Pac-12 legal affairs: What the court victory for OSU and WSU means for the future of the conference and the outbound schools
If the Cougars and Beavers attempt to hoard the cash, another legal battle could ensue
The Pac-12’s most anticipated matchup gained significant clarity Tuesday evening when a superior court judge granted Washington State and Oregon State legal control of the conference.
However, the possibility of overtime exists.
The defendants intend to appeal Whitman County (Wash.) Superior Court Judge Gary Libey’s decision to grant a preliminary injunction, which would have left WSU and OSU as the Pac-12’s sole voting members of the governing board.
As a result, the fate of hundreds of millions of dollars in revenue and assets will be decided by the two schools left behind in the realignment game.
However, Libey agreed to postpone his decision for the rest of the week to allow Washington to file an appeal.
It’s not over yet.
It could last weeks, if not months.
Six observations on recent developments:
- Immediately following the ruling, the defendants announced that they would appeal to the Washington Supreme Court in Olympia, where UW hopes to receive a more favorable audience.
Pullman is 15 miles from Libey’s courtroom.
Husky Stadium is an hour away from Olympia.
However, there is no guarantee that the request for an appeal will be granted — or that the case will be heard by the state’s highest court. According to a person familiar with the legal system in the Evergreen State, it could be sent to an appellate court in Spokane.
The Hotline has no idea how the appeals process will play out. But we all know this: Just as it’s better to have a call in your favor on the field before it goes to the replay booth, would you rather be the plaintiffs or the defendants at this point?
- The Hotline monitored every second of the two-and-a-half-hour hearing (via livestream) to assess the performance of the attorneys — and there were many:
— Each of the two plaintiffs was represented by its own attorney, with Eric MacMichael of Keker, Van Nest and Peters taking the lead.
— Mark Lambert represented the Pac-12 and commissioner George Kliavkoff, the named defendants in the case.
— Dan Levin, Washington’s lead attorney, also represented the nine departing out-of-state schools.
What happened to them?
With a clear, concise argument, MacMichael steamrolled his opponents. And, to be sure, he had the best material. The plaintiffs based their case on actual events, specifically the Pac-12’s decision to remove USC and UCLA from the governing board beginning in July 2022, following the announcement of their departures to the Big Ten.
(OSU and WSU have maintained throughout that the precedent established 16 months ago applies whether two or ten schools leave.)
Meanwhile, UW’s case relied on a nuanced, nearly incomprehensible reading of the bylaws to demonstrate that the schools had not relinquished their board seats.
One side focused on current events, while the other spent the afternoon debating the meaning of the phrase “notice of withdrawal.”
Libey perfectly captured the arguments when he said, “I grew up where conduct spoke louder than words.”
Meanwhile, the Pac-12’s lawyer floundered and flailed with shoddy material. We burst out laughing when he suggested that WSU and OSU would be better off with the status quo, with no board control.
His performance reflected a conference office caught in the crossfire and a commissioner with no authority or credibility after overseeing the demise of a century-old college sports institution.
- Not all ten outbound schools have approached the lawsuit in the same way. According to one source, hardliners within the group prevented the two parties from reaching an agreement through mediation.
As the proceedings began Tuesday afternoon, Libey expressed disappointment that the factions could not reach an agreement on a revenue and asset division for 2023-24 that satisfied both sides.
Perhaps his decision will persuade the hardliners to accept revenue distributions of $25 million or $30 million per campus. (According to financial data cited in court documents, full revenue shares would be $35 million.)
This would provide the plaintiffs with cash to secure their futures while also providing the defendants with operational support during their final year in the conference.
By far the most logical solution is a settlement. “This is basically a divorce hearing,” one source said. It will all come down to the alimony payment.”
It’s also worth noting that the conference does not yet have the full $420 million in revenue for 2023-24. The money is paid out on a regular basis by media partners throughout the year.
- Despite the attention paid to the conference’s revenue in 2023-24 and another $100 million (or more) in assets awaiting WSU and OSU beginning next summer, the schools are equally concerned about the size and nature of the liabilities.
Between Kliavkoff’s contract, the rent on the Pac-12 production studio in San Ramon, and potential damages in a series of lawsuits — in which the Pac-12 is the sole defendant in some and one of several defendants in others — the conference could be on the hook for tens of millions of dollars.
When do the bills have to be paid?
How much is the grand total?
How will the costs be allocated?
Libey’s decision should hasten the process of determining details and responsibilities.
- Perhaps the most important outcome of Libey’s ruling (assuming it survives the appeals process) is what it means for next year:
It brings the ‘Pac-2’ a lot closer to reality.
The Cougars and Beavers are debating whether to form a two-team conference for the 2024-25 sports season, as well as the 2025-26 season. The NCAA allows it, but the practicality is complicated. And expensive.
Creating schedules for their sports teams is at the top of the list of challenges.
If the price is right, the Mountain West schools could provide a life raft.
The specifics of the negotiations between the ‘Pac-2’ and the Mountain West are unknown. However, control of the Pac-12 board would provide the Cougars and Beavers with the resources required to align for what a source referred to as “bridge” seasons.
WSU and OSU must join a conference with at least eight other schools beginning in the fall of 2026. That conference could be a rebuilt Pac-12, the Mountain West, or a new league.
- Our final point addresses one of the first questions raised in the aftermath of Libey’s decision:
Will WSU and OSU hoard the entire $420 million in Pac-12 revenue due in 2023-24? Or will they be generous and share the funds with the outbound schools?
We doubt they have a choice.
“The bylaws require reasonable treatment,” a source explained.
Defining “reasonable” will almost certainly necessitate more billable hours, but Libey made his feelings known.
“The (preliminary injunction) is going to be modified to make sure the other 10 are still treated in a fair manner,” the judge said. “Nobody’s going to take advantage of somebody else.”
If WSU and OSU try to bulldoze their way to every last dime, they’ll end up back where they started: in court.
“The notion that (WSU and OSU) would take all the money and divide it between the two — that would put everyone right back in gridlock,” a source familiar with the matter said.
“And the hope is to get out of this gridlock.”
