How the Pac-12's assets complicate Oregon State, Washington State's future

There’s a high probability that the Pac-12’s leftovers – Oregon State and Washington State – will be playing in the same league as Mountain West Conference schools in a year.

What that league will be called is anyone’s guess.

The departure of eight Pac-12 schools this summer – four to the Big 12, two to the Big Ten and two to the ACC – has left behind the two Pacific Northwest schools to turn off the lights on the 108-year-old conference. But unless a relatively straightforward MWC expansion ensues, this realignment – or reverse merger – is laden with complexity. 

Two big questions: Just how deep is the Pac-12’s trove of assets? And how can Oregon State and Washington State best position themselves to retain as much as possible? When MWC Commissioner Gloria Nevarez recently told On3, “Everything is on the table,” that wasn’t a platitude – it was an on-point assessment of a complex chessboard. 

First, a so-called reverse merger between the MWC and Pac-12 is in play. The Pac-12 name carries significant relevance and value. It may behoove the league to bear the Pac-12 brand. 

Nevarez knows this as well as anyone. She grew up in the Bay Area. She also attended Berkeley Law School. Plus, Nevarez worked in the Pac-12 office.

Asked by On3 about the importance of the MWC retaining its name, Nevarez said: “Both brands are really strong. And let me just say it breaks my heart. This is a 108-year-old league … People could argue brand strength, but I think it [Pac-12] has an incredible brand. So, that to me is an asset. But again, it’s part of the greater calculation of assets and liabilities and what is there and what isn’t.”

What’s also there? Tens of millions of dollars in NCAA tournament financial units owed to the Pac-12 over the next six years.

If a school leaves a conference to join another league – and the former conference remains operational – the Basketball Performance Fund units previously earned by the school remain with the former conference. But if a conference notifies the NCAA that it has ceased operations, “each institution retains the units it earned in the performance fund,” the NCAA’s revenue distribution plan states. 

In terms of the Equal Conference Fund – dollars distributed to Division I conferences that participate in the tournament – if a conference notifies the NCAA that it has ceased operations, “no revenue will be distributed to that entity,” according to the NCAA revenue distribution plan.

‘No magic bag of money’ for Pac-12 leftovers

So, will the Pac-12 formally cease operations next summer? How diligently will OSU and WSU work to keep the league’s lights flickering? The only guarantee: Plenty of billable hours for attorneys. 

Another asset that warrants consideration: The Pac-12’s emergency reserve fund (financial balance unclear).

Overall, an MWC membership would likely mean the two schools would receive more than $7 million apiece annually in total revenue (media rights, NCAA tournament, College Football Playoff distribution) versus four or five times that amount in the traditional Pac-12, which is now gone.

Nevarez said it would feel like a “missed opportunity” if the MWC doesn’t add Pac-12 schools during this realignment round. All signs clearly point to MWC schools and the remaining Pac-2 playing in the same league. But what that league is called remains to be seen.

Washington State President Kirk Schulz, who circled Oct. 1 as a soft deadline for resolution, told Pac-12 insider John Canzano: “There’s no magic bag of money sitting beneath the president’s desk where you can reach in and pull cash out.”