The Pac-12 announced late Friday that it had fired two senior executives following an independent investigation which revealed that they failed to disclose overpayments by a distribution partner going back to 2016.
“Earlier today, the Pac-12 terminated the employment of two senior executives, effective immediately,” read the statement. “This action was taken following an investigation conducted by independent outside legal counsel. The terminations resulted from a failure by those two executives to disclose material information to the Pac-12 Board of Directors and external Pac-12 auditors in connection with overpayments by a Pac-12 Networks distribution partner dating back to 2016.”
The conference, which has many distribution partners, including Comcast, DISH, Cox, and Spectrum, did not identify the partner in question.
The conference also did not identify the executives by name. However, per the Mercury-News’ Jon Wilner, Pac-12 Networks president Mark Shuken and CFO Brent Willman, who oversees finances for both networks and conference operations, have been removed from the staff directory. Both were hired by former conference commissioner Larry Scott.
The Pac-12 included a timeline of events in their statement, explaining how the situation unfurled and how they handled it.
According to their timeline, the Pac-12 Networks had an independent auditor look into certain distribution partner payments in 2017. The audit’s conclusion was that “one of the Pac-12 distribution partners had overpaid the Pac-12 Networks for the year 2016 by a material amount.” The two executives were made aware of the results in late 2017. While they did not personally benefit from the overpayments, they failed to let the Pac-12 Board of Directors or the Pac-12’s external auditors know about the financial risk that came with that overpayment at any point since.
The distribution partner let the conference know in October 2022 that it realized it had been overpaying the Pac-12 every year, with that overpayment now totaling over $50 million. At that point, the Pac-12 says it looked into the claim and hired an independent legal counsel to review the situation. That investigation confirmed the details and said that “these executives failed in their obligations and duties to immediately disclose this information related to an immediate and material financial risk to the Pac-12 to the Pac-12 Board of Directors and the Pac-12’s external auditors.”
Commissioner George Kliavkoff made the decision to terminate the executives, which was discussed with the board on January 19 and carried out on January 20.
It’s not yet known if the Pac-12 is reimbursing the partner or if there is some arrangement in place.
[Pac-12, Mercury-News, The Athletic]
