The departing members of the Pac-12 will leave behind $65 million to the conference, based on the terms of a negotiated settlement ratified late last month.
But over time, their financial obligations could extend well beyond that figure, based on information provided by the lead court attorney for the two remaining schools.
Eric MacMichael, who represented Washington State and Oregon State in their lawsuit against the 10 departers, told the Hotline that exposure to potential liability shaped the legal strategy — not only in a courthouse in Whitman County, Washington, but also in private discussions with a mediator. .
“We were very aware of the responsibilities the conference faced,” MacMichael said. “Ensuring that liabilities were addressed was a guiding principle in our approach to a fair settlement.”
What are the specific responsibilities the conference faces?
An article of the negotiated agreement reads:
” Discharge of responibility. Unless otherwise provided in article 2.b, outgoing members are released from any liability arising from decisions taken by the board of directors which do not require ratification.
Section 2.b includes nearly four pages of redactions – a move intended, in part, to protect schools from unresolved legal challenges. In other words, they don’t want opposing lawyers to see their playbook.
A confidentiality agreement prevents MacMichael from discussing certain details, including redacted responsibilities.
However, MacMichael was able to address, in general terms, the main legal threat facing the Pac-12 and its power conference peers:
THE Home vs. NCAA case, which he called “existential” for the NCAA.
Filed in 2020 by former ASU swimmer Grant House, the antitrust suit seeks to compensate thousands of former athletes for the use of their name, image and likeness (NIL) over a period of years before the summer 2021, when NIL became law. of the field in college athletics.
The plaintiffs sought $1.4 billion in damages from the NCAA and its universities, according to court documents reported by USA Today. But the price tag soared in November when U.S. District Judge Claudia Wilken granted the case class-action status.
It’s an armageddon for the NCAA and the Power Five leagues, which are named as defendants: with damages tripling in class actions, the bill could exceed $4 billion.
The case is expected to go to trial in January. But several industry experts interviewed by Hotline in recent months believe the problem will be resolved.
“There is no chance of this going to court,” a source said. “But there are a lot of things to sort out.”
This sorting includes ways the NCAA and Power Five conferences would pay for damages.
After all, schools are conferences, and no one has $4 billion in the bank.
(One option: use future revenue from media contracts and spread the payments over time.)
The last thing Washington State and Oregon State want as a two-team conference in 2025-26 is sole liability for the Pac-12’s entire share of damages, which it whether it’s a million dollars, 100 million dollars or half a billion.
“The House case was at the center of our thinking,” MacMichael said.
“We had to solve this problem. This is an existential case for the NCAA and all (named) conferences.
“And I don’t think this is going to be resolved in the immediate future.”
Schools that leave will have a portion of their distributions withheld this spring as part of the settlement.
Their last day of membership is August 1st.
But their financial obligations to Washington State and Oregon State may not be resolved for years. And based on MacMichael’s comments, the cost is likely to exceed $65 million.
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