Pac-12 fighting ‘poaching penalty’ with lawsuit
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Kyle Bonagura, ESPN Staff Writer
The Pac-12 filed a lawsuit in federal court Tuesday challenging the legality of a “poaching penalty” included in a football scheduling agreement it signed with the Mountain West Conference in December.
With Oregon State and Washington State scrambling late last year to fill their 2024 football schedules in the wake of the Pac-12’s collapse, they came to terms with the Mountain West on a one-year agreement that added six MWC opponents to each remaining Pac-12 school’s schedule this season.
As part of the agreement, the Mountain West included language that requires the Pac-12 to pay a fee of $10 million if a school left the MWC for the Pac-12, with escalators of $500,000 for each additional school.
“This action challenges an anticompetitive and unlawful ‘Poaching Penalty’ that the MWC imposed on the Pac-12 to inhibit competition for member schools in collegiate athletics,” the suit says. “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.
“The MWC imposed this Poaching Penalty at a time when the Pac-12 was desperate to schedule football games for its two remaining members and had little leverage to reject this naked restraint on competition.”
When Boise State, Colorado State, Fresno State and San Diego State announced Sept. 12 they were leaving the Mountain West for the Pac-12, there was an expectation the Pac-12 would be required to pay $43 million in fees, as outlined in the scheduling agreement. That number jumped to $55 million on Monday after Utah State also accepted an offer to leave the Mountain West for the Pac-12.
On the same day the announcements were made, Mountain West commissioner Gloria Nevarez sent an email to Scott Petersmeyer, the Pac-12’s chief legal officer, noting the Pac-12’s “obligation” to pay the $43 million within 30 days.
Pac-12 commissioner Teresa Gould responded to Nevarez’s email Tuesday to inform her of the lawsuit, noting the conference’s stance that the fees are unlawful.
“Fundamentally, these provisions seek to inhibit competition by placing exorbitant and punitive monetary fees on the Pac-12 simply for engaging in competition by accepting MWC member schools into the Pac-12,” Gould’s letter said. “As you know, the MWC imposed these improper penalties over the Pac-12’s objection at a time when the Pac-12 was desperate to schedule football games for its two remaining members and had little leverage to reject this clear restraint on competition.”
The Mountain West was reviewing the lawsuit when contacted Tuesday by ESPN and did not have an immediate comment.
The lawsuit also noted the roughly $18 million in exit fees each of the departing schools will be required to pay the Mountain West.
“To the extent the MWC would suffer any harm from the departures of its member schools, these exit fees provide more than sufficient compensation to the MWC,” the lawsuit says. “There is no reason why the schools’ new conference should be responsible for compensating the MWC further, or why such penalties should apply to only one competitor conference: the Pac-12.”
Negotiations between the Pac-12 and Mountain West this summer to extend the scheduling agreement for the 2025 season ended with a significant gap between what the Mountain West wanted and what the Pac-12 was willing to pay.
“The conferences’ negotiations broke down after the MWC demanded $30 million from the Pac-12 for the 2025- 2026 season, more than double the already exorbitant price the MWC charged the Pac-12 for games during the 2024-2025 season,” the lawsuit said. “After the parties were unable to reach agreement in the face of the MWC’s financial demands, the MWC Commissioner broke off further discussions, stating, ‘I think we have to move on.'”
With both conferences at seven schools — starting with the 2026 season — more movement is inevitable, as the NCAA requires a conference to have eight football-playing schools. UNLV is on the proverbial clock having reaffirmed its commitment to the Mountain West on Monday, only to back away from that commitment upon learning Utah State was leaving for the Pac-12.
Seven-time NASCAR champion Jimmie Johnson is now the majority owner of Legacy Motor Club under a restructuring in which investment adviser Knighthead Capital Management bought into the Cup Series team.
Knighthead manages $9 billion of assets with a portfolio that includes investments in Hertz, World Endurance Championship sports car team JOTA Racing, Singer Vehicle Design, Revology Cars and a controlling stake of English soccer team Birmingham.
Johnson told The Associated Press that the deal announced Monday makes Knighthead “a significant minority partner” in that the private equity firm bought much of the ownership stake held by Legacy co-owner Maury Gallagher.
Gallagher retained some shares in the NASCAR team but will step down from day-to-day operations and join Hall of Famer Richard Petty as an ambassador for Legacy.
Johnson, who has been living in England for more than a year, will return to Charlotte to be hands-on in his larger role with Legacy. His wife and two daughters will follow at the end of the school year.
“I thought I was going to have three more years to understand ownership more,” Johnson told the AP of his original plan when he bought into the NASCAR team ahead of the 2023 season.
Legacy is essentially the rebuild of Petty Enterprises, one of NASCAR’s oldest and winningest race teams. Gallagher, the chairman of Allegiant Air, owned GMS Racing and, in 2021, acquired Richard Petty Motorsports, rebranding it as Petty GMS Racing.
Johnson signed on at the end of 2022, and the team was again rebranded into Legacy as it expanded to two full-time Cup cars ahead of the 2023 season. The plan was to allow Johnson to grow into his role as NASCAR team owner over five seasons, but the timeline changed when he developed a relationship with Knighthead and Gallagher decided to step back.
“I’ve had an open eye to the private equity world and trying to understand what’s out there,” Johnson said. “I know that there are some other teams with PE involvement, and I just started to get to know people. I had a head start and a few friendships out there, but ultimately the opportunity and access to Knighthead and the friendship I built was done socially, and when it was time to really engage in the PE world, we just clicked and got together to see where we could go.
“We wanted to move quick. And here we are, it’s only been a couple of months, it’s been very, very quick.”
The partnership begins immediately, and Knighthead will be part of Legacy when the NASCAR season begins this weekend with the preseason race at Bowman Gray Stadium in Winston-Salem.
Tom Wagner, co-founder and co-managing member of Knighthead Capital, said the firm was drawn by “NASCAR’s rich history and Legacy MC’s ambition and innovation make it a unique opportunity.”
“We’re thrilled to collaborate … to drive the team forward, both on the track and within the wider racing community,” Wagner added.
Tom Brady has stakes in Knighthead but the deal with Legacy does not involve him at this time, Johnson said. But Johnson and Brady have discussed possibly partnering on an Indianapolis 500 entry for driver Sebastian Bourdais with Chip Ganassi Racing. Ganassi told the AP he had only one preliminary conversation with Johnson about it and there has been no further discussion.
Legacy this season will field two full-time cars: the No. 43 Toyota for Erik Jones and the No. 42 Toyota for John Hunter Nemechek. Johnson will attempt to qualify next month for the season-opening Daytona 500 and also the Coca-Cola 600 in May.
Johnson, who turns 50 in September, ran nine races last year but said he realized at the season-finale in Phoenix that Legacy needs him more in his executive role than as a driver.
He thanked Gallagher for the opportunity to become a NASCAR team owner and is eager to help Legacy improve its on-track performance while working with Knighthead to expand the brand.
“He has been an outstanding partner, mentor and friend, and I’m grateful we had the opportunity to work together,” Johnson said of Gallagher. “I’ve learned so much from him, and as his professional career takes a different path, he can worry less about being an owner and more about focusing on family and enjoying life.”
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Jesse Rogers
CHICAGO — The Cubs are finalizing a trade to acquire closer Ryan Pressly from the Houston Astros, pending medical review, sources told ESPN’s Jeff Passan on Sunday.
Pressly will waive his no-trade clause to facilitate the move, and Houston will send money to help cover his $14 million salary, the sources said.
The Astros will receive a low-level Cubs prospect who is not on Chicago’s 40-man roster, according to a source.
Pressly, 36, is likely to become the Cubs’ closer, a role he held with Houston from 2021 to 2023 before it signed Josh Hader to a long-term contract. The veteran righty has 112 saves with a 3.27 ERA during his 12-year career, which includes six seasons in Minnesota.
Pressly will join a bullpen that blew 26 saves last season, as the Cubs are looking to make a playoff push in 2025. Chicago hasn’t been to the postseason since 2020, working without an established closer over the past few years.
Righty Adbert Alzolay was ineffective last season, then he suffered a forearm injury and eventually needed Tommy John surgery. Porter Hodge, 23, finished the season as the closer, but the team wanted more experience and depth in the back end of the bullpen.
The Cubs pursued lefty Tanner Scott before he signed with the Los Angeles Dodgers last weekend, according to league sources. Chicago was less interested in the other free agent closers, instead settling for Pressly, who has one year left on a three-year, $42 million contract signed before the 2023 season.
Pressly will join newcomers Eli Morgan, Cody Poteet, Matt Festa, Caleb Thielbar and Rob Zastryzny in the Cubs’ bullpen.
The trade likely will conclude the bulk of the team’s winter moves.
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