(Photo credit: Jim Dedmon-Imagn Images)

The Atlantic Coast Conference's ongoing legal disputes with members Clemson and Florida State were settled on Tuesday with a resolution to implement a new revenue distribution model based on TV viewership.

The settlement keeps the ACC's 18-member league potentially intact through 2036, when the league's grant of rights contract expires. Penalties for leaving the league before 2036 are reduced significantly -- which was a motivating factor for the initial litigation from the two universities.

The ACC board of directors approved the settlement, followed by approval from the boards of trustees for Clemson and FSU. The actions led to the dropping of four lawsuits.

'Today's resolution begins the next chapter of this storied league and further solidifies the ACC as a premier conference,' ACC Commissioner Jim Phillips said in a statement. 'As we look ahead to our collective long-term future, I want to express my deepest appreciation to the ACC Board of Directors for its ongoing leadership, patience and dedication throughout this process.

'The league has competed at the highest level for more than 70 years and this new structure demonstrates the ACC embracing innovation and further incentivizing our membership based on competition and viewership results. The settlements, coupled with the ACC's continued partnership with ESPN, allow us to focus on our collective future -- including Clemson and Florida State -- united in an 18-member conference demonstrating the best in intercollegiate athletics.'

FSU first sued the league in December 2023 followed by Clemson. The ACC countersued both schools. FSU's lawsuit came after the Seminoles failed to reach the then-four-team College Football Playoff despite being undefeated, which the university blamed on the ACC.

Before the settlement, conference members could be penalized as much as $700 million to leave, according to FSU's attorneys. Under the new terms, the exit fee will be $165 million in fiscal year 2026 and decreased by $18 million per year to a floor of $75 million in 2030-31 and beyond, according to a presentation made at Clemson's board meeting, The Athletic reported.

The schools also were concerned with league revenues falling too far behind those of the SEC and Big Ten, per media reports.

The league said in Tuesday's announcement that it will build upon previously announced success or brand initiatives with a component directly focused on annual football and men's basketball viewership. Instead of equal distribution of media rights deals among its members, the league will award bonuses to the most-viewed schools in those sports based on a five-year average of TV ratings.

'This settlement allows Clemson to remain nationally competitive at the highest levels and also makes our conference stronger,' Clemson President Jim Clements said in the statement.

The ACC's revenue-sharing model aligns with a proposal FSU athletic director Michael Alford made 25 months ago.

'This is a great path forward that provides every team in the conference the opportunity to reach benchmarks for additional financial distribution,' Alford said in a statement on Tuesday. 'FSU and the ACC have benefitted from more than 30 years of partnership. This solution, forged collaboratively by FSU, Clemson, and the ACC is a testament to our ability to work together to proactively address necessary actions for future success.'

--Field Level Media