You figured the existential battle between the Pac-12 and Mountain West would eventually wind up in court, and it has.
The Pac-12 filed a civil complaint in a Northern California federal court Tuesday morning, asking that $55 million in “poaching” fees for plucking San Diego State and four other schools from the Mountain West be voided.
The fees, which start at $10 million and increase for each additional school, were part of a 2024 football scheduling agreement that gave Pac-12 remnants Oregon State and Washington State six games each against the Mountain West for $14 million. The ancillary withdrawal fees for inviting Mountain West before Aug. 1, 2027, were included, the agreement says, to offset “unique economic damages and losses which would be impracticable or extremely difficult to quantify.”
The agreement adds: “The parties acknowledge and agree that the (fees) are not penalties and are instead fair, reasonable and appropriate approximations of the losses that MWC may incur as a result of MWC’s loss of any MWC member institution to Pac-12.”
It was signed last year by then-Pac-12 commissioner George Kliavkoff along with Oregon State’s president and Washington State’s vice president for finance and istration.
The Pac-12’s claim now?
“The MWC imposed this Poaching Penalty,” the legal complaint says, “at a time when the Pac-12 was desperate to schedule football games for its two remaining and had little leverage to reject this naked restraint on competition. But that does not make the Poaching Penalty any less illegal, and the Pac-12 is asking the Court to declare this provision invalid and unenforceable.”
The Mountain West’s counter: You negotiated it, your attorneys vetted it, you signed it.
“The Pac-12 Conference is challenging a contractual provision that it expressly agreed to and acknowledged was essential to the Mountain West Conference’s willingness to enter into a scheduling agreement, all while advised by sophisticated legal counsel,” commissioner Gloria Nevarez said in a statement Tuesday afternoon. “The provision was put in place to protect the Mountain West Conference from this exact scenario.”
When the Pac-12 became a Pac-2, Oregon State and Washington State were granted a two-year grace period to meet the minimum of eight for inclusion in the lucrative College Football Playoff, meaning they must add six schools by the 2026-27 academic year.
It added four from the Mountain West — SDSU, Boise State, Colorado State and Fresno State — on Sept. 12 and a fifth Monday in Utah State, also from the Mountain West, after its courtship of four American Athletic Conference schools was spurned. That makes it a Pac-7.
The Mountain West circled the wagons, offering financial incentives for the remaining eight to pledge their allegiance through 2032 based on the anticipated windfall from the poaching provision plus exit fees estimated at upward of $18 million per defector. That’s a total of roughly $150 million, with the Mountain West dangling a bigger slice of pie in front of more valuable like Air Force and UNLV.
Seven of the eight signed a memorandum of understanding Monday, but UNLV claims that was based on an eight-team conference. With Utah State leaving, the Mountain West is now down to seven football (including Hawaii, which plays the rest of its sports in the Big West), cracking a legal door for the Rebels to reconsider.
Tuesday’s legal complaint attacks the validity of the $55 million in poaching fees, which would climb to $67.5 million should UNLV leave as well. The agreement sets a 30-day due date after announcement of departure, which for SDSU came Sept. 12.
One argument by Pac-12 attorneys is they’re unnecessary because the Mountain West already stands to receive exit fees, which are triple the annual average distribution per school with 12 months’ notice (or between $18 and $20 million) and “provide more than sufficient compensation.” Another is that they signed the scheduling agreement out of desperation.
“In the wake of this mass exodus from the Pac-12 caused by fierce competition from rival conferences,” the legal complaint says, “the Pac-12 had only months to salvage the 2024-2025 season and create opportunities for its (1,000) student-athletes to compete with other schools. Exploiting the Pac-12’s weakened position, the MWC extracted a heavy price.
“Knowing that the Pac-12 was running out of time and short on leverage, the MWC not only charged the Pac-12 supra-competitive prices to schedule football games — over $14 million for OSU and WSU to play just six games each — but it also forced the Pac-12 to accept an unprecedented poaching penalty provision wholly unrelated to scheduling football games and designed to limit the Pac-12’s ability to compete with the MWC for years into the future.”
In an interview earlier this month, Nevarez indicated the poaching provision was a key part of the agreement.
“That was a very important piece for us,” Nevarez said. “At that point, there was so much unknown, so we just tried to protect ourselves against what we knew could potentially break us apart.”
Nevarez elaborated in her statement Tuesday:
“At no point in the contracting process did the Pac-12 contend that the agreement that it freely entered into violated any laws. To say that the Mountain West was taking advantage of the Pac-12 could not be farther from the truth. The Mountain West Conference wanted to help the Pac-12 schools and student-athletes, but not at the expense of the Mountain West.
“Now that they have carried out their plan to recruit certain Mountain West schools, they want to walk back what they legally agreed to. There has to be a consequence to these types of actions.”
Another point: The agreement was approved last year by the Mountain West hip at the time, which means some or all of the five departing schools green-lighted the poaching fees.
There was a negotiating window to extend the football scheduling alliance through 2025, but that expired Sept. 1. The Pac-12 claims the Mountain West wanted $30 million for the same 12 games; Mountain West sources claim the Pac-12, which had already arranged an alternate 2025 schedule against different teams, made a low-ball offer worth less than half of the $14 million from the 2024 deal.
Barely a week later, the Pac-12 extended invitations to SDSU and three other Mountain West schools. Now it has five and is courting a sixth.
The filing in U.S. District Court headquartered in San Francisco asks for a declaratory judgment wiping out the Mountain West fees as opposed to a jury trial. That might be because the scheduling agreement has a clause, in all capital letters, waiving their “right to trial by jury in any action arising … in connection with this agreement.”
Many insiders view the lawsuit as an attempt to negotiate down the fees, with every dollar less than $55 million representing a dollar saved (minus attorney costs, of course). A similar lawsuit could be filed by the departing Mountain West schools over the exit fees.
Sources have said the Pac-12 agreed to cover any poaching fees to extract SDSU from the Mountain West while the university would be responsible for the majority of the exit fees. SDSU athletic director John David Wicker said that would not come from taxpayer dollars or student fees but could involve a loan from the Pac-12 against future revenues in the new conference.
As of Tuesday afternoon, UNLV had not announced a decision whether to stay or go. If it’s the latter, that must be accompanied by approval from the state university system’s Board of Regents, which could get sticky.
A recent fiscal report provided to the regents noted UNLV’s athletic department faces a budget deficit of $20.6 million and required $11 million in bridge loans and other university funding this year as well as a hiring freeze and travel limitations.
The Mountain West’s financial inducement to stay, which was estimated at $12 million Monday but could easily climb, would erase most or all of that debt. A move to the Pac-12 could put UNLV further in the red, given the exit and poaching fees, but comes with the prospect of more revenue through TV and bowl payouts.
“Increased oversight of expenses and revenues,” the report said, “will ensure (the athletic department) stays within budget.”
