Mailbag: How ‘poaching penalty’ lawsuit could impact Pac-12 expansion, travel for Olympic sports, Gonzaga’s rev-share edge(?) and more
The outcome of the lawsuit could dictate whether UNLV is available later this year
We know the Pac-12 has to add at least one more school. Can you handicap the five most likely candidates? — @brycetacoma
Yes, the conference remains one football school short of the requirement, but the identity of the eighth member is one of several interconnected, unanswered questions.
We don’t know if expansion will end at eight. We don’t know when the school(s) will be added. And we don’t know if the conference is seriously considering growing the footprint into the Central Time Zone.
The Pac-12 is currently focused on securing a media rights deal for the contract cycle beginning in the summer of 2026. We’re skeptical that any single option could materially alter the overall valuation. The Pac-12 landed the schools it needed, particularly Boise State (football) and Gonzaga (basketball).
There are two ways to answer the specific question posed above.
The short and simple response is this: The next school probably will be UNLV from the Mountain West, Texas State from the Sun Belt, Memphis, Tulane or South Florida from the American or some combination of those five.
The more nuanced, less satisfying answer: It’s too early to know. Give us two months, and the Hotline should have a better feel for the situation. Why two? Because there’s an additional dynamic to consider: The antitrust lawsuit filed by the Pac-12 against the Mountain West in September.
For those unfamiliar, here’s a brief recap.
— The scheduling agreement between the conferences for the 2024 football season included a so-called poaching penalty in the event the Pac-12 offered membership to any Mountain West schools (and they accepted).
— The cost for grabbing five (Boise State, Colorado State, Fresno State, San Diego State and Utah State) is $55 million.
— In September, the Pac-12 initiated legal action against the Mountain West in the Northern District of California over the poaching penalty, asking the court to declare it an antitrust violation. (The legal complaint claims the penalty was designed “to stifle” competition and create an “artificial barrier to entry” for schools to join the Pac-12.)
— Two months later, the Mountain West filed a motion to dismiss the lawsuit — a motion based, in part, on the Pac-12 being a willing signatory to the scheduling partnership. (If the contract was illegal, why sign?)
Now skip ahead to the present, and our hesitancy to handicap the next phase of Pac-12 expansion.
The key date in all this, in our opinion, is March 25: The date of the hearing on the Mountain West’s motion to dismiss the lawsuit.
If Magistrate Judge Susan van Keulen rules in favor of the Mountain West and ends the legal challenge, the Pac-12 will be on the hook for $55 million and, perhaps, have no choice but to pursue Texas State.
If van Keulen rules in the Pac-12’s favor and allows the case to proceed, the situation could change dramatically.
Despite all the unknowns, we are fairly certain about one thing: University presidents do not like the disclosure process, and they definitely do not like trials.
If van Keulen allows the lawsuit to move forward, that seemingly would increase the likelihood of a settlement. And if there’s a settlement, that $55 million owed to the Mountain West becomes … $30 million? … $20 million?
Whatever figure is negotiated, it will be less than the Mountain West expected when it offered signing bonuses to UNLV and Air Force in exchange for their commitments to remain in the conference.
Those bonuses are believed to be in the $20 million to $25 million range and are based on $55 million entering the Mountain West’s bank account, courtesy of the poaching penalty.
If the penalty gets sliced in half through a negotiated settlement, UNLV and Air Force could reconsider joining the Pac-12 and American, respectively.
There’s another complicating factor (because there are always complicating factors with realignment), and it’s the timing.
In theory, the Pac-12 needs to offer membership to the eighth football-playing school this spring, so it can give notice-of-departure to its conference before July 1 and avoid an increase in fees. (In many instances, exit fees jump if notice is given within a year of departure.)
But because the hearing on the motion to dismiss the lawsuit is March 25, the legal process might not play out before UNLV hits the 12-month deadline to offer for notice-of-departure. Settlements take time.
Then again, it’s entirely possible that the Pac-12 focuses on Texas State and perhaps the trio of AAC schools this spring.
Or that UNLV is willing to wait, and the membership decision plays out after July 1.
After all, the validity of the Mountain West’s exit fees are facing legal scrutiny. In December, Utah State and Colorado State began legal action against the conference, claiming the fees are “invalid and unenforceable,” according to Yahoo. If that case plays out in favor of the departing schools, it likely would impact UNLV’s exit fees, as well.
Hopefully, that lengthy answer explains why we’re hesitant to offer odds on the Pac-12’s next expansion moves.
The legal proceedings are complicating factors, at least for the next few months.
The outcome of the lawsuit could dictate whether UNLV is available later this year
We know the Pac-12 has to add at least one more school. Can you handicap the five most likely candidates? — @brycetacoma
Yes, the conference remains one football school short of the requirement, but the identity of the eighth member is one of several interconnected, unanswered questions.
We don’t know if expansion will end at eight. We don’t know when the school(s) will be added. And we don’t know if the conference is seriously considering growing the footprint into the Central Time Zone.
The Pac-12 is currently focused on securing a media rights deal for the contract cycle beginning in the summer of 2026. We’re skeptical that any single option could materially alter the overall valuation. The Pac-12 landed the schools it needed, particularly Boise State (football) and Gonzaga (basketball).
There are two ways to answer the specific question posed above.
The short and simple response is this: The next school probably will be UNLV from the Mountain West, Texas State from the Sun Belt, Memphis, Tulane or South Florida from the American or some combination of those five.
The more nuanced, less satisfying answer: It’s too early to know. Give us two months, and the Hotline should have a better feel for the situation. Why two? Because there’s an additional dynamic to consider: The antitrust lawsuit filed by the Pac-12 against the Mountain West in September.
For those unfamiliar, here’s a brief recap.
— The scheduling agreement between the conferences for the 2024 football season included a so-called poaching penalty in the event the Pac-12 offered membership to any Mountain West schools (and they accepted).
— The cost for grabbing five (Boise State, Colorado State, Fresno State, San Diego State and Utah State) is $55 million.
— In September, the Pac-12 initiated legal action against the Mountain West in the Northern District of California over the poaching penalty, asking the court to declare it an antitrust violation. (The legal complaint claims the penalty was designed “to stifle” competition and create an “artificial barrier to entry” for schools to join the Pac-12.)
— Two months later, the Mountain West filed a motion to dismiss the lawsuit — a motion based, in part, on the Pac-12 being a willing signatory to the scheduling partnership. (If the contract was illegal, why sign?)
Now skip ahead to the present, and our hesitancy to handicap the next phase of Pac-12 expansion.
The key date in all this, in our opinion, is March 25: The date of the hearing on the Mountain West’s motion to dismiss the lawsuit.
If Magistrate Judge Susan van Keulen rules in favor of the Mountain West and ends the legal challenge, the Pac-12 will be on the hook for $55 million and, perhaps, have no choice but to pursue Texas State.
If van Keulen rules in the Pac-12’s favor and allows the case to proceed, the situation could change dramatically.
Despite all the unknowns, we are fairly certain about one thing: University presidents do not like the disclosure process, and they definitely do not like trials.
If van Keulen allows the lawsuit to move forward, that seemingly would increase the likelihood of a settlement. And if there’s a settlement, that $55 million owed to the Mountain West becomes … $30 million? … $20 million?
Whatever figure is negotiated, it will be less than the Mountain West expected when it offered signing bonuses to UNLV and Air Force in exchange for their commitments to remain in the conference.
Those bonuses are believed to be in the $20 million to $25 million range and are based on $55 million entering the Mountain West’s bank account, courtesy of the poaching penalty.
If the penalty gets sliced in half through a negotiated settlement, UNLV and Air Force could reconsider joining the Pac-12 and American, respectively.
There’s another complicating factor (because there are always complicating factors with realignment), and it’s the timing.
In theory, the Pac-12 needs to offer membership to the eighth football-playing school this spring, so it can give notice-of-departure to its conference before July 1 and avoid an increase in fees. (In many instances, exit fees jump if notice is given within a year of departure.)
But because the hearing on the motion to dismiss the lawsuit is March 25, the legal process might not play out before UNLV hits the 12-month deadline to offer for notice-of-departure. Settlements take time.
Then again, it’s entirely possible that the Pac-12 focuses on Texas State and perhaps the trio of AAC schools this spring.
Or that UNLV is willing to wait, and the membership decision plays out after July 1.
After all, the validity of the Mountain West’s exit fees are facing legal scrutiny. In December, Utah State and Colorado State began legal action against the conference, claiming the fees are “invalid and unenforceable,” according to Yahoo. If that case plays out in favor of the departing schools, it likely would impact UNLV’s exit fees, as well.
Hopefully, that lengthy answer explains why we’re hesitant to offer odds on the Pac-12’s next expansion moves.
The legal proceedings are complicating factors, at least for the next few months.
