The legal fight over control of the remaining Pac-12 assets has taken another turn. As per Jon Wilner of The (San Jose) Mercury-News and the syndicated Pac-12 Hotline column, the Pac-2 (non-departing schools) of Oregon State and Washington State have now blocked a midseason revenue payment “traditionally” handed out to all campuses:
News: WSU & OSU have blocked a midyear, ~60 million revenue distribution to all #Pac12 campuses:https://t.co/0rAqXrq6h9
— Jon Wilner (@wilnerhotline) December 11, 2023
Here’s more from that piece:
On Dec. 5, commissioner George Kliavkoff notified the 12 campuses that, in accordance with past practice, the conference was prepared to distribute 15 percent of its annual revenue to the schools.
For the 2023-24 fiscal year, that split is approximately $61 million, or just over $5 million per campus, according to a memo obtained by the Hotline.
Kliavkoff explained that the 15 percent distribution is “not expressly required under our bylaws” but “traditionally” has been sent to the schools in December.
…[From an Oregon State and Washington State statement]: “No member acting in the Pac-12′s best interest would allow departing schools to drain the Conference’s assets on their way out the door, while they refuse to pay their fair share of the liabilities.”
The liabilities here are worth discussion. As Wilner notes, one big concern in particular is a class-action antitrust lawsuit from former Arizona State swimmer Grant House on behalf of thousands of former athletes, which targets the NCAA, the Pac-12, and the other Power Five conferences.
That lawsuit, which seeks both backpay over name, image, and likeness (NIL) rights and also 10 percent of media rights isn’t even set to go to court until January 2025, and could result in billions in damages. And so that has Pac-2 sources saying things to Wilner like “The departing schools have not committed to a plan for addressing the liabilities. If there’s a judgment (in the House case), the named entities would be responsible. And the Pac-12 is a named defendant.”
This is an interesting part of conference realignment that hasn’t yet seen a whole lot of discussion. The departing schools here are all headed to other Power Five conferences, so they wouldn’t necessarily be fully dodging any House judgement if it does come; it might also impact those conferences and the future media revenues they had expected. But there certainly still might be notable impacts against the Pac-12, even with it having far less members than it did at the time the lawsuit was filed.
So there’s an understandable argument for Oregon State and Washington State here. Those schools are trying to preserve what remains of the conference, including with a Mountain West scheduling deal for next year. And that could perhaps lead to expansion or a closer alignment down the road. And that fits with why they would try to avoid payments not specifically required by bylaws from the conference coffers, in case this litigation winds up as a major liability.
With that said, though, this is also part of the larger legal battle over who controls the Pac-12 assets. Those include future incoming payments from the NCAA. Oregon State and Washington State saw a notable legal victory there in November, but the other 10 schools have appealed. And nothing yet has really been decided there. So this is just part of a larger fight. But it is interesting to see the Pac-2 take this step to nix these “traditional” distributions.
