‘Pac-2’ mailbag: Options for Washington State and Oregon State, finances of a MW merger, defining football relevance and more

Rebuilding the Pac-12 will be expensive, but the Cougars and Beavers have ways to offset costs.

The Hotline mailbag publishes weekly. Send questions to pac12hotline@bayareanewsgroup.com and include ‘mailbag’ in the subject line. Or hit me on Twitter/X: @WilnerHotline.

Please note: Some questions have been edited for clarity and brevity.

It seems expensive for the Pac-12 to poach Mountain West schools, but could the conference offset the penalty by reducing payouts to any new MW members? What valuation for ‘Pac-2’ media deal would justify MW schools paying an exit fee and possibly a temporary $1 million to $2 million reduction? — @TroutTyler

A great question that has multiple layers of financial complexity, so let’s start with the basics and drill down from there.

According to the terms of the scheduling agreement between the Pac-12 and the Mountain West, the former would owe the latter a poaching penalty of approximately $10 million per team.

That cost comes in addition to the exit fee departing MW schools would owe their former conference. How much? Figure on roughly $20 million if the departing schools give more than one year of notice and $35 million to $40 million if they give less than one year of notice.

(Assume the situation will be resolved at least 12 months in advance.)

Washington State and Oregon State will have at least $65 million at their disposal — the amount withheld from the 10 departing universities — that can be used to cover the poaching penalty for up to six MW teams.

But that doesn’t account for the departure fee owed by the outgoing MW schools to their conference.

There are at least three options for covering that cost:

— Help from central campus, a path that obviously would require approval from the university presidents

— A one-time loan from the Pac-12, which potentially could dip into a war chest that includes $100 million in Rose Bowl revenue

(Washington has taken this approach to deal with a near-term budget shortfall, accepting loans from both the Big Ten and Fox that must be repaid in the 2030s.)

— Diverting distributions from the Pac-12 over time

This strategy would work only if the departing schools negotiate a multi-year payment plan with the remaining MW members, which will assuredly take a hard-line approach.

The media value is difficult to sketch, because it depends entirely on the configuration of the new Pac-12.

A rebuilt league that features WSU, OSU and six arrivals from the MW would carry a different valuation than a rebuilt league that features Stanford and Cal (if the ACC implodes) or a rebuilt league that features selected schools from Conference USA or elsewhere.

The MW’s current deal with Fox and CBS will spin off about $5 million per school in the final years of the contract cycle.

Unless Stanford and Cal are involved, the value of a reconfigured Pac-12 probably won’t exceed $10 million per school per year. (Even with the Bay Area teams, the deal might not top that amount.)

For the sake of this exercise, let’s presume the rebuilt Pac-12’s media deal is worth $8 million per school per year, on average.

If the new schools diverted $2 million annually to repay the MW over six years, for example, that would leave them with a new distribution amount that slightly exceeds what they are currently receiving from the MW — and it doesn’t cover the full departure fee of about $18 million.

Not optimal.

Which leads us to the bottom line about the bottom line:

Any scenario in which MW schools leave for the Pac-12 that doesn’t involve at least nine members voting to dissolve the conference — thereby voiding the departure fee — almost certainly would require help from central campus.

And any willingness to help presumably would be baked into the decision to change conferences.

You’ve mentioned since last August that the chance of Washington State and Oregon State getting an invite to a power conference is very slim. Yet you’ve also mentioned that the upcoming football season is pivotal for those schools to remain relevant. What does relevancy mean for the ‘Pac-2’ schools? — @CelestialMosh

Defining relevance is tricky, but we’ll offer the following general framework:

— Fast starts

The fate of the ‘Pac-2’ will be a national story when the season begins, because of the unprecedented nature of their plight. They must take advantage of the attention and pile up early wins.

For WSU, that means beating Texas Tech (in Pullman) on Sept. 7 to create hype for the Apple Cup one week later.

Oregon State faces a similar task: Beat San Diego State on the road in Week 2 to generate attention for the Oregon game the following Saturday.

If the Cougars and Beavers win their rivalry games on Sept. 14, all the better. But they must be competitive.

— Avoid losing streaks

The Cougars lost six in a row during the 2023 season. They can’t afford something similar this fall. Even a three-game losing streak would push them off the radar.

— Be entertaining

It’s not only about winning games and sneaking into the national rankings. The ‘Pac-2’ schools need to score points to improve their chances of making the highlight shows aired on ESPN and Fox. The more 50-45 games they play, the better.

— Become bowl-eligible

The Pac-12 bowl partners aren’t changing. Departing and remaining schools alike will be placed in the same bowls as usual, which ensures WSU and OSU of being part of the postseason narrative — as long as they win at least six games.

The twists and turns of the season will undoubtedly provide WSU and OSU with opportunities for media attention on a week-to-week basis. But those are the fundamentals of consistent relevance.

Is there any scenario whereby Oregon State and Washington State can take their settlement money and buy their way into the Big 12? — @cubsfan7331

We don’t see that as a necessity.

If OSU and WSU have the chance to enter the Big 12, they will accept without hesitation — even if the price of entry is a massively reduced revenue share.

For example, the Big 12 schools will receive an average of $31.7 million annually from the next media rights deal with Fox and ESPN.

If the conference offered spots to the ‘Pac-2’ schools for $5 million or $10 million annually, they would jump at the chance and figure out the finances later.

The issue is motivation: What scenario would lead the Big 12 to conclude that adding OSU and WSU strengthens the conference?

It’s not like the Pacific Northwest schools would solve lingering travel issues — they are too far away, even for Arizona, ASU, Utah, Colorado and BYU.

If the Big 12 expands again in the near term, it seemingly would target ACC schools if that league breaks apart.

We don’t see any reasonable scenario that would lead to the Big 12, or its media partners, determining OSU and WSU enhance the conference.

Could this scenario happen: No spots open in the Power Four before the Pac-12 needs to expand membership to comply with NCAA rules (the summer of 2026). But years later, spots become available, Oregon State and Washington State jump ship, and the Pac-12 has all new teams? — @brycetacoma

We’re hesitant to disregard any realignment scenario, including the one laid out here.

But the means are markedly more difficult to envision than the ends.

Sure, there could be a Pac-12 conference in 2030 or 2035 that does not include WSU or OSU and is filled entirely by teams currently in the Mountain West.

But what’s the mechanism? What series of events would lead to WSU and OSU receiving invitations from one of the Power Four?

In our view, it’s far more likely that the Power Four structure blows apart — it could become the Power Three, or a super league could emerge — than the ACC or Big 12 offers membership to the Cougars and Beavers.

I’ve been out of the discussion for a personal reason. Did anyone ever discuss the Mountain West buying the Pac-12 Network assets to create a MW Network? — @ScottErnstDSV

We cannot confirm whether that option has been discussed by the university presidents and conference commissioners, but it’s not reasonable in the short term. The MW has broadcast agreements with Fox and CBS through the spring of 2026. (A few football games air on the conference’s digital network, as well.)

However, the Pac-12 Network’s infrastructure could be useful starting in the fall of 2026 if Washington State and Oregon State merge with the Mountain West in some fashion.

That merger could take any of several forms. but the ‘Pac-2’ schools own the infrastructure and will attempt to make use of it over the long haul.

(One scenario they are seriously considering: Leasing production capabilities to other sports media entities.)

We expect the reconfigured conference to have a digital component within its media rights deal. To that end, the Pac-12 Networks infrastructure, which is now called Pac-12 Enterprises, could prove valuable.

Are there any clauses in the Mountain West commissioner’s contract that would make it costly for her to be the new Pac-12 commissioner? — @LAWomensHoops

We don’t have access to the details of Gloria Nevarez’s contract, but money wouldn’t be the issue.

Her future depends on what conference emerges for the 2026-27 competition year, when the Pac-12 must have at least eight members to comply with NCAA rules, and on the degree to which WSU and OSU want Nevarez to oversee their rebuilt Pac-12.

We say that because the Cougars and Beavers are quite happy with the Pac-12’s current commissioner, Teresa Gould, and because they were less than thrilled by the hard-line negotiating tactics Nevarez used last fall with the football scheduling partnership, according to sources.

Nevarez did her job: She attempted to best represent all the MW schools, which were not fully aligned on several details, including the so-called poaching penalty.

But the very nature of the situation meant Nevarez’s work on behalf of her conference might be received poorly by the schools on the other side of the negotiating table.

That said, if the only options for WSU and OSU are to enter the MW in a traditional move or execute a reverse merger with at least nine MW schools, they might not have a choice.

The MW presidents would have all the leverage and could simply insist on having Nevarez at the top of the org chart.

What’s a must-have for your chicken wings: blue cheese or ranch dressing? — @MrEd315

To be clear on this critical matter: Truly great wings require no sauce.

In fact, sauce detracts from the taste of truly great wings.

But if forced to choose, the Hotline would always opt for blue cheese.

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