Canzano: Mountain West exit-fee mediation "ended up on different planets"
How the Pac-12 and MW got here.
The Mountain West entered mediation last month, requesting nearly $22 million in exit fees from each of the five departing schools, per sources. That was the conference’s hardline stance out of the gates.
Boise State, Colorado State, Utah State, San Diego State, and Fresno State will join the new-world Pac-12 in 2026. The objective of the settlement talks was to get the parties together, hash out the exit-fee leverage, and reach an agreement that mitigated the risks and expense associated with going to court.
The sides may have started mediation in the same room, but as one source told me, “We ended up on different planets.”
The departing schools expected to pay somewhere between $8 million and $12 million per school in exit fees. The MW’s best offer never dipped below $18 million, I’m told.
There are bad feelings on both sides of the ongoing legal dispute. Those who work at MW headquarters will tell you the conference felt undermined by the departing members who will officially join the Pac-12 in the summer of 2026.
The departing schools say it’s just business. They cite long-standing frustrations and believe MW Commissioner Gloria Nevarez is retaliating against them by withholding millions in revenue while operating outside the scope of the league’s bylaws and handbook. They say Nevarez is taking their defections personally.
In the days before Boise State, Colorado State, Utah State, San Diego State, and Fresno State decided to leave for the Pac-12, Nevarez and her board plotted and discussed conference strategy in a series of meetings.
After the news of the departures broke, Nevarez told me, “We had a mole in the room.”
Three members — Boise State, Colorado State, and Utah State — filed an updated lawsuit last week naming both the MW and Nevarez. The law firm representing the schools argues that their clients are victims of financial retaliation and were also deceived by Nevarez, who they claim accelerated the addition of Grand Canyon University from 2026 to 2025.
A MW spokesperson told me on Tuesday that the conference followed bylaws established under the watch of the departing schools. The MW believes it has acted in good faith, leaning into the league’s conflict-of-interest and resignation policies.
The spokesperson said the conference has assured members that GCU’s early addition is “expense neutral and revenue positive for every Mountain West institution.”
What’s not revenue positive for the departing members are looming conference exit fees. Early back-of-the-napkin math placed estimates somewhere between $17 million and $18 million per school. Conferences typically expect those figures to be negotiated downward. Departing schools have sometimes paid somewhere between 50 to 70 percent of the fee and/or made payments in installments spaced out over a decade or more.
Recent NCAA Tournament success in men’s basketball and Boise State’s appearance in the expanded College Football Playoff last season boosted the MW’s conference distributions in the most recent fiscal year. The windfall inflated the league’s distributions, which drive the exit-fee formula. The MW exit fee bloated to more than $21 million per school, the conference confirmed.
“They want to leave? That’s the cost to leave,” said one MW president.
In June, the MW raised eyebrows (and ire) when it skipped annual distribution payments to the five departing schools. The conference did not make payments for media rights revenue, money earned by the schools through NCAA Tournament units, and withheld the College Football Playoff payday that Boise State earned.
To compound matters, Boise State hosted the MW conference football title game at Albertson’s Stadium last December. The Broncos defeated UNLV, 21-7. The school’s ticket office collected revenue and sent the league’s share of the title-game proceeds to the MW office via check. In June, Boise State (and four other departing schools) did not receive their annual distributions.
“The Mountain West’s withholding of travel reimbursement monies and NCAA grant-in-aid and other revenue for student-athlete well-being is clearly designed to penalize the departing members for their decision to join the Pac-12,” Steve Olson, partner and litigation department co-chair for the O’Melveny law firm, said in a statement on Tuesday.
San Diego State and Fresno State are not part of the lawsuits. The California State University chancellor has taken the position that it doesn’t want one system member to sue another. San Jose State remains a member of the MW.
Karl Benson, the retired WAC and Sun Belt commissioner, told me this week, “It’s not uncommon for the conference office to withhold distributions when a member is leaving and owes the conference an exit fee. However, the legal battles between the Pac-12 and MW are not common.”
The two conferences formed an unusual business arrangement after the Pac-12’s implosion two summers ago. The MW offered a scheduling partnership to Oregon State and Washington State that helped the two-member conference play the 2024 football season.
It came with a $14 million price tag, however.
That was millions above market rate for 12 non-conference football games, but the two schools were on an island, facing an uncertain season, and desperate to fill the schedule. The relationship between the Pac-12 and MW deteriorated as the sides tried to negotiate a scheduling-agreement extension for the 2025 season.
The MW asked for $30 million.
The Pac-12 walked away.
It later ended up with five top MW schools as new members, sparking an ongoing antitrust legal battle focused around a $55 million “poaching penalty.” The Pac-12 doesn’t believe the fees are legal and has filed a lawsuit.
Nevarez, who runs the MW, and Teresa Gould, the Pac-12 commissioner, have known each other for decades. They worked together at UC Berkeley, and both served as deputy commissioners in the old-world Pac-12. They were once allies, but insiders tell me they’ve had a less cordial relationship in the last year.
Nevarez has repeatedly brought up the possibility of a merger. The new-world Pac-12 has expressed no interest. The departing five MW schools, along with Oregon State, Washington State, Gonzaga, and Texas State, have positioned the Pac-12 as the best basketball and football conference anchored in the western part of the country.
An early September court hearing looms. The MW has asked the court to dismiss the Pac-12’s poaching-penalty lawsuit. Legal experts expect that ruling will spark another round of settlement discussions. In the meantime, Nevarez and the MW now face an amended lawsuit from three departing members and fresh allegations.
The MW insists it has done nothing wrong. The departing members say they’re simply seeking closure, an end to the lawsuits, and a fair outcome. They’d like to get on with business.
One involved person compared the final stages of the recent “exit fee” mediation to a tug-of-war with an elephant. The MW reluctantly moved from an opening offer of $22 million per school to $18 million during the negotiation.
At one point, the attorneys for the departing schools said they’d be willing to pay $9 million per school, per a source.
The counteroffer came: “$18 million per school.”
A second offer was eventually presented: “$10 million per school.”
The answer again came: “$18 million.”
Please consider a gift subscription for a friend or family member, or the donation of a paid subscription to a senior on a fixed budget:
When Canzano lays out the basic facts, it becomes apparent to me that the MWC and Gloria Nevarez have repeatedly acted in bad faith over the last two years. They come off as desperate, which they undoubtedly are. And I think there’s a very real chance this ends with Air Force and UNLV bailing on the MWC, leaving the conference on life support.
As a die hard fan of college football, I have learned more about litigation and antitrust law over the past few years than I ever imagined possible. Wanna be an attorney? Subscribing to JohnCanzano.com is a hell of a lot cheaper than law school.