By: Dustin Lennon-Jones

Driven by the ever-expanding pile of cash available in college football, the departure of USC and UCLA to the Big Ten in June of 2022 began a cascade of moves that has pushed the Pac-12 to the brink of extinction. The remaining members, Washington State and Oregon State, were left in the dust. With no clear path forward, the so-called “Pac-2” were left scrambling to put together a football schedule and begin rebuilding the conference.

The Scheduling Agreement

To fill out their football schedule for at least 2024, WSU and OSU entered into an agreement with the 12-member Mountain West Conference (MWC). Under the agreement, each school would play 6 games against MWC members. In exchange, the Pac-12 schools would pay the MWC $14 million: $9 million in football participation fees, $3 million in “general participation fees,” and $2 million in compensation for “scheduling and administrative services.” In recognition of the mass exodus of schools from the Pac-12, the MWC also sought to protect itself from a similar fate. Included in the agreement were “termination fees.” If the Pac-12 decides to add a MWC member anytime before the end of the agreement, the Pac-12 would be required to pay an escalating fee, ranging from $10 million for one school up to $137.5 million for 11 schools. This is on top of the exit fees paid by the departing school to the conference, set at $17 million per school. Notably, if the Pac-12 decided to add all 12 schools and effectively merge with the MWC, there is no fee requirement.

FBS Eligibility Requires the Addition of New Members

The Football Bowl Subdivision (FBS) is the top level of college football, containing historically the strongest teams and conferences. However, NCAA bylaws require that conferences have 8 members to be eligible to compete, a number which the Pac-12 falls well short of. The good news for the Pac-12 is that there is a 2-year grace period from when a conference drops below 8 members to keep its existence. That would give them until August 2026 to find a permanent solution. On September 12^th, the Pac-12 announced 4 new members, all from the MWC: Boise State University (Boise St.), Colorado State University (CSU), California State University-Fresno (Fresno St.), and San Diego State University (SDSU). Shortly thereafter on September 24^th, it was announced that Utah State University (USU) would also be joining the Pac-12 from the MWC.

The Lawsuit

Following the September 12^th announcement, Gloria Nevarez, the commissioner of the MWC, sent a letter to the Pac-12 informing them that under the scheduling agreement, the MWC was entitled to collect $43 million in termination fees as a result of the departure of Boise St., CSU, Fresno St., and SDSU. Including USU brings the total to $55 million. The Pac-12 unsurprisingly takes a different view on the matter. Teresa Gould, commissioner of the Pac-12, responded in a letter to Nevarez stating that the fees were unlawful, and they would be filing a complaint in court seeking judgment declaring the provisions unenforceable. The Pac-12 labels the fees “poaching fees,” and requests that they be invalidated as a violation of the Sherman Antitrust Act, California’s Cartwright Act and Unfair Competition Law, and as an unenforceable penalty under the principles of contract law. 

The complaint also tells a much different story on the events leading to the signing of the scheduling agreement. In the immediate aftermath of the departure of nearly the entire conference, the Pac-12 was in a vulnerable position. They accuse the MWC of taking advantage of this lack of leverage, charging “exorbitant” fees for the 2024 schedule and forcing them to accept an “unprecedented poaching penalty.” Since the penalty provision remains in effect for 2 years after the termination of the agreement, the Pac-12 argues that this unfairly inhibits their ability to compete with the MWC and reduces their members’ options for mobility. 

The unfairness is further exacerbated due to the fact that this restraint only applies to the Pac-12 and the two conferences geographic proximity makes them the most logical competitors for schools in the region. The penalty thus functions the same as no-poach, no-hire, and non-solicitation agreements that have already been declared unlawful in California (where the suit was filed) and around the country. In addition to an unfair restraint on competition, the Pac-12 highlights the fact that the MWC will already be collecting exit fees from the departing schools. This makes the penalty to be paid by the Pac-12 “duplicative” and “unnecessary,” further demonstrating the fact that it does not serve to compensate the MWC for losing members but to restrain the Pac-12’s ability to compete.   

Why Not Merge: The Importance of Being An “Autonomous Conference”

If the scheduling agreement would allow the Pac-12 to add the entire MWC without penalty, why wouldn’t they? It would appear that this would take care of both the penalty problem and the NCAA eligibility problem. The importance of being a “power conference” and the benefits that come with mean that this solution is not as elegant as it may seem.  When the College Football Playoff (CFP) originally expanded from 4 teams to 12, the format granted automatic qualification to the champions of the “Power 5” conferences: the SEC, Big Ten, Big 12, ACC, and Pac 12. These conferences also receive larger shares of the revenue generated by the CFP. The collapse of the Pac-12 led to them losing their “power” status and consequently their automatic qualification and increased revenue share. Adding new teams from the MWC is certainly the first step towards regaining this status, but there is still a long way to go. As is the trend in college athletics, money talks. The lowest Power 5 TV deal paid around $17 million per school, while the MWC’s TV deal paid just $4 million per school. This is likely the motivation behind the Pac-12 being selective in who it chooses. Merging with the MWC is simply not a step towards regaining its relevance as a power conference.

What’s Next

As we await an answer from the MWC, the future of the Pac-12 is still very much up in the air. While adding additional members is a foregone conclusion, which teams they may target remains uncertain. A loss in their lawsuit may mean that adding more teams from the MWC will be prohibitively expensive. Conference realignment will continue to have domino effects on conferences across the country as the MWC will look to replace its departing members. One thing is certain: the college football landscape has been changed, permanently.

#PAC12, #collegefootball, #antitrust