Universities sue Mountain West Conference over multimillion-dollar exit fees
Amanda Pampuro
DENVER (CN) — Colorado State and Utah State universities sued the Division I college sports Mountain West Conference on Monday over what they call retaliatory multimillion-dollar exit fees when they opted to join the Pac-12 Conference instead.
“In a desperate attempt to prevent further membership departures, the Mountain West and commissioner [Gloria] Nevarez have willfully disregarded the conference’s bylaws to take actions that the board did not and would never have approved,” the universities say in a 30-page complaint filed in the District Court for the City and County of Denver.
The Mountain West currently brings together 13 universities across more than a dozen intercollegiate sports, including football, soccer and volleyball. In addition to bringing schools together for competition, National Collegiate Athletic Association conferences can generate revenue for schools by selling lucrative media rights.
Boise State, California State University, Fresno, and San Diego State University also announced departures from the Mountain West in September, though they are not currently parties to the suit. Colorado State and Utah State plan to officially join Pac-12 in June 2026 when their current media rights agreement expires.
The universities claim members of the Mountain West Conference and its commissioner met without giving exiting members adequate notice, and then amended the organization’s bylaws to remove their representation from the board.
In addition to refusing to reimburse the universities for travel and postseason football games, the conference is threatening to levy exit fees in the tens of millions of dollars.
During one board meeting, the conference sought to require “resigning members to each pay exorbitant and ill-defined ‘exit fees’ as a penalty for resigning from the conference,” the plaintiffs say in the complaint. The $19 million to $38 million exit penalties are three to six times members' previous annual distributions and are to be paid on top of a $10 million-plus withdrawal fee.
“The exit penalty itself is excessive, punitive, and bears no reasonable relationship to the estimated harm that the Mountain West may suffer should a member elect to resign from the conference,” the universities say in the lawsuit.
The exit fees, according to the complaint, will fund bonuses to incentivize other universities to remain in the sporting conference.
Besides being improperly passed without a three-fourths quorum, as required by the bylaws, the universities say the punitive fees violate Colorado’s Antitrust Act.
“While it is unfortunate that the conference and its commissioner have taken actions designed to penalize the departing members, all five departing members stand united in their duty to protect the rights and interests of their institutions, student-athletes and fans,” the universities' attorney Steve Olson, of the Los Angeles firm O'Melveny, said in a statement.
The universities ask the court to declare the Mountain West’s exit fees unenforceable and to order the conference to turn over records for inspection.
Representatives from the Mountain West Conference did not immediately respond to an inquiry for comment.
The Pac-12 sued the Mountain West in September in the Northern District of California claiming the Colorado organization imposed an unlawful "poaching penalty" against the California group.
In a November federal lawsuit, a group of volleyball players challenged the Mountain West Conference's policy to allow transgender athletes to play on women’s teams, a rule a federal judge refused to enjoin ahead of this year’s championship.