calumnus said:
Big Dog said:
sycasey said:
So what is the likely end result here? OSU and WSU just have to give up the ghost and join the Mountain West? Would a reverse merge with the Pac ever be feasible?
Sure, it's feasible, but the MWC is only gonna want to merge with a squeaky clean partner, with no future liabilities hanging around that they might be on teh hook for. And that will take time to sort out. And lawyers.
That is why operating as the PAC-2 for 2024 and 2025, but with a scheduling alliance with the MWC, appears to be the best path for OSU, WSU and the MWC (or most of th MWC). That gets to the end of the MWC media contact and gives the lawyers time to sort through the PAC-12's holdover issues. It also keeps two votes at the CFP to defend PAC-12 rights.
The other option would be for the reverse merger to happen sooner, as soon as next season, which would allow the MWC schools to get out of their $5 million media deal and negotiate a better one as the PAC-16, with some benefit going to WSU and OSU. That would also strengthen the PAC's hand in fighting fo it's existing contractural rights.
The main obstacle, which WIAF has made vey clear, is the other 10 (I guess we let USC and UCLA back into the club) need to have their current financial interests in the conference protected. That is reasonable and any court will likely support it. We may even see the conference placed in receivership to make sure the interests of all the parties are protected.
However, there may be more at play. The B1G, Fox, ESPN and B-12 clearly wanted the PAC-12 dead, and now the departing members, joining those conferences, may now also want to see a future competitor conference destroyed. If the object was to eliminate the PAC-12 those parties won't be happy with simply eliminating the MWC. The SEC and B1G want to redo the 2024 and 2024 CFP format and the best way would be to get their new members to burn their old conference to the ground so there is no longer a PAC-12 to claim its 2024 and 2025 rights and revenues.
Moreover, rather than the MWC members being able to abandon their current media deal and negotiate as the PAC-16 possibly involving Apple and Amazon, dissolving the PAC-12 would instead force WSU and OSU into the current MWC media deal at $5 million per and keep everyone under ESPN control.
It seems pretty dirty to me, and especially as we are ourselves victims of these same forces and were almost killed ourselves, I am saddened to hear we have gone Stockholm and are now collaborating with these forces in actions against our former fellow refugees.
You seem to be viewing this as evil vs. good, which if courts get to do, and ignore corporate law, than nothing will ever be predictable, and we might as well not bother planning for clients.
The biggest obstacle facing OSU and WSU is they don't know what the liabilities of the Pac will be, primarily from some of Larry's bad conduct. Part of the problem is they don't seem to be getting any help from the conference, and maybe that changes with a Judge's order. But also it may be some of this is not quantifiable until the parties go through discovery, such as on the Holiday Bowl, Comcast employee fiasco, Direct TV, and sexual harassment litigations. The Comcast employees' suits, as alleged, could mean material punitive damages. The Comcast liability at least is a know quantity, I'n not sure how to evaluate the Direct TV claims, but there likely is an outside number that can be estimated - these are contractual damages. I'm guessing it will take some time to figure that all out, and my guess is the exposure will be too much for the MWC to be willing to do engage in any transaction, reverse merger or otherwise, that will provide for successor liability. I'm also suggesting that OSU and WSU will run out of time before the can properly assess these lialbities. The cure seems to be somehow the MWC will give up two football conference games, god knows how many basketball games, and change to whatever sports to get this done, which seems to vastly overestimate the value of the OSU and WSU programs, and assumes that there really is a pot of gold at the end of the rainbow. I just don't see this happening. I think the MWC Commissioner was very clear in her statement.
Another huge problem is that the Pac departing members have no advantage in going through this exercise, and appear to have very good reasons not to do so, and under CA corporate law, can and will cause the conference to liquidate. You seem to attribute some sinister motivations to the departing members, such as watching out for their own financial interest and those that will impact their future partners. But the corporate law is written so that the vast majority are not enslaved with other partners forever, especially when the other partners want to control decisions in organizations they have continuing liability for.
You are correct that teams leave conferences, and they do so typically subject to bilateral indemnification provisions (partnership withdrawal agreements typically provide for this). This is possible because the conferences are clearly viable entities that have remaining members who are able to meet their commitments. That is not the case with the Pac 2. WSU and OSU have athletic departments that are deeply in the red. There probably is no sense right now what the outside number is for contingent liabilities and if the Pac 2 would be able to pay them. There is major doubts the Pac 2 could even develop a schedule in most sports. There is significant doubt the Pac 2 can get anything close to viable TV contract, pay its bills on time or merge or somehow obtain members from the MWC, who themselves would be looking at enormous break out fees from their TV contract. There is a great deal of concern that the Pac 2 would not even be able to make the payments the departing members think they are due for the past and 2023/4 basketball season that have accrued and are payable in the future. I'm not sure anyone really has thought out all the consequences of trying to keep the Pac 12 alive, and I don't think the departing members or the MWC will want to spend the legal and other fees trying to find out how to examine and document all the weird scenarios to make it try to work. What really is bizarre is that you then add the broadcast partners want the Pac 2 dead, and if this really is the case, why the hell is the MWC or the departing teams going to piss off their broadcast partners to help OSU and WSU try to rescue the conference?
At some point someone has to ask why Washgon thought they were entitled to way more money to join an "East" conference than Calford or SMU? They made certain calculated decisions and want to be bailed out from the consequences of those arrogant decisions. You instead compare these schools to hostages, when they willing made their decisions without a gun to their head, unlike the hostages in the Stockholm bank robbery.
Note: I use the terms partners loosely, because the law regarding unincorporated associations is similar to that for general partnerships.
