Pac-12 chaos: Legal filings could bring board action to a halt, but answers needed on employee retention plan

Someone has to produce the games that generate $400 million in revenue

As if the impending departure of ten schools and a growing list of legal disputes weren’t enough, the Pac-12 is facing a significant operational challenge.

Around $400 million in media rights revenue is at stake.

During the 2023-24 sports season, the Pac-12 Networks will produce approximately 120 football and men’s basketball games for ESPN and Fox, as well as another 850 live events for the Pac-12 Networks’ distribution partners.

Although the technology used to broadcast events is excellent, the conference requires actual humans to handle operations and production. And many of those people are looking for work as the Pac-12’s final season begins.

According to a source familiar with the situation, conference executives are developing two plans to navigate the next nine months:

— A plan for determining which services should be maintained as is, downsized, or eliminated.

— A plan for employee retention and severance to maintain the staffing required to support the athletes and produce the events that generate media revenue.

(There are approximately 50 conference employees and another 150 Pac-12 Networks employees.)

Both plans require approval from the Pac-12’s board of directors. An independent, outside firm has been retained to provide advice on the retention piece.

Which brings us to Friday’s dramatic development: Washington State and Oregon State are suing the conference and commissioner George Kliavkoff to determine the makeup of the board and to prevent outbound schools from voting until the composition of the board is determined.

The 10 departing presidents and chancellors, according to WSU and OSU, have relinquished their voting rights and decision-making authority.

This authority includes the ability to spend money.

What is included in the power of the purse? The employee retention plan and the scope-of-services plans, you guessed it.

Kliavkoff, whose position is not included in the retention plan, attempted to schedule a board meeting for the middle of September late last month, which triggered legal action.

According to legal filings in Whitman County (Wash.) Superior Court, the agenda was designed to include discussion of “matters related to the departing members, proposed amendments to the Bylaws, a proposed conflicts-of-interest plan for Pac-12 members, and an employee compensation and retention plan for the Commissioner and other Pac-12 employees.”

However, WSU president Kirk Schulz, chair of the CEO Group, declined to call a full board meeting because he believes the Cougars and Beavers are the board.

When Kliavkoff scheduled the meeting anyway, the Cougars and Beavers took the conference to court to prevent outbound members from voting on governance issues. After all, the ten departing presidents could form a bloc that controls the conference’s future and the distribution of tens of millions of dollars in assets.

According to the source, the only items scheduled for voting at the board meeting were the retention-and-severance plan and the scope-of-services plan, who added, “There was no intent to call a vote on governance.”

Schulz, did you believe that? He stated the following in a court declaration obtained by the Hotline:

“I understand from Oregon State University representatives that on September 5, 2023, Scott Petersmeyer, the Pac-12 Conference’s general counsel, advised that, despite Mr. Kliavkoff’s initial vague communication, the Pac-12 Conference does consider the September 13, 2023, meeting to be a formal meeting of the Pac-12 Board of Directors… and further that the Pac-12 Conference anticipated voting on certain matters including the retention plan and a ‘pledge’.”

That’s the vote the Cougars and Beavers are attempting to avoid: the “go-forward governance” vote, which Schulz believes will cause “irreparable harm” to WSU and OSU.

Furthermore, the legal action could have been taken to avoid setting a precedent. If the full board votes on an employee retention plan, it appears that the full board will vote on everything, including the issues that are most important to WSU and OSU: conference governance and asset distribution.

If the temporary restraining order is granted — a hearing is scheduled for Monday in Whitman County — it could be weeks before the board can vote in any form.

The conference must find a solution that allows for the approval of the scope of services and employee retention and severance plans.

The legal action may halt the board’s operations, but it will not prevent key employees from looking for work.