic sports. There was significant concern about the competition level in the American Athletic Conference and Mountain West. For the ACC, this could be viewed as less about adding Stanford and Cal as it is buying Clemson and Florida State, both of which have been saber rattling privately and publicly about how far behind they’ve fallen off their in-state peers in other leagues. 

For ESPN, this lets the network add West Coast inventory in late-night East Coast time slots, which it lacked thanks to the dissolution of the Pac-12. Oregon and Washington went to the Big Ten, which has a media deal with Fox, NBC, and CBS. Utah, BYU, Arizona, Arizona State and Colorado’s Big 12 move would give ESPN some inventory, but they share rights with Fox. ESPN is the ACC’s sole media partner and operates the conference’s television network.