Pac-12 takes Mountain West to court, claims so-called ‘poaching penalty’ violates antitrust law

The fight for survival between the Pac-12 and Mountain West moved from the boardroom to the courtroom on Tuesday when the Pac-12 began legal proceedings against its regional adversary over the so-called poaching penalty included in the football scheduling agreement between the conferences for the 2024 season.

Filed Tuesday in the Northern District of California, the complaint calls the poaching penalty “anticompetitive and unlawful” and asks the court to declare it “invalid and unenforceable.”

It argues that the penalty, which punishes the Pac-12 financially for taking Mountain West schools, was designed “to stifle” competition and create an “artificial barrier to entry” for schools to join the Pac-12 — a barrier that, the complaint states, also harms the Mountain West’s own members by limiting their market value in college football realignment.

Notably, the Pac-12 has retained the San Francisco-based firm Keker, Van Nest and Peters, which represented Washington State and Oregon State in their successful 2023 lawsuit against the former Pac-12 schools over control of the conference. Eric MacMichael, who took a leading role in court for the plaintiffs, is the first attorney listed on the complaint.

The dramatic move comes against a Darwinian backdrop in which the Pac-12, decimated by the departure of the 10 universities, is attempting to rebuild with schools from the Mountain West.

Two weeks ago, four Mountain West members (Boise State, Colorado State, Fresno State and San Diego State) agreed to join the Pac-12 starting in the summer of 2026. Based on the poaching penalties outlined in the scheduling agreement, the conference would owe the Mountain West $43 million.

Utah State made the same move on Monday, upping the poaching fee to $55 million, while the Pac-12 remained in hot pursuit of UNLV on Tuesday.

Additionally, the complaint comes more than three weeks after the Pac-12 and Mountain West declined to extend their football scheduling agreement into the 2025 season.

The complaint states that Mountain West commissioner Gloria Nevarez “demanded” $30 million from the Pac-12 in exchange for a series of games next fall — more than double the $14 million the Pac-12 paid for a dozen matchups with Mountain West teams this season.

Formalized in late 2023, the scheduling agreement included a poaching penalty that attached a penalty for each Mountain West school — the amount started at $10 million and increased by $500,000 per school — that jumped to the Pac-12 prior to the summer of 2027, or two years beyond the end of the agreement.

Section 7.01 of the agreement is titled “Termination fees” and states:

“Accordingly, as a material inducement to MWC’s willingness to enter into and perform its obligations under this Agreement, the Pac-12 covenants and agrees that, if (A) at any time prior to the two year anniversary of the expiration or termination of this Agreement pursuant to Article IV (the “Withdrawal Fee Period”), the Pac-12 makes an offer to any MWC Member Institution (other than an offer to all MWC Member Institutions to join Pac-12 as Pac-12 member institutions … which any such MWC Member Institution accepts, or announces that it will accept, during the Withdrawal Fee Period … the Pac-12 shall pay liquidated damages to MWC in the form of the termination fee as set forth on Schedule 7.”

The complaint indicates the poaching penalty “saddles the Pac-12 with exorbitant and punitive monetary fees for engaging in competition by accepting MWC member schools into the Pac-12” and therefore violates California’s Unfair Competition Law.

It also notes that “Schools have departed from the MWC for other conferences in recent years. In none of those instances did the new conference pay the MWC ‘poaching penalties.’”

The complaint casts the poaching penalty as harmful to Mountain West schools by limiting “the ability of MWC member schools to benefit from competition among athletic conferences — placing one of their most logical options at a severe competitive disadvantage.”

Why did the Pac-12 accept the scheduling agreement if it opposed the poaching penalty? The complaint addresses that issue as well:

“Knowing that the Pac-12 was running out of time and short on leverage, the MWC not only charged the Pac-12 supra-competitive prices to schedule football games—over $14 million for OSU and WSU to play just six games each—but it also forced the Pac-12 to accept an unprecedented Poaching Penalty provision wholly unrelated to scheduling football games and designed to limit the Pac-12’s ability to compete with the MWC for years into the future, even after the Scheduling Agreement will expire.”

Among the judges in the Northern District of California is Claudia Wilken, who is overseeing the groundbreaking House v NCAA case and ruled on the famous Ed O’Bannon case that ushered in the era of athlete compensation. The complaint filed by the Pac-12 will be randomly assigned, according to a source.