Pac-12 fighting 'poaching penalty' with lawsuit

The Pac-12 filed a lawsuit in federal court Tuesday challenging the legality of a “poaching penalty” included in a football scheduling agreement it signed with the Mountain West Conference in December.

With Oregon State and Washington State scrambling late last year to fill their 2024 football schedules in the wake of the Pac-12’s collapse, they came to terms with the Mountain West on a one-year agreement that added six MWC opponents to each remaining Pac-12 school’s schedule this season.

As part of the agreement, the Mountain West included language that requires the Pac-12 to pay a fee of $10 million if a school left the MWC for the Pac-12, with escalators of $500,000 for each additional school.

“This action challenges an anticompetitive and unlawful ‘Poaching Penalty’ that the MWC imposed on the Pac-12 to inhibit competition for member schools in collegiate athletics,” the suit says. “The ‘Poaching Penalty’ saddles the Pac-12 with exorbitant and punitive monetary fees for engaging in competition by accepting MWC member schools into the Pac-12.

“The MWC imposed this Poaching Penalty at a time when the Pac-12 was desperate to schedule football games for its two remaining members and had little leverage to reject this naked restraint on competition.”

When Boise State, Colorado State, Fresno State and San Diego State announced Sept. 12 they were leaving the Mountain West for the Pac-12, there was an expectation the Pac-12 would be required to pay $43 million in fees, as outlined in the scheduling agreement. That number jumped to $55 million on Monday after Utah State also accepted an offer to leave the Mountain West for the Pac-12.

On the same day the announcements were made, Mountain West commissioner Gloria Nevarez sent an email to Scott Petersmeyer, the Pac-12’s chief legal officer, noting the Pac-12’s “obligation” to pay the $43 million within 30 days.

Pac-12 commissioner Teresa Gould responded to Nevarez’s email Tuesday to inform her of the lawsuit, noting the conference’s stance that the fees are unlawful.

“Fundamentally, these provisions seek to inhibit competition by placing exorbitant and punitive monetary fees on the Pac-12 simply for engaging in competition by accepting MWC member schools into the Pac-12,” Gould’s letter said. “As you know, the MWC imposed these improper penalties over the Pac-12’s objection at a time when the Pac-12 was desperate to schedule football games for its two remaining members and had little leverage to reject this clear restraint on competition.”

In response to the lawsuit, Nevarez released a statement Tuesday afternoon that took issue with the Pac-12’s characterization of the fees.

“The provision was put in place to protect the Mountain West Conference from this exact scenario,” she said. “It was obvious to us and everyone across the country that the remaining members of the Pac-12 were going to try to rebuild. The fees at issue were included to ensure the future viability of the Mountain West and allow our member institutions to continue providing critical resources and opportunities for our student-athletes. At no point in the contracting process did the Pac-12 contend that the agreement that it freely entered into violated any laws. To say that the Mountain West was taking advantage of the Pac-12 could not be farther from the truth.

“The Mountain West Conference wanted to help the Pac-12 schools and student-athletes, but not at the expense of the Mountain West. The Pac-12 has taken advantage of our willingness to help them and enter into a scheduling agreement with full acknowledgment and legal understanding of their obligations. Now that they have carried out their plan to recruit certain Mountain West schools, they want to walk back what they legally agreed to.”

The lawsuit also noted the roughly $18 million in exit fees each of the departing schools will be required to pay the Mountain West.

“To the extent the MWC would suffer any harm from the departures of its member schools, these exit fees provide more than sufficient compensation to the MWC,” the lawsuit says. “There is no reason why the schools’ new conference should be responsible for compensating the MWC further, or why such penalties should apply to only one competitor conference: the Pac-12.”

Negotiations between the Pac-12 and Mountain West this summer to extend the scheduling agreement for the 2025 season ended with a significant gap between what the Mountain West wanted and what the Pac-12 was willing to pay.

“The conferences’ negotiations broke down after the MWC demanded $30 million from the Pac-12 for the 2025- 2026 season, more than double the already exorbitant price the MWC charged the Pac-12 for games during the 2024-2025 season,” the lawsuit said. “After the parties were unable to reach agreement in the face of the MWC’s financial demands, the MWC Commissioner broke off further discussions, stating, ‘I think we have to move on.'”

With both conferences at seven schools — starting with the 2026 season — more movement is inevitable, as the NCAA requires a conference to have eight football-playing schools. UNLV is on the proverbial clock having reaffirmed its commitment to the Mountain West on Monday, only to back away from that commitment upon learning Utah State was leaving for the Pac-12.