Who will control Pac-12 moving forward? Tuesday's hearing could have wide-ranging impacts

Earlier this month, Sun Belt Conference presidents gathered for an emergency call to discuss realignment.

At the center of the meeting was a proposal from out West.

Oregon State and Washington State were interested in a short-term scheduling alliance with the conference. Deliberation didn’t take long. The presidents were not interested. The travel was too far and there were no real financial incentives.

However, the proposal from the two remaining Pac-12 programs provides insight into their mad scramble to assemble a football schedule less than 10 months before the 2024 season kicks off — a difficult plight that might be made easier with a court ruling this week.

Administrators from both schools are scheduled to appear at a hearing over a preliminary injunction Tuesday in Whitman County (Washington) Superior Court — part of their lawsuit against the Pac-12’s exiting 10 members and commissioner George Kliavkoff.

The result of the hearing, set to begin at 2 p.m. PT, could have wide-ranging impacts, first on the financial situation at all Pac-12 schools and next on the future of the Pac-12’s existence.

As with many aspects in the modern era of college athletics, the fight is over money.

Judge Gary Libey must determine what schools — the two remaining members or all 12 — control the distribution of the league’s millions of dollars in not only future assets but current assets, too. Oregon State and Washington State are arguing that they, as the programs not leaving, should be the only voting members on the conference’s governing board. The other 10 schools are arguing to keep their voting privileges and, thus, their cash.

The suit at first was believed to center around the more than $100 million in future assets due to the conference in 2024, 2025 and beyond. But according to recent court filings in the case, current assets — those due the 12 schools this very academic year — are at stake. That includes roughly $400 million in conference distribution from the 2023-24 academic year — roughly $40 million per school — from the league’s television deal, NCAA tournament units and the Rose Bowl.

Fear of the unknown is 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 or/and paying those targets’ conference exit fees; (2) arrange future scheduling alliances with financial incentives; and (3) monetarily damage the 10 schools as a penalty for the collapse of a 108-year-old conference.

“This lawsuit is not just about the Pac-12 future, but also its present,” read court documents filed earlier this month by the University of Washington. “Whatever OSU and WSU decide to do with the money earned after Aug. 1, 2024, it is fundamentally inequitable to allow them to take current-year revenues and confiscate such revenues and assets in contravention of all members’ rights to and interest in them.”

Attorneys briefed on the case expect the judge to make a ruling by the end of the hearing or soon afterward.

Most believe that Libey has three ruling options: (1) he could grant OSU and WSU full control of the Pac-12 governance and assets; (2) he could extend the ruling he made in September that prevents the Pac-12 board from meeting and making any decisions unless there is unanimity; or (3) he could deny OSU and WSU’s motion and rule that all 12 schools have voting rights on the board.

The 10 departing schools are requesting that Libey modify the preliminary injunction to clarify that OSU and WSU may not use revenues from 2023-24 to pay for scheduling games, adding members or any other purposes that don’t benefit the exiting 10 schools.

In a response filing last week, the Cougars and Beavers disagree. The schools’ lawyers write that the request from the 10 exiting programs to keep their 2023-24 revenues is “disappointing but not surprising” and offers no provision for any liabilities that the league incurred while the departing schools were members.

The Pac-12 is at the center of multiple legal challenges that could eventually cost millions of dollars. The league is a defendant in a case, House v. NCAA, over retroactive name, image and likeness payments and athlete compensation tied to media rights. It is mentioned in the National Labor Relations Board’s employment case. Two more lawsuits against the league, one from former employees and another from a bowl game, could be costly as well.

More pressing than those liabilities is the future conference membership and schedules for Oregon State and Washington State football, as well as their other sports.

For now, many legal experts believe that the Pac-12’s future assets can be retained by the two schools if they preserve the league at least in the short term. They 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.

That may have led to Oregon State and Washington State’s proposal to the Sun Belt — an effort to shop around a proposal to complete their schedules.

By Tuesday evening, within a Washington county courthouse, the future of the Beavers and Cougars will be more known — and so too the existence of the Pac-12.