Canzano: Pac-2 heads to court amid high stakes
A preview of Tuesday's hearing...
I’ll be in Whitman County Superior Court Tuesday afternoon for the hearing pitting the “Pac-2” vs. 10 departing Pac-12 members and Commissioner George Kliavkoff.
Barring an eleventh-hour settlement, attorneys for both sides will present in front of Judge Gary Libey. I’ll post live updates on Twitter, Instagram, TikTok and share my deeper thoughts, commentary and reporting here.
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Matthew Wand is an attorney who specializes in cases involving business transactions and litigation. I spoke to him on Monday in a wide-ranging interview. I won’t get too far in the legal weeds, but Wand was terrific in laying out what could happen in court and what he’ll be listening for during the hearing.
Here you go…
What’s at stake on Tuesday?
“This isn’t the only kick of the can. The question before the judge (Tuesday) will be to decide for the next 14 days or two months who is on the (Pac-12’s) board of directors. The judge is going to make that call.”
How ‘Notice of Withdrawal’ in the Pac-12’s bylaws will factor:
“I hope the first question the judge asks the departing members of the Pac-12 is ‘Do you think you can rescind your withdrawal?’ When you look at bylaws like this the court is required to give effect to all the sentences and words that are in the written document. There are sentences at the beginning of the section and sentences at the end that use the term ‘Notice of Withdrawal’ … it all comes down to ‘Do you guys think you can change your minds?’ if they say ‘No, we can’t change our minds, we’re out, there’s no way out now’ they’re going to have a long day.”
Why the actions of the board with USC and UCLA matter:
“If the court decides this (notice of withdrawal) provision has multiple meanings that are all reasonable, then the court can and must look at other pieces of evidence to decide what it means and who should win. And one of those key pieces of evidence is the conduct of the parties before they understood they were going to have this dispute. That is extremely powerful evidence for what those parties intended when they wrote out and agreed to the bylaws. In this instance, going back almost two years now, we all know what they believe because they acted on it with USC and UCLA and then followed up with it in writing and affidavits… everybody knows what they thought at the time and they’re only changing their position now because they’re scared that the chickens have come home to roost and they might lose out on some cash.”
If Oregon State and Washington State do get control, what keeps them from taking all the revenue?
“If there are questions about how Oregon state and Washington State are exercising their power there are plenty of future of opportunities for the departing members to be heard on those issues. They can come back to court and say ‘We don’t like this decision’ and the judge can rule on it. But the key problem right now is that the Pac-12 is paralyzed because they don’t know who is in charge. What the judge needs to prevent is a very important, multiple-state organization being totally paralyzed with hundreds of millions of dollars on the line.”
On what OSU and WSU must think about:
“Oregon State and Washington State have to think about potential liabilities from the lawsuit in the Bay Area and the Comcast overpayments. All of those things have to be talked about and considered. The board of directors is not only entitled but obligated to hold back whatever money is necessary in order to cover those debts and obligations. The notion that the departing schools can take their normal percentage like they always would and move along their happy merry way, that doesn’t make any sense at all because nobody knows how much revenue the Pac-12 will have in the future to cover those unknown liabilities.”
On George Kliavkoff not contesting the lawsuit:
“He was one of the people taking an action they were trying to stop. He sent an email saying ‘I’m inviting all of these departing members to sit in and vote at this meeting.’ He may say that he’s not taking a position and doesn’t have a position on the matter, but his actions say differently when you read through the discovery. He doesn’t want Oregon State and Washington State to be in charge. He wants the departing schools to be there as well. I don’t know why. I can’t speculate as to why. It looks to me like his actions are suggesting he wants the protection of those other schools. Maybe he figures it will help him with his severance pay.”
On the strongest argument for the departing 10 members:
“Their strongest argument is that there’s ambiguity (in the bylaws) that should lead the court to have ongoing management of the Pac-12. I don’t think they have really strong arguments to retain their board seats. If I’m a lawyer representing the departing schools, in my mind a ‘home run’ is if the judge maintains some sort of control and a very easy way for me to run back into court if I don’t like what’s going on — kind of continuing oversight. As far as denying all relief and having the court say all 12 of you are still on the board and Kliavkoff is right and he can bring you all in… I just don’t see it.”
On reading which way the judge is leaning during the hearing:
“It’s easier for me to have that insight than when I’m playing poker with strangers. You can get an idea. The judge is always going to want to make sure that everybody has an opportunity to make their argument. He’s not going to cut people off… often when a judge understands the winning side’s arguments, they’ll kind of shorten their time a little bit. And when the person who is likely to lose stands up, they’ll probe them a little more and expose the weaknesses in the argument. You kind of get a flavor for which way the judge is leaning.”
Any predictions?
“I think the judge rules that the two are in charge. I think he probably opens the door for some sort of expedited ‘Hey, if you departing schools think you’re being treated unfairly come see me and I’ll give you a hearing within 24 hours’ type of thing. I think that’s the most likely outcome. The arguments about the calendar and Dec. 4 (transfer portal opening) being a real thing and ‘We need to make decisions now because if we don’t college athletes will be negatively impacted’ those are so compelling in terms of irreparable injury I just don't see this dragging out. I don’t see him allowing those 12 schools get in a mud-wrestling match all the while seeing student-athletes getting hurt. I think he’s going to make that call. I think he’s going to remind them of their fiduciary duty… the worst outcome would be this limbo they’re all living in the last eight weeks. That’s the worst outcome. I don’t think this judge is going to let that happen.”
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This is extraordinary coverage (pre-coverage, you could say) of an immensely complex topic. Having been briefed many times by lawyers for the schools at which I served--usually anticipating media queries--you can’t be better informed than this about what to expect in that courtroom.
As your source predicts, I’m guessing the push-pull for OSU and WSU is being ‘careful about what they wish for.’ With assets come liabilities, some harder than others to calculate or anticipate.
It’s hard for me not to think about the gutless, soulless, voracious money changers in LA whose greed set so much of this mess in motion. I hope they choke on their BIG10 media payouts.
Your usual informative, behind-the-curtain stuff. Thanks, John.
Your friend, Matthew Wand, is very wise and could be a judge himself by his objectivity in this matter. I am naturally a logical person. The law is not always rational, attorneys and judges are human with all the biases that conveys, but that is its intent. Any objective person can see that the 10 leaving schools gave up any right to dictate the future of the PAC12 by accepting the offer from the conferences they are joining (creating a new contract). They can't belong to two conferences at the same time: illogical. So they must have given their notice of separation, whether or not in writing. As the sole members of the PAC12 at this time, it will be up to OSU and WSU to decide how to handle the conference finances going forward including distribution of assets and payment of liabilities. Logical. As for George K, he is just a scoundrel. He has breached his contract and fiduciary duty and should be sued in court for a dismissal "with cause" forgoing any future compensation.