College Football Realignment: A Look at the Pac-12 Lawsuit

College sports generally operate within athletic conferences, in which teams primarily play other members of that conference.[1] A school’s conference membership can bolster its reputation and name recognition, leading to positive outcomes such as increased admissions applications.[2] Recent developments in college football led to major shifts in conference membership and left Washington State (“WSU”) and Oregon State (“OSU”) in danger of being stranded without a conference.[3] These two schools turned to contract law to help save their prestige position in college sports, and won a pivotal lawsuit regarding their future conference status.[4]

Background

Television revenue and network deals have contributed greatly to recent conference movement. The Supreme Court has recognized that for networks and universities, college football represents a unique product, with respect to other broadcasted sports.[5] It states that college football distinguishes itself by carrying with it an “academic tradition” not found in other sports.[6] It features century-old rivalries built on pure spite, where the winner can take home trophies like Paul Bunyan’s Ax or the Old Wagon Wheel.[7] College football is the place to see a live buffalo run onto the field or to have a pre-game “sailgate.”[8] It is also the place to hear marching bands play in complex formations or to hear students sing “Take Me Home, Country Roads,” as West Virginia students have done after every home win since 1971.[9] It is no surprise then, that the broadcast of this sport has generated billions of dollars and considerable turmoil over the distribution of that money.

Prior to 1984, the National Collegiate Athletic Association (NCAA) regulated the appearance of college football teams on national television.[10] The NCAA wished to avoid oversaturation of college football, and to preserve the uniqueness of the sport.[11] As a result, only a limited number of games appeared on television.[12] In 1984, the Supreme Court found the NCAA’s broadcast plan violated the Sherman Antitrust Act, allowing schools and athletic conferences to negotiate network deals.[13]

This wider market eventually led to the current model of conference-based television deals.[14] Schools enter a contract, known as a grant of rights, which assigns a school’s television rights to a particular conference.[15] Networks then negotiate with the conferences to broadcast their member school’s games for a percentage of television revenue.[16] Because networks deal with conferences for the most part, conference membership matters and schools want to enter into a more visible and lucrative conference.[17] The emphasis on conference membership led to the rise of five conferences known as the Power Five: the SEC, Big 12, Big Ten, ACC, and Pac-12.[18] Membership in a Power Five conference means more prestige, more television revenue, as well as more advantages during recruiting and the postseason.[19]

Originally founded in 1915 as the Pacific Coast Conference, the Pac-12 consists of the University of Washington, Washington State University, the University of Oregon, Oregon State University, the University of California, Berkeley, Stanford University, the University of Southern California, the University of California, Los Angeles, the University of Arizona, Arizona State University, the University of Utah, and the University of Colorado, Boulder.[20] The Pac-12, also known as the conference of champions, has enjoyed considerable academic and athletic success- winning more NCAA championships than any other conference.[21] In addition, almost all universities in the conference enjoy membership in the prestigious Association of American Universities (“AAU”) and high positions in press rankings.[22] Increasingly, however, the Pac-12 suffered from a rise in revenue disparity between the big conferences.[23] In 2007, the Big Ten Network launched and provided a major boost in revenue to the Big Ten conference.[24] This plus strategic expansion and consistent athletic success gave the Big Ten a significant revenue advantage and separated it and the SEC from the other three power conferences.[25] This disparity coupled with the Pac-12’s lack of expansion, put the Pac-12 in a precarious position.[26]

The Lawsuit

On August 4, the Pac-12 got an expiration date when five schools announced their intention to leave the conference.[27] This came after USC, UCLA, and Colorado had already announced their intentions to leave, and was followed soon after by Stanford and California’s departure announcement on September 1.[28] This meant that Washington State and Oregon State were set to become the only remaining Pac-12 members on August 1, 2024. NCAA bylaws dictate that a conference cannot exist with less than eight members, creating a predicament for WSU and OSU.[29] Not long after this exodus, WSU and OSU filed a complaint against the Pac-12 in Whitman County, Washington.[30] The complaint alleged that the departing schools breached the conference’s bylaws and that without court interference, would vote to dissolve the Pac-12 and leave WSU and OSU in an unenviable position.[31]

The Pac-12 bylaws, a set of rules that act as a contract for member schools, state that:

“No member shall deliver a notice of withdrawal to the Conference in the period beginning on July 24, 2011, and ending on August 1, 2024; provided, that if any member does deliver a notice of withdrawal prior to August 1, 2024, in violation of this chapter, the Conference shall be entitled to an injunction and other equitable relief to prevent such breach…even if the member is then a member of another conference or an independent school for some or all intercollegiate sports competitions. Additionally, if a member delivers notice of withdrawal in violation of this chapter, the member’s representative to the [Chief Executive Officers] Group shall automatically cease to be a member of the CEO Group and shall cease to have the right to vote on any matter before the CEO Group.”[32]

Using the bylaw language, WSU and OSU argued that the other schools have violated the agreement and so shall not participate in the CEO group.[33] This would give WSU and OSU sole control of the Pac-12 and its remaining $42.7 million in assets, which would give them significant aid in either rebuilding the conference or awaiting membership in another conference.[34]

  The University of Washington (“UW”), along with the other nine departing schools, filed a motion to intervene in the case.[35] The motion argued that the schools did not in fact violate the bylaws, because they merely announced an intent to withdraw after August of 2024.[36]  This interpretation would allow the departing schools to remain on the CEO board and dissolve the conference, which would distribute the $42.7 million among all twelve schools.[37] They further argued that a court should defer to the Pac-12’s own interpretation of its rules, like how courts will defer to a legislature’s conduction of its own internal processes.[38] With multi-state entities like the NCAA and Pac-12, state courts do generally defer to the institution’s own bylaws, with certain exceptions.[39] One prominent exception would likely apply here—an issue of contract law.[40] Under this exception, the court would refer generally to contract law in the state of Washington.

  A key piece of contract law for this case? Restatement Rule 201, was adopted by Washington state and  governs what happens when parties apply different meanings to the same part of the contract.[41] According to Rule 201, the court looks at the meaning parties attached to the contract at the time of formation, and whether a party had reason to know of any different meaning attached by the other or whether any actions manifest a different meaning.[42] WSU and OSU argued that the bylaws have a clear meaning—schools that provide a notice of withdrawal prior to August 1, 2024, have violated the agreement, and no longer can participate in CEO group meetings. As mentioned, UW and the rest of the Pac-12 argued the terms meant that any team withdrawing before the date is in violation, not a team merely providing a notice of withdrawal.[43] But whose meaning would control? An important piece of information here comes from the fact that when USC, UCLA, and Colorado left the conference, they expected to be—and were in fact removed from—the Pac-12 board. In fact, the commissioner of the Pac-12 stated to the San Francisco Superior Court that USC and UCLA had left the board after announcing their departure from the conference.[44] Because of the actions of past departing schools, UW and other departing schools likely knew or had reason to know what meaning WSU and OSU would attach to the contract terms. WSU and OSU would not have expected other schools to attach a different meaning to the terms, and so under 201, their meaning would control.[45]

  The judge agreed with WSU and OSU.[46] In a November 14 ruling, the Whitman County Superior Court granted a preliminary injunction against the departing schools.[47] This gives WSU and OSU control of the board and the conference’s remaining assets.[48] The ruling still allows UW and other departing schools to sit in on board meetings and make sure no unfair dealings occur.[49] All voting decisions, however, will come solely from WSU and OSU.[50] In his ruling, the judge also sent a warning to other conferences who might face similar disputes.[51] He noted that the Pac-12’s lack of dispute resolution provisions in the bylaws as a factor that caused unnecessary grief to the schools in this situation.[52]

Implications

Besides inviting other conferences to reexamine their bylaws and grant of rights, this ruling provides a much-needed life raft to WSU and OSU. Alternative methods of conference stability had proven fruitless for the northwestern pair. The schools leaving the Pac-12 timed their exit to coincide with the expiration of the conference’s current grant of rights, releasing them from obligation to the Pac-12 and eliminating a potential method of maintaining the conference. So far, no other Power Five conferences have given any indication of adding WSU or OSU. Even some state actors have attempted to keep schools of the same state together and thereby promote state interests and maintain rivalries—the state legislatures of Washington and Oregon both proposed bills to require their state’s top college football programs to play in the same conference.[53] Neither bill gained any traction.[54] The University of California Board of Regents considered blocking UCLA’s move, but instead conditioned the exit on paying a subsidy to UC Berkeley.[55] None of these efforts provided much hope for WSU and OSU, turning them to the court system for a remedy.   

Gaining control of the Pac-12 and its assets puts WSU and OSU in an interesting position. As stated, NCAA bylaws dictate that a conference must have at least eight members to exist.[56] However, the bylaws also create a grace period of two years from the date the conference drops below eight members in which the conference can still validly operate.[57] WSU and OSU could therefore exist by themselves as the Pac-12 until 2026 while they look for a more permanent solution.

Merging with the Mountain West Conference (“MWC”) presents the most readily apparent solution. The MWC represents the only remaining conference with a base of schools purely in the western United States and has already made offers to WSU and OSU.[58] However, both WSU and OSU wish to maintain Power Five program status, a goal likely not met by joining the MWC or by rebranding the MWC as the Pac.[59] The fact that the two schools are now looking into a scheduling alliance, and not a merger with the MWC supports this.[60] Adding two Power Five schools to a non-Power Five conference would likely not elevate the Pac/MWC hybrid to Power Five status because of the relative depth of the conference and its television market locations. This means the current dynamic would shift to a Power Four Conference situation without WSU and OSU. Losing Power Five status would likely constitute a significant loss to the school’s recruiting ability, overall athletic program, overall image, and even to the towns they reside in.[61] Pullman, WA and Corvallis, OR hold populations of around 32,000 and 59,000, respectively, and the universities and their athletics programs contribute significantly to the local economies.[62] The schools also know significant viewership and value comes from consistent, high-profile opponents found in Power Five play and in preserving in-state rivalry games.[63] Having a $42.7 million nest egg could allow the two to survive until the next round of realignment or even make a more convincing offer to another conference. If they do rebuild the Pac-12, this ruling could also better position them for a possible eventual shift back to regionality in conferences. As the burden of constant, cross-country travel on student-athletes and institutions more fully manifests itself, the existence of a prominent west coast athletic conference could once again become very attractive to certain institutions.

[1] See generally NCAA, https://NCAA.com (last visited Nov. 12, 2023).

[2] Mark T. Wilhelm, Irrevocable but Unenforceable? Collegiate Athletic Conferences’ Grant of Rights, 8 Harv. J. Sports & Ent. L. 65, 79 (2017).

[3] Anne M. Peterson, Oregon State and Washington State Face Uncertainty in What’s Left of the Pac-12, AP News (Sept. 1, 2023, 2:47 PM), https://apnews.com/article/oregon-state-beavers-washington-state-cougars-pac12-acc-realignment-6efe8a00222569a431daeb6154f80b17.

[4] Jon Wilner, WSU, OSU Sue Pac-12 Over Control of Assets, Voting Rights, Seattle Times, (Sept. 8, 2023, 2:14 PM), https://www.seattletimes.com/sports/wsu-cougar-football/washington-state-oregon-state-take-legal-action-against-pac-12-over-control-of-assets-voting-rights; Greg Lamm, Judge Gives Last 2 Pac-12 Schools Control of Conference, Law 360 (Nov. 14, 2023, 8:18 PM), https://plus.lexis.com/newsstand/law360/article/1766733?crid=2d582a4c-6691-477b-a075-cf048002d85b&cbc=0.

[5] Nat’l Collegiate Athletic Ass’n. v. Bd. of Regents of Univ. of Okla., 468 U.S. 85, 101-02 (1984). 

[6] Id.

[7] Paul Bunyan’s Axe-Minnesota vs. Wisconsin, Gopher Sports, https://gophersports.com/sports/2018/5/21/sports-m-footbl-spec-rel-bunyan-axe-html (last visited Nov. 12, 2023).

[8] Caitlin Klask, Set Sail to the Greatest Setting in College Football, Univ. of Wash. Mag., https://magazine.washington.edu/feature/sailgating-to-the-greatest-setting/ (last visited Nov. 12, 2023).

[9] Country Roads, WVU Alumni Ass’n, https://www.alumni.wvu.edu/traditions/country-roads (Apr. 21, 2022).

[10] Case Comment, NCAA v. Alston, 135 Harv. L. Rev. 471, 472 (2021).

[11] Id.

[12] Id.

[13] Nat’l Collegiate Athletic Ass’n. v. Bd. of Regents of Univ. of Okla., 468 U.S. 85 (1984). 

[14] Andy Staples, How Television Changed College Football—and How it Will Again, Sports Illustrated (Aug. 6, 2012), https://www.si.com/college/2012/08/06/tv-college-football.

[15] Wilhelm, supra note 2.

[16] Id.

[17] Id.

[18] Staples, supra note 14.

[19] Wilhelm, supra note 2.

[20] History of the Pac-12 Conference, Pac-12 Conference, https://pac-12.com/about-pac-12#pac12history (last visited Nov. 12, 2023).

[21] Conference of Champions, Pac-12 Conference, https://pac-12.com/champions (last visited Nov. 21, 2023).

[22] Best National University Rankings, U.S. News & World Rep., (2023), https://www.usnews.com/best-colleges/rankings/national-universities. 

[23] Steve Berkowitz, SEC, Big Ten Each Top $2 Billion in Athletic Department Revenue, Outpacing Power Five Foes, USA Today, https://www.usatoday.com/story/sports/college/2023/06/14/sec-big-ten-2-billion-athletics-revenue-power-five/70313053007 (June 14, 2023, 9:05 AM).

[24] Karen Weaver, The Big Ten Network Was Created by and for Its Fans – and Turned a Profit in Less Than Two Years, Forbes (Jan. 4, 2020, 12:00 AM), https://www.forbes.com/sites/karenweaver/2020/01/04/the-big-ten-network-was-created-by-and-for-its-fans---and-turned-a-profit-in-less-than-two-years/?sh=1eb80c937212.

[25] Scott Dochterman, During Big Ten Network’s 15 Years, College Football has ‘Continued to Evolve,’ The Athletic (Aug. 30, 2022), https://theathletic.com/3539035/2022/08/30/big-ten-network-realignment.

[26] Id.

[27] Laine Higgins, The Pac-12 Melts Down, as Five More Schools Depart for Other Conferences, Wall. St. J. (Aug. 4, 2023, 10:19 PM), https://www.wsj.com/sports/football/oregon-washington-big-ten-pac-12-college-sports-6312bc5b.

[28] Thuc Nhi Nguyen, The End of USC and UCLA After Dark: 7 Things to Know About the Big Ten Move, L.A. Times https://www.latimes.com/sports/story/2022-06-30/ucla-usc-moving-big-ten-pac-12-impact-what-we-know (June 30, 2022, 7:37 PM); Jon Wilner, Stanford and Cal Moving to the ACC Following the Pac-12’s Collapse, Seattle Times (Sept. 1, 2023, 5:51 AM), https://www.seattletimes.com/sports/college-football/in-wake-of-pac-12-collapse-stanford-and-cal-appear-set-to-join-acc/. 

[29] Division Membership, NCAA (Jan. 1, 2000), https://web3.ncaa.org/lsdbi/search/bylawView?id=8838.

[30] Jon Wilner, Pac-12 Chaos: Washington State, Oregon State Take Legal Action Against the Conference Over Control of Assets, Voting Rights, Mercury News, https://www.mercurynews.com/2023/09/08/pac-12-chaos-washington-state-oregon-state-take-legal-action-against-the-conference-over-control-of-assets-voting-rights (Sept. 8, 2023, 4:31 PM).

[31] Id.

[32] Pac-12 Conference Bylaws, (2023), https://pac-12compliance.org/wp-content/uploads/2021/08/2021-22-P12-Handbook.V1.pdf.

[33] Wilner, supra note 30.

[34] Id.

[35] Nicole Auerbach, Washington Pushes to Dismiss Washington State and Oregon State’s Lawsuit vs. Pac-12, The Athletic (Oct. 9, 2023), https://theathletic.com/4946840/2023/10/09/washington-washington-state-oregon-state-pac-12-lawsuit/.

[36] Id.

[37] Id.

[38] Id.; Vander Jagt v. O’Neill, 699 F.2d 1166 (D.C. Cir. 1983).

[39] Josephine R. Potuto, The NCAA Rules Adoption, Interpretation, Enforcement, and Infractions Processes: The Laws That Regulate Them and the Nature of Court Review, 12 Vanderbilt J. of Ent. And Tech. L. 257, 270 (2010).

[40] Id.

[41] Restatement (Second) of Contracts § 201 (1981); Tanner Elec. v. Puget Sound, 123 Wn.2d 656, 674 (1996).

[42] Restatement (Second) of Contracts § 201 (1981).

[43] Auerbach, supra note 35.

[44] Jon Wilner, Pac-12 Legal Fight: In Sworn Statement in Comcast Case, Kliavkoff Admitted USC and UCLA had been Removed from Pac-12 Board, Mercury News, https://www.mercurynews.com/2023/10/12/pac-12-legal-fight-in-sworn-statement-in-comcast-case-kliavkoff-admitted-usc-and-ucla-had-been-removed-from-pac-12-board/#:~:text=Weeks%20before%20the%20Pac%2D12%27s,be%20joining%20the%20Big%20Ten (Oct. 13, 2023, 4:31 AM).

[45] Restatement (Second) of Contracts § 201 (1981).

[46] Greg Lamm, Judge Gives Last 2 Pac-12 Schools Control of Conference, Law 360 (Nov. 14, 2023), https://plus.lexis.com/newsstand/law360/article/1766733?crid=2d582a4c-6691-477b-a075-cf048002d85b&cbc=0.

[47] Id.

[48] Id.

[49] Id.

[50] Id.

[51] Id.

[52] Id.

[53] S.B. 5206, 68th Leg., Reg. Sess. (Wash. 2023); H.B. 3427, 82nd Leg. Assemb., Reg. Sess. (Or. 2023).

[54] Josh Lyle, Yes, There was a Bill to Keep UW and WSU in the Same Conference, KREM2 (Aug. 9, 2023, 11:04 AM), https://www.krem.com/article/news/verify/bill-to-keep-uw-wsu-same-conference-pac-12-big-10-washington-state-university-of-washington/293-275d6530-4581-4b8e-8083-d30dde639deb#:~:text=VERIFY-,Yes%2C%20there%20was%20a%20bill%20to%20keep%20UW%20and%20WSU,tied%20together%20in%20conference%20realignment.

[55] UCLA Big Ten Membership, Univ. of Cal. Bd. of Regents (Dec. 14, 2022), https://regents.universityofcalifornia.edu/aar/decb.pdf.

[56] NCAA, supra note 29.

[57] Id.

[58] Anne M. Peterson, Mountain West Pitched Oregon State and Washington State in Recent Weeks, AP News (Sept. 2, 2023, 12:03 PM), https://apnews.com/article/pac12-realignment-washington-state-oregon-state-mountain-west-ee54f795b45f32e442b994bceaa26952. 

[59] Nick Daschel, Jonathan Smith: Oregon Stat, Washington State a ‘Proven Product,’ Should Continue at ‘Highest Level’, Or. Live (Sept. 18, 2023, 5:38 PM), https://www.oregonlive.com/beavers/2023/09/jonathan-smith-oregon-state-washington-state-a-proven-product-should-continue-at-highest-level.html.

[60] Chris Vannini & Stewart Mandel, Oregon State, Washington State Discussing Alliance with Mountain West, The Athletic, https://theathletic.com/5068234/2023/11/16/oregon-state-washington-state-conference-future/ (last visited Nov. 21, 2023).

[61] Wilhelm, supra note 2.

[62] Kyle Bonagura, The Pac-12 Leftovers- What Will be Washington State’s and Oregon State’s Ultimate Fate?, ESPN (Sept. 26, 2023, 7:00 AM), https://www.espn.com/college-football/story/_/id/38473796/pac-12-leftovers-washington-state-oregon-state-ultimate-fate.

[63] Wilhelm, supra note 2.