Could Pac-12 survive after all? Oregon State, Washington State hope so with legal move

Oregon State president Jayathi Murthy and athletic director Scott Barnes say all options remain viable in a future path for OSU and Washington State athletics, including participating as a two-school conference next fall in an effort to preserve the Pac-12.

Though not the most ideal option, Barnes said that a two-team Pac-12 is “doable.” The Pac-2, in this case, would be recognized as a conference by the NCAA because of the association’s two-year grace period, something that provides “options” for the league going forward, said Washington State athletic director Pat Chun.

Murthy, Barnes and Chun spoke to Yahoo Sports on Friday after the two schools, left without a home after the breakup of the Pac-12, filed suit against commissioner George Kliavkoff and the 10 outgoing universities in an effort to control the governance of the conference and potentially preserve the league moving forward.

Murthy, who celebrates her one-year anniversary as Oregon State’s president on Saturday, says rebuilding the Pac-12 remains one of several options. Others include joining the Mountain West Conference, or an unusual merger with the full membership of the MWC, whereby a 14-member league would operate under the Pac-12 brand and potentially retain its assets. Yahoo Sports detailed the options in a story three weeks ago.

Rebuilding the Pac-12 will “not be an easy thing to do,” she said, “but this is a really important decision for us. We are looking at every single option.”

Rebuilding the Pac-12 would potentially retain the league’s brand and assets as well, most notably the Autonomy Five legislative status, impending NCAA tournament basketball revenue shares, bowl contracts and revenue from the College Football Playoff as a Power Five league.

The NCAA requires eight members to be recognized as an FBS conference, but allows a two-year grace period. According to NCAA bylaw, a conference shall continue to be considered an FBS league for two years after it drops below the eight-team threshold.

“It’s given us some optionality,” Chun said. “That one grace period provides some options.”

Could Pac-12 survive after all? Oregon State and Washington State hope so with their lawsuit against the conference. (AP Photo/Ralph Freso, File)
Could Pac-12 survive after all? Oregon State and Washington State hope so with their lawsuit against the conference. (AP Photo/Ralph Freso, File)

It was at first thought that the league would lose two designations, one from the NCAA and one from the CFP: (1) the Autonomous Five governance status that grants it more authoritative powers in rule-making; and (2) the Power Five status with the CFP that grants those leagues more revenue in the playoff distribution model — a significant haul of cash.

However, given NCAA bylaws, the conference may potentially keep the A5 legislative powers at least over the two-year grace period.

The CFP is a more complicated issue. The CFP’s top governance board is made up of 11 members — one president from each FBS conference and Notre Dame’s president. That includes Washington State president Kirk Schulz. A decision on a change to the CFP revenue-distribution model is believed to need unanimous support.

As for the NCAA tournament cash, each conference receives monetary units based on how many games a team from that league played in the event. It is a rolling six-year system, meaning that the Pac-12 has units of pay coming from teams, even those leaving, that participated in the last six NCAA tournaments.

The league is owed at least $50 million in NCAA shares, officials said. That number is likely to increase with this year’s tournament results.

While she acknowledged that a two-team Pac-12 would be “odd” and cause scheduling issues, Murthy says the two schools continue to examine all possibilities. Given the NCAA’s grace-period clause, the conference would have until 2026 to increase its membership to eight schools.

Meanwhile, conversations with the Mountain West and commissioner Gloria Nevarez have been “really good,” Murthy said. “She’s phenomenal. We’ve had frank and deep conversations.”

However, all of the options are contingent on the Pac-12’s assets and liabilities, which remain a murky issue. The league has not fulfilled all requests for information from the two schools, OSU administrators say. Pac-12 chief financial officer Morane Kerek has only been on the job for six weeks and so “there are challenges around that,” Murphy said.

Barnes says information from the league office went from “non-existent to a trickle” lately.

“It’s taken way more time than we wanted,” he said. “We need more clarity and expedited information to make informed decisions.”

Their suit, filed in Washington State’s backyard of Whitman County, requests a temporary restraining order to prevent the departing Pac-12 members from having a vote on the Pac-12 board of directors, made up of the league’s presidents. Citing the Pac-12 bylaws, Oregon State and Washington State contend that those schools forfeited their position on the board once they exited the league.

A hearing has been set for Monday.

OSU and WSU are seeking a declaratory judgment from the court on the claim that they now constitute the entire voting membership of the Pac-12, giving them authority over governance, business decisions and the league’s remaining assets.

The suit stems from recent communication between Kliavkoff and Schulz, the chair of the Pac-12 board. Kliavkoff scheduled a meeting Wednesday with current and former Pac-12 schools about moving forward with a “governance approach,” which is in violation of the Pac-12 bylaws, the schools say. The temporary restraining order seeks to prevent this meeting or similar action.

Key decisions from the board normally require 75% of support from the group. If the outgoing members are allowed to hold authority on the board, they could form a voting bloc against Oregon State and Washington State. The fear is that the outgoing members will make a decision on the future of the conference that negatively impacts the two schools, such as dissolving the league.

OSU and WSU are serious about keeping alive the Pac-12. But it won’t be easy. It is fraught with problems, most notably is the attractiveness of joining two schools that:

- do not have a television rights deal.

- have a commissioner who is unlikely to continue in the long term.

- are saddled with legal and other challenges, including the NLRB employment claim; lawsuits from the Holiday Bowl and two former employees; the House case for retroactive NIL pay; more than $50 million owed to Comcast for an accounting error; and lease payments for the newly opened Pac-12 Network studio.

With help from consultant Oliver Luck, Oregon State and Washington State have vetted several potential additions in the Mountain West and American Athletic Conference, but it’s unclear how interested the targets are in joining a two-team conference.

A merger with the MWC that brings all schools under the Pac-12 brand is an intriguing option. Nevarez has publicly expressed openness to a variety of options, including acquiring the schools as new MWC members or a merger of some kind. She presented an expansion proposal to the leagues over the last two weeks.

However, Nevarez and MWC officials are hesitant in a merger without knowing the full scope of assets and liabilities from the league — the same qualms that exist with both WSU and OSU.

“We don’t have all the information we need,” Chun said. “We are in a very important exercise trying to ascertain the assets and liabilities of the conference. We need transparency to do that.”

If not a merger, the cost in rebuilding the Pac-12 could be significant because of exit fees. The American Athletic Conference requires a 27-month notice for exiting schools. Those leaving inside that timeframe owe the conference an exit fee. While the exit fee is negotiable with conference leaders, schools have previously left for $15-18 million. The cost could be significantly higher since schools would be giving notice inside of a year.

The MWC's exit fee is $34 million to leave for the 2024 season. It drops to $17 million for 2025 if schools give notice before July 1.