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Wednesday, July 24, 2024

Washington State, Oregon State land court victory against Pac-12

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Washington State and Oregon State scored a major victory off the field on Tuesday.

A Washington county judge ruled in their favor, granting a preliminary injunction that gives the two schools control of Pac-12 governance and assets — an estimated $400 million this year.

However, the ruling from Whitman County Judge Gary Libey is stayed until at least Monday as attorneys for the departing 10 Pac-12 schools work to appeal the decision. Depending on a timeline for the appeals process, the case could continue for months without a resolution.

Libey’s ruling is a sign that the Cougars and Beavers are in position to win the case against the departing 10 Pac-12 programs over control of the league’s decision-making. At the center of the case is control of more than $400 million this year in Pac-12 revenue from television contracts, the Rose Bowl and NCAA basketball tournament units. That revenue is normally distributed to each school, starting with installments in December. Each school is due about $35-40 million.

Washington State and Oregon State now control those distribution rights, granting the schools the ability to use that revenue in different ways, including withholding it from those exiting schools. However, in making his ruling, Libey describes this as a “modified” preliminary injunction. “This is not a shutout,” he said.

The 10 departing schools should be “treated in a fair manner,” he said. He does not believe that WSU or OSU will make any decision to “directly harm the 10 members,” and if they do, the court will hear about it, he warned them.

Attorneys from the two sides — Washington State/Oregon State and the Pac-12’s departing members — argued for more than two hours Tuesday. They made similar arguments laid out in multiple court filings over the last several months.

Fear of the unknown was rooted in each side’s defense.

Oregon State and Washington State believe that the other 10 members, if given voting rights on the board, will dissolve the conference, escape the liabilities and legal entanglements in which the league is involved and distribute the revenues to themselves.

The other 10 schools believe that OSU and WSU, if given full control of the conference, will keep much of this year’s distribution for themselves in an effort to: (1) rebuild the league by financially enticing expansion targets and/or paying those targets’ conference exit fees and (2) arrange future scheduling alliances with financial incentives.

The ruling likely paves the way for Washington State and Oregon State to better plan for its future.

In a move to retain the Pac-12’s assets — the league is due more than $100 million in future assets the next two years — Washington State and Oregon State are preparing to operate as a two-school conference for at least next year, even assembling a schedule for the 2024 football season that is akin to an independent school.

They are using a two-year NCAA grace period. Conferences falling below the minimum eight members are allowed two years to return to the eight-member mark before they are no longer recognized as a conference.

Oregon State and Washington State, clearly still toying with the idea of rebuilding the conference, have been in discussion with the Mountain West over a scheduling alliance to complete a 12-game slate in the short term. But that comes with strings. The Mountain West wants a more long-term commitment and financial incentives as part of any alliance. The two schools have approached other leagues about a scheduling alliance as well, including the Sun Belt.

WSU and OSU’s control of so much cash could potentially assist their ultimate goal of preserving the Pac-12 and rebuilding the conference by plucking away teams from, for instance, the Mountain West.

There is debate on what exactly the two schools will do with their governance powers and the millions in assets now at their disposal. It was at the center of the case Tuesday.

An attorney arguing on behalf of the 10 departing schools said that OSU and WSU are asking for the league to give them the keys to the vehicle, “but we don’t know where we’re going.”

If given full control of this year’s Pac-12 assets, would OSU and WSU strip all other 10 members of their revenue distribution?

“We aren’t saying that they automatically lose their money,” said Eric MacMichael, an attorney for Oregon State and Washington State.

MacMichael later said that OSU and WSU have no “secret plan” on their future but are “shackled to 10 people who have no interest in seeing this conference survive. All they want is to get every last dollar out of the Pac-12 [before leaving].”

In explaining his decision, Libey pointed toward the 10 schools’ actions: Two are heading to the Big Ten, four to the Big 12 and two to the ACC. At the center of the departing schools’ argument was a claim that they did not give formal withdrawal notice and thus should still remain voting members to control assets.

“I grew up where conduct spoke louder than words,” said Libey, a 1973 Washington State graduate. “Conduct is what counts and words don’t so much. What you do and how you do it is what counts in life.”

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