Pac-12 Lawsuit Ends in Settlement as Questions Remain

While the Pac-12’s future as a conference remains grim, its 12 member schools agreed in principle Thursday to settle litigation over who should control conference assets and hundreds of millions of dollars in conference revenue used to run athletic programs.

“We are pleased to have reached an agreement in principle that ends litigation,” the 12 schools said in a joint statement.

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The litigation was brought initially by Oregon State and Washington State, who were left stranded as the “Pac-2” when the other 10 members bolted over the past year for the Big Ten, Big 12 and ACC.

In a separate and more celebratory statement on Thursday, OSU president Jayathi Murthy and WSU president Kirk Schulz said, “Today’s news marks a huge victory for our universities and a significant step toward stabilizing the Pac-12 Conference and preserving its 108-year legacy.”  According to the two presidents, the 10 departing schools have agreed to “forfeit” an unspecified “portion of distributions over the remainder of the 2023-2024 year.” The 10 departing schools also agreed to “provide specific guarantees against potential future liabilities.”

The details of those provisions (assuming Murthy and Schulz have accurately described them) are crucial to understanding their true impact. A “portion” could be large or small and “guarantees” related to liabilities can range widely.

In some ways this was the only outcome that made sense following last Friday’s decision by the Washington Supreme Court to deny a review of a preliminary injunction. The injunction enables Oregon State and Washington State to control the conference. Since a trial would likely not have occurred for many months, the preliminary injunction could have remained in effect after the 10 departing schools were no longer in the Pac-12. Once they left, control over the conference would have been moot.

The 10 departing schools had stressed they remain Pac-12 members until they leave the conference next summer. From that lens, they argued they should continue to have a voice on conference affairs, just like other members.

But WSU and OSU maintained that, under conference bylaws, the 10 departing schools forfeited that voice once they announced they were joining other conferences. WSU and OSU also highlighted the conflict of interest the 10 departing schools would have had as lame duck Pac-12 members. Their allegiances would have arguably been with their soon-to-be new conferences, which compete with the Pac-12 for employees and athletes, as well as for media, telecast and merchandise deals.

The case began in September when WSU and OSU sued the Pac-12 and its commissioner, George Kliavkoff, in a case heard by Judge Gary Libey. The presiding judge would need to accept a settlement before the case is formally dismissed.

To the extent the 10 departing schools are accepting a meaningfully smaller share of distributions and are insulating OSU and WSU from some potential legal claims—such as, possibly, those stemming from contracts with conference vendors and licensees, employment contracts for conference employees, or health, benefit, real estate and insurance policies—that’s a substantial gain for OSU and WSU and validates their decision to sue. This framework also suggests further litigation among conference members is less likely.

As to WSU’s and OSU’s future in athletics, their football teams will play in the Mountain West Conference in 2024, and the same reportedly could prove true for their basketball teams. What happens to the Pac-12 is unclear, but should it dissolve, the 12 schools reaching a resolution on Thursday would likely make that process less litigious and costly.

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