Washington State, Oregon State finalize settlement with departing Pac-12 schools

As the final March Madness in the history of the fully formed Pac-12 Conference plays out, the league’s two remaining schools – Washington State and Oregon State – finalized their long-awaited settlement with the conference’s 10 departing members.

The news punctuates what was a protracted, often contentious legal tussle between the remaining Pac-2 members and the schools that will formally leave this summer for the Big Ten, Big 12 and ACC, respectively.

On Dec. 21, the Pac-2 and departing schools reached a settlement that entailed the 10 schools forfeiting a portion of revenue distributions over the remainder of the 2023-24 academic year. 

As the settlement stipulates, the conference will withhold $5 million from the fiscal year 2024 distributions to each of the departing members, longtime Pac-12 insider Jon Wilner reported. That amounts to $50 million in withheld distributions. 

The breakdown: $1 million will be withheld from each departing member’s first fiscal year distribution; $2 million from each member’s April distribution; and $2 million from each member’s June distribution. 

Pac-12 can now chart path forward

The agreement also addresses an important element as WSU and OSU work to chart a path forward: Departing members shall have no vote, direction, input or other power with respect to the league’s use, or allocation of expenditure of the withheld distribution.

In addition, the Pac-12 is entitled to an additional payment of $1.5 million from each departing member in a supplemental contribution. 

A statement from the 10 departing schools read: “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. 

“Under this agreement, our schools will have the right to vote on matters that affect all 12 schools this year, while OSU and WSU will have control over future conference revenue and decisions.”

Oregon State President Jayathi Murthy and Washington State President Kirk Schulz in a statement called the settlement “fair and equitable,” adding that it will “set the Pac-12 Conference on a path toward future success.”

Will Pac-12 rebuild or merge with MWC?

It has been a long road for OSU and WSU.

A December decision by the Washington Supreme Court enabled the Pac-2 to regain control of the league’s board and conference assets. 

OSU and WSU have also secured a football partnership with the Mountain West Conference for next season. In addition, an agreement with the West Coast Conference will enable 12 other sports at OSU and WSU to compete in that league as affiliate programs for the next two years.

As for the long term, both schools have repeatedly signaled that they harbor hopes of rebuilding the iconic 108-year-old conference. NCAA rules allow for a two-year grace period so conferences can reach the requisite number of eight schools.

Also, a possibility is a formal merger or so-called reverse merger with the MWC that would enable the Pac-12 to retain branding. But in a Zoom call last month to introduce new Pac-12 Commissioner Teresa Gould, Schulz didn’t tip his hand regarding future moves.

“Both those conferences know that we’ve got a multiyear window here where there’s got to be some final landing spot for those two schools,” Schulz said of the MWC and WCC. “I just think we’ve got to keep communications open back and forth. We got to make sure that we don’t sort of come strutting in there thinking we’re just better than everybody else of where we were before. We’ll wind up getting our ass kicked if that happens.”

Pac-12 still looking for media rights partner

When she spoke with reporters last month, among top-of-mind issues for Gould was securing a media rights deal for OSU and WSU for the next football season.

“I’ve been partnering with our two athletic directors, [Oregon State’s] Scott Barnes and [Washington State’s] Pat Chun, and I will say, not surprisingly, there’s great interest in the football products at Oregon State and Washington State,” Gould said. “So we are working hard to try to consider the options that are on the table to televise all of the home games at Oregon State and Washington State.”