The Mountain West’s legal tug-of-war with the Pac-12 and the five schools that will leave the former league for the latter continues to rage into the 2025-26 athletic season.
While that’s disappointing, it’s not a surprise as the are now $165 million reasons for both sides to dig in without relent.
Pac-12 insider John Canzano reported this week the MW’s failed mediation with the five departing schools — Boise State, Colorado State, Fresno State, San Diego State and Utah State — never neared a settlement. The MW is contractually obligated to get $22 million from each school, per the league’s bylaws. Canzano reported the MW offered to cut the exit fee to $18 million while the departing schools’ initial offer was $9 million. The MW counteroffered by staying at $18 million before the Pac-5’s second offer was $10 million per school, at which point a stalemate was afoot. Citing a source, Canzano said the exit-fee mediation “ended up on different planets.”
It’s worth noting the exit fee per school is now $22 million rather than $18 million. That exit fee is three times the average conference distribution per MW school, which had been around $6 million. But with the MW continuing to rack up NCAA men’s basketball tournament units (24 in the last three seasons, with San Diego State earning nine) and Boise State making the College Football Playoff, the conference distribution has spiked.
That’s a good thing for the MW as the $18 million per-school exit fee would have totaled $90 million while $22 million per school is $110 million. That’s a $20 million difference.
The MW also feels like it’s in line for a $55 million poaching penalty stemming from the Pac-12’s football scheduling alliance signed in December 2023, which the Pac-12 has called illegal after filing a lawsuit. The Pac-12 claims the contract, which it signed nine months before suing over its validity, is “anticompetitive and unlawful” and was “imposed on the Pac-12 to inhibit competition for member schools in collegiate athletics.” The suit calls the penalty “exorbitant and punitive.”
Essentially, the Pac-12 is saying the contract isn’t binding because it is illegal, citing antitrust laws, among others. I can’t weigh in too much on this as I’m no lawyer — my brother is and makes far more money that I do — but MW commissioner Gloria Nevarez, a defendant in the departing schools’ case against the MW, has a law degree as does Nevada president Brian Sandoval, a former federal judge who has been leaned upon during this process, which makes the MW confident in the contract.
Let’s instead focus on the lawsuit filed by Boise State, Colorado State and Utah State against the MW over the exit fees (Fresno State and San Diego State can’t be part of the lawsuit because San Jose State is in the MW and California State University schools can’t sue one another). The lawsuit was recently amended by the departing schools, who accuse the MW of improperly withholding tens of millions of dollars and misleading those schools about a plan to add Grand Canyon to the MW in 2025 rather than 2026.
The first claim — of the MW wrongfully withholding money — is laughable. The MW bylaws state conference distribution would be withheld from schools once they issue exit notice to the league, which the Pac-5 did in May to avoid seeing its exit fee double. Those bylaws read, “After receiving Notice of Resignation from a Member, all payments due that Member from the Conference shall be withheld and applied to that Member’s Exit Fee. The balance of the Member’s Exit Fee as provided above, shall be paid by the Member to the Conference on or before the Effective Date.” According to those bylaws, the MW can withhold the departing school’s 2024-25 and 2025-26 conference distribution as a down payment on the exit fee owed by those schools.
The interesting wrinkle here is the claim from Boise State, Colorado State and Utah State that adding Grand Canyon hurts those schools in 2025-26 and was done in devious fashion. From a moral standpoint, it’s the pot calling the kettle black as administrators from the schools that accepted Pac-12 invitations last September have admitted to accepting offers to join the Pac-12 before they counseled Nevarez on sticking firm to a $14 million price tag to extend the Pac-12 scheduling alliance for the 2025 season (the contract stated a $9 million cost for 2025). That makes you wonder if those departing schools were intentionally trying to sow division between the MW and Pac-12 to destabilize its conference and draw an offer from the Pac-12.
That could accurately be called misleading, the same term the future Pac-12 schools have applied to the MW for adding Grand Canyon even though that was hinted at when the Antelopes agreed in November to join the league. Further, the amended lawsuit claims the MW “intentionally and fraudulently” deprived the departing school of their membership rights while “impacting the rights and opportunities of plaintiffs’ student-athletes for their last year in the conference.” Those schools argue adding Grand Canyon a year early has caused millions of dollars in harm and are seeking damages.
“We are disappointed that the Mountain West continues to improperly retaliate against the departing members and their student-athletes,” said Steve Olson, a lawyer for the departing schools, told The Athletic.
I fail to see how adding Grand Canyon to the MW is retaliation or greatly harms those schools.
Firstly, there’s precedent. When Oklahoma and Texas agreed to leave the Big 12 for the SEC, they lost seats on the Big 12’s Board of Directors and the conference then added BYU, Houston, Cincinnati and UCF a season early before the Longhorns and Sooners left for the SEC. Additionally, the five departing schools simultaneously held board seats with the Pac-12 and MW for nearly nine months, from the time they accepted spots in the Pac-12 last September until giving official exit notice on the last day of May. Only at that point was the MW allowed to remove those schools from the Board of Directors, per the league’s bylaws. For three-quarters of a year, there was a clear and obvious conflict of interest that delayed the MW’s ability to discuss adding Grand Canyon as a 2025 member.
The argument Grand Canyon’s addition in 2025 significantly and negatively impacts the schedules, opportunities and budgets of the departing schools just isn’t true. The addition of the Antelopes should raise the strength of schedule for MW schools in a number of sports as Grand Canyon has been the WAC’s elite school, winning 37 conference titles the last four seasons while putting five teams in the NCAA Tournament last year, which would have tied New Mexico for the MW’s top figure.
There also is no negative impact on travel budgets, as Nevarez said during the MW football media days the conference will cover any documented additional travel and scheduling expenses associated with Grand Canyon’s addition. Furthermore, Grand Canyon is paying the MW an entrance fee and annual dues, which will increase the conference’s total distribution revenue and distribution. The Antelopes also will forfeit a 2025-26 conference distribution from the MW.
This feels like the five departing schools grasping at straws to lessen the financial blow now that the Pac-12’s attempt to woo bigger-name brands out of the American Athletic Conference came up empty, which forced the Pac-12 to add Utah State from the MW and Texas State from the Sun Belt, two less attractive schools than the initial targets.
The promised major media-rights deal floated no longer appears forthcoming, and now the departing schools are scrambling and suing to try and get a more manageable exit fee. Paying a $20 million exit fee to leave the MW might make sense if you’re joining a league that will give you an annual conference distribution that’s $10 million-plus more than what you would have earned from staying put. It makes less sense if that payout is nowhere near that increase, which appears to be the case for these future Pac-12 schools.
While I may not be qualified to speak from a legal standpoint on this lawsuit, I can speak from a logical one, and the arguments these departing schools are trying to forge forward with in this lawsuit makes little sense.
Sports columnist Chris Murray provides insight on Northern Nevada sports. Contact him at crmurray@sbgtv.com or follow him on Twitter @ByChrisMurray.