Judge Denies Mountain West Motion to Dismiss Pac-12 Lawsuit
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The latest episode in the Pac-12 Conference & Mountain West Conference courtroom soap opera aired yesterday.
Specifically, The United States District Court for the Northern District of California has denied the Mountain West’s motion to dismiss the Pac-12’s lawsuit against it. Potentially, the case can now proceed to trial.
In her ruling, judge Susan van Keulen stated that the Mountain West’s lawyers misread the Sherman Antitrust Act: “Although the Pac-12 agreed to the terms of the Scheduling Agreement, it has alleged that it was ‘desperate’ and ‘had little leverage’ at the time it entered into an agreement. ‘To hold that a contract is exempt from antitrust scrutiny simply because one party reluctantly accepted its terms’ would be to misread section 1 of the Sherman Act, which reaches ‘every contract’ that unreasonably restrains trade”.
Further, van Keulen deemed that the Mountain West’s poaching penalty would weaken the Pac-12 in an unfair way: “if enforced, the Poaching Penalty threatens the Pac-12’s ability to compete against the MWC and other conferences” … paying $55 million to the MWC as a penalty for recruiting five of its member schools - conduct in which athletic conferences, including the MWC, regularly and fairly engage - would significantly deplete the Pac-12’s resources to recruit additional schools and rebuild”.
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It should be noted that the court’s decision does not end this legal scuffle between the two beleaguered conferences - it merely denies the Mountain West’s motion to dismiss the lawsuit - and now these opposing sides face a fork in the road: attempt mediation once again, or take the lawsuit to trial.
While the Pac-12 may feel determined to try their luck in a courtroom, the Mountain West has some incentive to settle: after losing five member schools to the Pac-12, the remaining Mountain West members signed a Grant of Rights last Fall, which promised significant portions of the poaching fee revenues (24.5% apiece) to Air Force and UNLV, in an effort to keep them from leaving the conference.
The poaching fee at stake, initially $43 million, ballooned to over $55 million dollar after the Pac-12 extended a bid to Mountain West member Utah State last Fall. If a trial rules against the Pac-12, those fees would be a financial windfall for remaining Mountain West members. While the Mountain West's future media rights are still being negotiated, their current media rights deal promises $5.3 million annually to Boise State, and $3.5 million annually to the other members. Conversely, if a trial rules in favor of the Pac-12, the Conference of Champions could hypothetically use the freed-up 55 million dollar poaching fee to buy out The American member schools like Memphis or UTSA in an expansion bid, costing an estimated $27.5 million per school.
Judge van Kuelen set a case management conference for November 18th, where she will meet with lawyers representing the two sides. In addition, a separate lawsuit involving Mountain West departees Boise State, Colorado State, and Utah State is still ongoing.
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Matt fell in love with radio during his college days at Oregon Tech, and pursued a nine year career in sports broadcasting with Klamath Falls' and Medford's highest-rated sports radio stations. He currently lives in McMinnville wine country and is excited to talk about the Beavers again.