Washington is concerned about financial retribution if a lawsuit results in Washington State and Oregon State gaining control of the Pac-12’s governing board for the duration of the current competition year, according to court filings obtained by the Hotline.
“If OSU and WSU gain control of the Board, I am concerned that they would claim control over the entirety of UW’s media rights interests,” Washington president Ana Mari Cauce said in a sworn statement, adding: “I am also concerned that, in general, a Board controlled by OSU and WSU would decide not to distribute net revenues earned by UW and the other nine departing institutions for competing during the 2023-24 year.”
WSU and OSU are seeking a preliminary injunction from Whitman County (Wash.) Superior Court Judge Gary Libey that would give the two remaining schools sole control of the Pac-12’s board before the other 10 leave for their new conferences next summer.
(A hearing is scheduled for Nov. 14.)
As the only voting members of the fractured conference, the Cougars and Beavers would control the distribution of more than $400 million in revenue that is expected to be divided equally among the 12 member universities.
Washington and the other nine departing schools are fighting the preliminary injunction in an attempt to retain their board seats and secure access to $35 million (approximately) per campus in the 2024 fiscal year.
Those conference distributions account for approximately 33 percent of each athletic department’s annual revenue. (The other main sources are ticket sales and donations.)
Because the lawsuit was filed within its state, Washington is the only outgoing school to submit documents to the court and has filed a motion to intervene — a key step in getting the lawsuit dismissed.
“UW depends on revenue distributions from the Conference to fund our Intercollegiate Athletics budget, which includes millions of dollars for critically important services such as student-athlete mental and physical health, academic support, and nutrition and meals,” Cauce said.
“Losing this revenue would be devastating for UW and our student-athletes. … I know that the other departing institutions would face similar issues if they did not receive distributions (from) the Pac-12 this year.”
There are three primary sources of revenue for the conference:
— Tier I media rights deals with ESPN and Fox.
— Pac-12 Networks distribution contracts (with Comcast, Dish, etc.).
— Postseason distributions from the College Football Playoff, Rose Bowl and NCAA Tournament.
In 2023-24, the final year of the agreement with ESPN and Fox, the two networks are expected to pay the conference $321 million, according to the term sheet obtained by the Hotline.
Meanwhile, the Pac-12 Networks typically generate more than $100 million in revenue, and the postseason events are worth more than $150 million, based on the revenue reported by the conference in its tax filings for the 2022 fiscal year.
How would WSU and OSU use hundreds of millions in revenue currently earmarked for the 10 departing schools? A separate filing last week by attorneys for the Pac-12, which is a named defendant in the lawsuit by WSU and OSU, offered some insight:
“Plaintiffs seek exclusive control over the Conference from the Departing Members to use, in their words, the same Conference ‘coffers’ to ‘recruit new members,’ for ‘rebuilding the conference and planning for future seasons,’ and ‘to explore media and scheduling opportunities’ all of which would be effective after August 1, 2024.”
WSU and OSU have two options:
— Join the Mountain West in a traditional realignment move.
— Attempt to rebuild the Pac-12 with all or some schools from the Mountain West.
Any reconstruction would require immense resources and could take several years. For that reason, the Cougars and Beavers are considering whether to compete as a two-team conference next year — an unusual path but one allowed by NCAA rules.
It’s unclear if board control would allow WSU and OSU to prevent the 10 departing schools from receiving the entirety of their revenue shares or just the portion related to Tier 1 media rights (from ESPN and Fox).
According to Cauce’s statement:
“The power to ‘grant back, license or assign back any portion or all of the rights to the participating members’ lies with ‘the Pac-12 Board of Directors.’ If OSU and WSU gain control of the Board, I am concerned that they would claim control over the entirety of UW’s media rights interests.
“I am concerned that OSU and WSU would refuse to grant or license back UW’s media rights in its own athletic competitions, and may demand unreasonable charges for such grants or licenses back.
“I am concerned that they would be able to take similar steps against the other nine departing institutions.”
In addition to the preliminary injunction hearing scheduled for next week, the plaintiffs and defendants have entered mediation.
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