UNC's Cunningham joins call for unequal revenue distribution among ACC schools
Posted March 7, 2023 6:40 p.m. EST
Updated March 7, 2023 9:17 p.m. EST
Count North Carolina athletic director Bubba Cunningham among the ACC leaders who want to change the way the conference distributes revenue.
The ADs at Florida State and Clemson have in recent weeks called for unequal revenue distribution among the ACC's 14 football-playing schools, claiming their schools deserve a larger percentage.
"Equal distribution was very appropriate, particularly when you had eight schools in your league," Cunningham said Tuesday on 99.9 The Fan's "The OG" with Joe Ovies and Joe Giglio.
"As your league expands, the footprint expands, the number of sports that you offer differs, the overall value to the league and its media markets is different, and I think some of us are starting to suggest we need to re-examine that and take a look at where is the value and how do we distribute the money differently so that we can ensure the teams that want to invest the most, the schools that want to invest the most will be rewarded for that investment. That discussion is just beginning."
The ACC, which had eight teams through 1991, underwent several rounds of expansion since 2004 and now has 15 members, including Notre Dame, which is a member in all sports except football.
Cunningham told WRAL in October that he was part of a group tasked with studying the issue. The ACC generated a record $578 million in the 2020-21 academic year, a total boosted by Notre Dame's participation as a conference football member in 2020. The league distributed between $34.9 million (Notre Dame) and $38.1 million (Clemson), according to tax documents filed by the conference.
The ACC, however, was well behind the SEC and Big Ten in revenue and per-school distribution, a gap that will increase in future years.
"As you look at the other leagues and see the gap, it becomes critical sooner rather than later," Cunningham said.
Still no amount of uneven distribution is likely to put Florida State or Clemson at the same level as schools in the SEC or the Big Ten. Texas, through monetizing its third-tier media rights, was able to make more money than its Big 12 conference mates. That uneven distribution did not stop the Longhorns from leaving for the SEC.
Cunningham acknowledged any solution is likely to leave some and maybe all schools unhappy.
"I’m not sure you’re going to satisfy everyone with a differential payout," Cunningham said. "In fact, I’m relatively confident you’re not going to satisfy anyone. Because some aren’t going to think they have enough and others feel like they took an unnecessary haircut."
Florida State athletic director Michael Alford told the school's board of trustees that the his school will be "$30 million behind our competitors and peers across the country" each year.
"We're consistently talking to the conference, the President and I are sitting in meetings where we are making sure that they understand our value to this conference, but at the end of the day if something's not done, we can not be $30 million behind every year compared to our peers," Alford said, according to reports.
The comments set off another round of hand-wringing about the league's grant of rights agreement and its television contract with ESPN, both of which stretch to 2036.
Clemson athletic director Graham Neff told The Post and Courier that unequal distribution is a "need" for the Tigers.
"Is it time revenue distribution within conferences, or at least the ACC, is done differently?," he said. "Yeah, I’ve been very active in those conversations within the league and continue to expect to take a leadership role in our desire for that to be a changed circumstance. Urgently.”
Cunningham, too, expressed concern about the ability of North Carolina to remain competitive nationally in an era of increasing costs and uncertainty surrounding compensation for athletes.
"What we’re trying to do is raise the level, so we can maintain a competitive standard nationally," he said. "I don't believe that you have to have as much money as everyone to be competitive. You’re looking at Texas and Ohio State, $200 million budgets. We’re not going to be at $200 million, but if we get a few more million or somebody else can, then I think that’s going to make a difference in retention of coaches.
"There's no telling where the NIL is going and what other compensation models might look like as we move forward. I think all those ideas will play out in next couple of years, but you’re going to need money to finance the new economic structure for college sports."
It is not a new concern for ACC commissioner Jim Phillips, who said before the 2022 football season that the league could consider athletic success, number of sports or scholarships or academic factors in dividing revenue.
He is tasked with growing the ACC's total revenue, no matter how it is divided. The ACC announced a partnership this week with Elevate Sports Ventures to add revenue opportunities. The league recently added Ally Bank as the title sponsor of the women's basketball tournament.
"We don't have one area that kind of cures our ills, so to speak. So this thing has to be four or five areas of emphasis" Phillips told "The OG." "We have to stay at it. It's something I think about everyday. It just is because I understand it. I understand where we are compared to others."
