The Pac-12 filed a lawsuit against the Mountain West on Tuesday taking aim at a pricey "poaching fee." The suit, filed in the Northern District of California, alleges that the potential penalty is unenforceable under antitrust law.
When the Pac-12 entered a scheduling agreement with the Mountain West last year, the MWC added the poaching fee as a poison pill should the Pac-12 try and take schools from the league. As part of the agreement, the Pac-12 is required to pay more than $10 million per school in damages, which are separate from the $17 million exit fee that schools must pay.
In previous weeks, the league has added five schools from the Mountain West: Boise State, Colorado State, San Diego State, Fresno State and Utah State -- which officially accepted its invitation to join the league Tuesday evening. Under this agreement, the Pac-12 would owe more than $50 million before even taking into account exit fees from each schools.
"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," the Pac-12 wrote in its filing. "But that does not make the poaching penalty any less illegal, and the Pac-12 is asking the court to declare this provision invalid and unenforceable."
Mountain West commissioner Gloria Nevarez released a statement responding to the lawsuit. She contends that not only was the poaching penalty valid, it was a the core of the MWC's scheduling agreement to help the two remaining Pac-12 schools.
"It is my responsibility to protect the conference and always keep its best interests in mind," Nevarez's statement read. "The Pac-12 Conference is challenging a contractual provision that it expressly agreed to and acknowledged was essential to the Mountain West Conference's willingness to enter into a Scheduling Agreement, all while advised by sophisticated legal counsel. The provision was put in place to protect the Mountain West Conference from this exact scenario. 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. There has to be a consequence to these types of actions."
The poaching penalty is scheduled to run through at least Aug. 1, 2027. The timing is unusual as the Mountain West's television contracts are scheduled to expire in 2026. Additionally, the Pac-12 is required to add schools to reach the minimum eight participants to be recognized as a FBS conference by 2026. With the five Mountain West additions, the league is at seven. The Mountain West is also at seven schools after the moves.
While the lawsuit is spurred by significant monetary responsibilities, the strategy is bigger than the payout. The next round of realignment hinges on UNLV's decision to either stay in the Mountain West or jump to the Pac-12. Simply put, the Rebels might want to be on the side that is suing rather than being sued. UNLV previously planned to commit to the Mountain West, but after Utah State's departure brought the league down to seven continuing members, all options are back on the table. Both leagues need UNLV to reach the NCAA minimum of eight teams.
"I don't see why UNLV would stay in the Mountain West now," sports law attorney Mit Winter told CBS Sports.
UNLV is trying to determine its best course of action after being a Mountain West member since 1999. The MWC was formed that year after the breakup of the 16-team Western Athletic Conference. The Pac-12 would owe UNLV $12.5 million for being the sixth school poached from the MWC.
Poaching fees based on Pac-12/MWC agreement
- First team -- $10 million
- Second team -- $10.5 million
- Third team -- $11 million
- Fourth team -- $11.5 million
- Fifth team -- $12 million
- Sixth team -- $12.5 million.
The Pac-12 signed this agreement in good faith -- similar to Florida State and Clemson signing the ACC grant of rights, twice, before suing the conference.
"They're [Pac-12] basically claiming they had no choice, they were under duress," Minter said. "Their best argument might be that it's an unenforceable penalty. When you have a liquidated damages clause like that, it can't be unreasonable or otherwise it's considered an unenforceable penalty."
"The deal they [Pac-12] signed, part of it is illegal," Winter added. "That's an argument people make a lot."
The remaining Pac-12 schools -- Oregon State and Washington State -- and the Mountain West entered into a scheduling agreement before the 2024 season in order to help create a slate for the two stragglers. The other 10 legacy members of the Pac-12 ultimately joined power conference leagues. As part of the agreement, the Pac-12 schools paid the Mountain West $14 million for 12 games.
The agreement had a second-year option available, but both schools had to opt into the agreement. Ultimately, the opt-in period passed without an extension. According to the filing, the Mountain West demanded $30 million to extend the contract. The lawsuit alleges that Oregon State and Washington State essentially signed the agreement under duress despite believing that the poaching fee was unenforceable because it had such little time to pull together a full schedule.
"There is no legitimate justification for the 'poaching penalty,'" the complaint said. "In fact, the MWC already seeks to impose tens of millions of dollars in 'exit fees' on MWC schools that depart from the conference. 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."
Historically in the realignment era when exit fees are contended by one party, the two sides settle for approximately 65%. This is believed to be the first time one FBS conference has sued another in realignment. There were threats of tortious interference when the Pac-12 and SEC were going after Big 12 schools during the 2010 realignment era, but it never reached this point.
