As if the looming departure of 10 schools and a mounting list of legal disputes weren’t problematic enough, the Pac-12 is facing a steep operational challenge.
At stake: approximately $400 million in media rights revenue.
The conference is under contract to produce approximately 120 football and men’s basketball games for ESPN and Fox and another 850 live events for the Pac-12 Networks’ distribution partners during the 2023-24 sports season.
The technology used to broadcast events is first rate, but the conference needs actual humans to handle the operations and production. And many of those humans are job hunting as the Pac-12’s final season of competition unfolds.
Internally, conference executives are crafting two plans to navigate the next nine months, according to a source with knowledge of the situation:
— A scope-of-services plan to determine which services should be continued as normal, downsized or eliminated.
— An employee retention-and-severance plan to maintain the staffing necessary to support the athletes and produce the events that generate the media cash.
(There are roughly 50 employees on the conference side and another 150 who work for the Pac-12 Networks.)
An independent, outside firm has been retained to provide advice on the retention piece, both plans require approval from the Pac-12’s board of directors.
Which brings us to the thunderous development Friday: Washington State and Oregon State are taking the conference and commissioner George Kliavkoff to court to determine the makeup of the board and to prevent the outbound schools from casting votes until the board’s composition is established.
WSU and OSU believe the 10 departing presidents and chancellors have relinquished their voting rights and decision-making authority.
That authority includes the power of the purse.
Included in that power of the purse? You guessed it: the employee retention plan and the scope-of-services plans.
The tipping point for legal action came late last month, when Kliavkoff, whose position is not included in the retention plan, attempted to schedule a board meeting for the middle of September.
The agenda was designed to include discussion of “matters related to the departing members, proposed amendments to the Bylaws, a proposed conflicts-of-interest plan for Pac-12 members, and an employee compensation and retention plan for the Commissioner and other employees of the Pac-12,” according to the legal filings in Whitman County (Wash.) Superior Court.
But WSU president Kirk Schulz, chair of the CEO Group, declined to convene the full board because he believes the Cougars and Beavers are the board.
When Kliavkoff went ahead and scheduled the meeting anyhow, the Cougars and Beavers took the conference to court to prevent the outbound members from voting on matters of governance. After all, the 10 departing presidents could form a bloc that dictates the future of the conference and the allocation of tens of millions of dollars in assets.
The only items scheduled for votes at the board meeting were the retention-and-severance plan and the scope-of-services plan, according to the source, who added: “There was no intent to call a vote on governance.”
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Did Schulz believe that? In a court declaration, which was obtained by the Hotline, he said the following:
“I understand from representatives of Oregon State University that on September 5, 2023, Scott Petersmeyer, the general counsel of the Pac-12 Conference advised that, notwithstanding the initial vague communication from Mr. Kliavkoff, the Pac-12 Conference does consider the September 13, 2023, meeting to be a formal meeting of the Pac-12 Board of Directors … and further that the Pac-12 Conference anticipated voting on certain matters including the retention plan and a ‘possible vote’ on the Pac-12 Conference’s go-forward governance approach.”
That’s the vote the Cougars and Beavers are trying to avoid — the “go-forward governance” vote that could feature a bloc of departing schools and bring “irreparable harm” to WSU and OSU, in Schulz’s view.
Additionally, the legal action could have been intended to avoid establishing a precedent. If the full board votes on an employee retention plan, that seemingly would set the course for the full board to vote on everything, including the issues that matter most to WSU and OSU: the governance of the conference and distribution of assets.
If the temporary restraining order is approved — a hearing is scheduled for Monday in Whitman County — then it could be weeks before the board, in any form, is able to cast a vote.
Somehow, some way, the conference must find a compromise that allows for approval of the scope-of-services and employee retention-and-severance plans.
The legal action might bring the board’s business to a halt, but it won’t stop essential staffers from looking for work.
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