Pac-12 Sues Mountain West, Claims Eight-Figure Poaching Fees Are Illegal

The Pac-12 is trying to get out of damage payments for poaching Mountain West members.

On Tuesday, the conference filed a lawsuit in federal court in the Northern District of California, arguing that some of the terms of its football scheduling partnership with the Mountain West are illegal, and therefore unenforceable. It’s the latest move in a larger conference realignment battle between the Pac-12 and Mountain West.

The goal, presumably, is to get out of a clause stipulating multimillion-dollar financial penalties the conference is obligated to pay the Mountain West for adding its members. The scheduling agreement, which allows Oregon State and Washington State to be slotted into Mountain West conference schedule play, includes an escalating damage fee for each school the Pac-12 takes, short of a full-on reverse merger. 

Currently, the conference owes $43 million to the Mountain West for adding Boise State, Fresno State, San Diego State, and Colorado State, according to a copy of the agreement obtained by FOS. The conference would owe $55 million if it also took Utah State. (The Pac-12 “admitted” Utah State on Monday, court documents reviewed by Front Office Sports confirmed.)

The Pac-12 called the penalties “unlawful” and “draconian,” and also accused the Mountain West of “exploiting” the conference’s weak position last fall.

“The Poaching Penalty saddles the Pac-12 with exorbitant and punitive monetary fees for engaging in competition by accepting MWC [Mountain West] member schools into the Pac-12,” the conference wrote. “The MWC imposed this Poaching Penalty at a time when the Pac-12 was desperate to schedule football games for its two remaining members and had little leverage to reject this naked restraint on competition. But that does not make the Poaching Penalty any less illegal, and the Pac-12 is asking the Court to declare this provision invalid and unenforceable.”

The agreement was signed last December by former Pac-12 Commissioner George Kliavkoff, Mountain West Commissioner Gloria Nevarez, and representatives from Oregon State and Washington State.

The one-year football scheduling partnership is currently in use this year. However, the two decided not to renew the partnership (despite a clause allowing them to if they agreed by Sept. 1) after a dispute over money, a source previously told FOS. The Pac-12 agreed to pay about $14 million for the partnership this year.

After the Pac-12 announced it would add four Mountain West members on Sept. 12, Nevarez sent a letter to Pac-12 Commissioner Teresa Gould requesting the $43 million. Gould replied that she did not think the conference was on the hook for it.

Lawyers for the Pac-12 are the same who represented Oregon State and Washington State in a case last fall. In September, the schools sued the Pac-12 conference entity (in effect, the departing members) in order to win control of the conference’s assets and intellectual property—and to keep the departing schools from voting to dissolve the conference. The parties settled and inked a divorce agreement in January, in which the two-member Pac-12 got the rights to the conference name, as well as $65 million in exit fees. 

“The Pac-12 has taken advantage of our willingness to help them and enter into a scheduling agreement,” Nevarez said in a Tuesday afternoon statement. “Now that they have carried out their plan to recruit certain Mountain West schools, they want to walk back what they legally agreed to. There has to be a consequence to these types of actions.”