It took three months to dot the proverbial ‘i’s, but the negotiated settlement between the Pac-12’s remaining schools and the departing members was finalized Monday with signatures, public statements and a heavily redacted document.
There were no surprises in the sections visible to the naked eye.
Each of the 10 outgoing members will have $6.5 million withheld from their conference distributions (in installments) over the remainder of the calendar year, leaving behind a pot of $65 million for Washington State and Oregon State.
The Cougars and Beavers also are entitled to all NCAA Tournament revenue paid out in future years, including the money earned by departing schools, as well as the distributions from the Rose Bowl and College Football Playoff.
The total assets should land in the $250 million range — enough for the Cougars and Beavers to fund athletic operations and potentially rebuild the conference during the two-year grace period allowed by the NCAA. (Starting with the 2026 football season, the Pac-12 must have at least eight members.)
“We are pleased to have reached a fair and equitable settlement with the 10 departing schools that will set the Pac-12 Conference on a path toward future success,” WSU and OSU offered in a joint statement released Monday. (The settlement was originally announced in December.)
What did the outgoing schools receive?
They have voting rights on conference matters that impact the 2023-24 budget in a material way, defined as “any deviation reasonably likely to result in increased Conference costs or expenses or reduced Conference revenue, in each case in an amount greater than two percent (2%).”
The 10 departing members also retain the rights to their intellectual property (audio, video and other archival material) but will license the material back to the conference in a “perpetual, non-exclusive, gratis, royalty-free, fully-sublicensable or assignable license” manner. (See the full settlement below.)
In other words, the Pac-12 will be able to show highlights of Bill Walton playing for UCLA even though the Bruins are in the Big Ten.
Another provision designed to protect the outbound schools: If the conference dissolves before August 2026, all 12 members will share the remaining assets, thus ensuring WSU and OSU cannot turn out the lights and keep all the assets for themselves.
“We are pleased to finalize an agreement with OSU and WSU that provides support for all our student-athletes while ensuring an equal distribution of the vast majority of funds earned by all 12 schools during the 2023-24 academic year,” the outbound schools stated.
So rejoice, folks, because everybody’s “pleased.” It only took six months and hundreds of billable hours across 12 campuses and six states to get there.
But in our view, two of the settlement’s most important elements aren’t even visible:
— The first is the manner by which the schools plan to handle liabilities that will range from modest, like former commissioner George Kliavkoff’s contract settlement, to massive.
How massive?
The Pac-12 and the other power conferences are named defendants in a class-action antitrust lawsuit against the NCAA. Scheduled for trial next winter, the House case could carry billions in damages. Even if there’s a settlement, the bill will be enormous.
How will the schools handle the Pac-12’s legal liabilities? Will the departing members cover a share of the damages?
Section 14 of the settlement, titled “Confidentiality,” refers to a series of redacted sections that presumably address the liabilities:
“The Parties agree that the disclosure of this information would cause substantial competitive harm to the Conference and each of the Schools, would prejudice the Conference’s and each of the School’s respective or joint defenses of active and potential litigation matters, and would violate the vital joint interests of the Parties in the defense of litigation.”
Put another way: The schools don’t want the plaintiffs to see their defensive playbook.
— The second unseen element is not part of the redacted material. In fact, it’s not included anywhere.
It’s the settlement’s impact on Washington State and Oregon State as they fight for survival.
The 31-page document is their lifeboat.
Without it — without the revenue it guarantees and the protections it provides — the ‘Pac-2’ schools would not have control of their future.
“So much of the case is wrapped up in the changing landscape of college sports,” said a source familiar with the agreement. “The (settlement) allows them to keep their options open.”
Since Sept. 1, when Cal and Stanford agreed to join the ACC and left the Cougars and Beavers alone in open water, the ‘Pac-2’ schools have masterfully plotted and executed a strategy.
They secured control of the conference and the rights to future assets worth hundreds of millions.
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They entered into a football scheduling agreement with the Mountain West and placed their basketball teams and Olympic sports in the West Coast Conference as affiliate members.
They took perhaps the worst hand in the history of college sports and did not fold — all while remaining free to explore their options and prepare for multiple outcomes.
They are not bound to anything or anyone beyond the spring of 2026.
By then, college sports as we know it might not exist.
The ACC could crumble, sparking massive realignment.
Athletes could be declared employees, their salaries paid by the schools.
A football super league could be in the works for the 20 or 30 heavyweight programs, leaving all others on a second tier with Washington State and Oregon State.
Nobody knows exactly what’s coming, but everybody knows something’s coming.
WSU and OSU “are as well positioned as anyone could have hoped for universities facing these circumstances,” the source said.
And the settlement agreement announced Monday, 200 days after WSU and OSU first filed the lawsuit, is their sustenance.
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