Pac-12 legal saga: 10 departing schools agree to settlement with WSU and OSU, ending internecine litigation
The fight for control of the Pac-12 is over. The 10 departing schools have agreed in principle to a settlement with Washington State and Oregon State that ends three months of litigation and provides clarity on the future of the conference. Terms were not disclosed.
Announced Thursday afternoon, the deal comes less than one week after the Washington Supreme Court declined to review a lower court’s ruling that had established WSU and OSU as the only members of the governing board.
While the high court’s decision seemingly left the outbound schools with little leverage, the settlement was reached hours before the Supreme Court’s ruling, according to a source familiar with the situation.
As part of the settlement, the 10 schools “have agreed to forfeit a portion of distributions over the remainder of the 2023-2024 year and provide specific guarantees against potential future liabilities,” according to a joint statement issued by WSU and OSU. Additionally, “The conference retains its assets and all future revenues.”
The 10 departing schools also issued a joint public comment:
“This agreement allows OSU and WSU to maintain control of the hundreds of millions of dollars coming into the conference in future years, as we have always maintained they would, while calling for the vast majority of funds earned in 2023-24 to be distributed equally among the 12 members. We will take time in the coming days to work out the final details.”
The amount forfeited was not revealed but likely is based on the $420 million in revenue the conference is expected to generate in the current competition year. If divided equally, a full share would be $35 million per school.
Estimates during the course of the legal process had pegged a reasonable forfeiture amount between $5 million and $10 million per departing school.
Combine the forfeited revenue with at least $100 million in long-term conference assets – much of that comes from the Rose Bowl contract and the NCAA Tournament payouts – the Cougars and Beavers will have a war chest from which to support their athletic departments and compete as a two-team conference in football for the 2024-25 seasons.
(They might have enough to lure schools from other conferences into a rebuilt Pac-12 for the 2026 season.)
The second piece of the settlement – “specific guarantees against potential future liabilities” – is equally significant given that the conference faces a series of lawsuits and has expenses looming.
Those expenses could include commissioner George Kliavkoff’s contract. If terminated without cause sometime this winter, Kliavkoff likely would be owed $8 million or $9 million, based on compensation data in recent Pac-12 tax filings.
The most daunting liability facing the conference is a class-action antitrust lawsuit against the NCAA that could carry billions of dollars in damages – and features the Pac-12 as a named defendant.
WSU and OSU were concerned about having to pay an eight- or nine-figure bill after the 10 schools had left the conference.
The settlement, however, does not mean WSU and OSU have been made whole financially following the collapse of the conference.
In a letter to her campus community on Thursday evening, Oregon State President Jayathi Murthy explained that “the loss of the Pac-12 media rights deal means that our financial projections for 2025 and beyond remain the same, and conference revenues alone cannot make up the more than $40 million annual gap in OSU Athletics funding caused by the departing universities.”