State hearing highlights divergent fortunes of WSU and UW in new era of college athletics

Facing $100 million in debt and an uncertain athletics future after the Pac-12 Conference collapsed, Washington State University officials told state lawmakers Wednesday that they will channel their inner underdogs and do what ‘Cougs’ have always done: persevere.

On the other hand, University of Washington officials, flush with $30 million in new TV media money from the school’s new friends in the Big 10 Conference, assured state officials they plan to purchase Wi-Fi for all their student-athletes so they can continue their studies while flying across three time zones to compete.

The in-state rivals offered perhaps the greatest in-state contrast, one lawmaker noted, as colleges battle in the great economic pursuit of the Power Five conferences.

Staff analyst Alicia Kinne-Clawson told the Washington state Senate Higher Education & Workforce Development Committee that some 22 schools reported more than $150 million in annual revenue in 2022, according to a report by USA Today. UW came in 25th while WSU ranked 53rd.

“There is currently an arms race in college athletics and every dollar is going to matter for these institutions in order to remain competitive,” she said.

It’s a race that WSU officials acknowledged they are losing after having been left as one of two remaining members of the Pac-12 Conference.

Last year, Washington and Oregon joined UCLA and University of Southern California in leaving for the Big 10; Arizona, Arizona State, Colorado and Utah jetted to the Big 12; and California and Stanford jumped to the Atlantic Coast Conference.

Chris Mulick, WSU’s director of state relations, told lawmakers that school officials could not have conceived months ago that they would be finding themselves in a position, after 108 years in the Pac-12, to quickly make alliances with the West Coast Conference for most sports other than football, which will play under a scheduling agreement with the Mountain West Conference.

“You may ask questions today that we simply just don’t have answers to as we are left to fight for our future,” Mulick said. “At WSU, we are often thought to be the scrappy underdog, and that’s no accident. The underdog is who we were built to serve.”

He explained that WSU is a land-grant university that was part of a Civil War-era effort that intentionally placed colleges in towns like Pullman; Manhattan, Kansas; and Ames, Iowa, to provide a chance for students to earn an education away from “elites” in population centers.

“WSU Athletics has long reflected this underdog mentality without the resources of the big-city institutions, and always punching above its weight on the court and on the field,” Mulick said. “So what did we do to deserve this?

“We are being penalized for our noble land-grant mission, to serve the underserved that has placed us in communities outside the big cities with the big TV markets even though TV ratings for our football games outpace some of our departing institution. We are in this place because it is perceived we won’t make enough money for other people.”

State Sen. Jeff Holy, R-Spokane, asked Mulick about the massive amount of debt the school incurred over the past several years upgrading Martin Stadium and other athletic department facilities.

“If I recall right, the debt service is about $10 million a year. Just a simple question: Do you see a way through this in two to three years? It’s going to be an awfully heavy lift for you compared to most schools,” Holy said.

Mulick agreed. He noted that the school already has delayed other projects and is relying on revenue from parking tickets on campus to help pay off the debt.

“No question, if those dollars were unencumbered, we’d be looking at making enhancements to our residence halls and so forth,” Mulick said.

He and Brad Corbin, WSU’s senior associate athletic director, said they hope to tap into leftover Pac-12 assets after a Whitman County judge ruled that WSU and Oregon State should be able to manage what’s left of the conference.

Kinne-Clawson, the analyst, told lawmakers that it’s far from clear whether any money will remain for WSU and Oregon State after they agreed in December to a settlement with the defecting schools.

“These details are still being finalized,” she said. “This is what is at stake in that lawsuit. There are assets,” including the Pac-12 Network, its production studio and potential NCAA distribution payments, “and any reserves the conference may have.

“But it’s also important to note that the conference has significant liabilities.”

Kinne-Clawson noted that because the Pac-12 Network failed to make an agreement with DirectTV, it struggled to deliver on revenue that was promised from the contract.

School officials, however, used the projected revenue that never materialized to plan for facility upgrades that have left them in debt.

“When these media deals were signed, the institutions anticipated annual revenues nearing $20 million from the Pac-12 network alone,” she said. “Those numbers were never realized and fell at least 30% below projection for each year in the last 10 years.”

Holy asked about whether the state, and thus taxpayers, could be left with the bill if WSU can’t pay its debt.

“WSU has $100 million in outstanding institutional debt due to the operations of their athletic program,” Kinne-Clawson said. “Technically, the answer is no, the state would not be on the hook.

“But the institution obviously has debt that they will need to repay and find a way to do that.”

Corbin, WSU’s associate athletic director, said the university doesn’t know the answer.

He noted that the school expects to receive about $34 million this year, but that is subject to the current Pac-12 settlement negotiations.

“While we are in discussions with the potential media partners for next year and beyond, any distribution would be a fraction of what WSU has received in previous years,” he said. “From a financial standpoint … there are likely to be big changes ahead for WSU athletics.”

Those changes can affect recruiting, the number of fans attending games on Saturdays and how much donors are willing to support the school, Corbin said.

“I can’t look a single student-athlete in the eye and commit that we will remain a Power Five institution long into the future. I can commit that we will do everything we can to stay at that level,” he said.

Corbin also delivered a veiled dig aimed at his colleagues at Washington.

“While the national-collegiate landscape forsakes geographic common sense and are flying their teams thousands of miles across three time zones to play their conference schedule, we are dedicated to finding the right combination of high-level competition and regional scheduling,” he said.

“So, when asked what our future holds, our only answer is, ‘Who knows?’ ” Corbin continued. “We can’t have an answer today because of the position we’ve been placed in, and we are unlikely to have an answer even in a year from now.”

For their part, UW officials said they were faced with underperforming Pac-12 revenues or the chance at guaranteed money in the Big 10.

Joe Dacca, UW’s director of state relations, said the Huskies will get a guaranteed $30 million a year, which will increase by $1 million a year from 2025 through 2030, from the Big 10. UW also will be able to borrow up to $10 million a year, against future guaranteed revenues, for six years with the new conference.

Those figures don’t include an undetermined share of NCAA distributions and other conference revenues.

“This was an incredibly difficult decision,” Dacca said. “We will forever cherish the history and the tradition of the Pac-12 Conference, and we are very pleased the Apple Cup will continue into the future. At the same time, we are excited about the opportunities in the Big 10 Conference.”

Mulick, Dacca’s counterpart at WSU, said the Cougars face two years of uncertainty, but he pointed out that other opportunities may arise.

“If you are watching what is happening around the country in other conferences, you are starting to see places where we might have been 18 months ago,” Mulick said.

He noted current turmoil within the Atlantic Coast Conference even after Cal and Stanford recently joined.

“Does someone else’s misfortune create an opportunity for us? Maybe,” he said. “That’s what these next two years are about.”

As shocking as the defections that came Aug. 4 when Washington and Oregon bolted, Mulick said “more dislocation is coming.”

“The hunger games are not over. So, rather than making a snap decision … and rebuild the Pac-12 into something that is less than a power conference level, we want to be able to see the dust settle a little bit and see if there are opportunities created that we are not able to anticipate right now.

“If so, that helps us deal with our ongoing challenges and fixed costs. If not, we need to figure out a way to perform at a reduced funding level.”