Boise State, former Big East still fighting over $5 million exit fee

By Brian Murphy
bmurphy@idahostatesman.com

It seems like forever ago, but Boise State once agreed to move to the Big East in football and the Big West in other sports on this day — July 1, 2013. The Broncos changed their mind when the Big East divided into two leagues (the Big East for basketball schools and the American for football schools) and opted to remain in the Mountain West with certain financial incentives.

Here is my January story on how Boise State ended up staying in the Mountain West.

In April, Boise State sued the Big East (now the American) to get out of the $5 million penalty the conference says Boise State owes for reneging on its promise to join the league.

The American countered with a suit of its own for the full $5 million exit fee. The two parties have gone back and forth with the American responding to Boise State’s initial claim and Boise State responding to the American’s countersuit.

The case looks like it will be fought over the Dec. 6, 2011 “agreement” between Boise State and the then-Big East Conference (now American).

Boise State calls the deal a “memorandum of understanding” with an effective date of July 1, 2013 “at which time Boise State could become, and would become a ‘football only member,’ assuming certain conditions … were met and absent breaches of the MOU by the Conference.”

The American says no. It denies that “the agreement is a ‘memorandum of understanding.’” Instead, the American says the agreement “is a valid and enforceable contract with took effect upon its execution and delivery in December 2011.”

The Dec. 6, 2011 agreement says “in the event the University refuses to join the Conference on the Effective Date … the University will pay the Conference a fee … in the amount equal to Five Million Dollars ($5,000,000) and which shall be paid in full immediately upon the date of such refusal, inability or failure.”

The deal spells out conditions on which Boise State might pay less, including if the Conference loses its “automatic qualifier” status for the purpose of the Bowl Championship Series (other than the result of the elimination of “automatic qualifier” generally.

The fee falls to $1 million if, “prior to the Effective Date, there is a decrease of 25% or greater in the aggregate total revenue of the Conference from the prior fiscal year.”

The American claims that Boise State, after agreeing to join the league, asked for special treatment, including a minimum amount of revenue, the ability to sell its the television rights for future home football games and the removal of exit fees.

The conference claims that Boise State “entered into separate negotiations” with television networks to broadcast home football games — and that these secret negotiations (taking place at the same time as the Big East was negotiating its television rights) affected the league’s negotiations.

Boise State denies those allegations.

The conference accuses Boise State of using its agreement with the then-Big East to “leverage more favorable terms from the Mountain West.” It also says that Boise State President Bob Kustra said at a January 2013 press conference that “had Boise State not first agreed to join the conference, … then Boise State would not have received such lucrative terms from the Mountain West.”

In its reply, Boise State denies that allegation.

The actual quote splits the difference.

“The irony of this entire last six months is that had we made the decision to stay in the Mountain West in June, we would not have the opportunity to negotiate and arrive at what we have today,” Kustra said on Jan. 2 at the press conference announcing Boise State’s decision to stay in the Mountain West.

Kustra is talking about the Broncos’ June decision to withdraw from the Mountain West, not referencing the original decision to join the Big East. But Kustra is certainly implying that the Broncos got a better deal by having the then-Big East’s agreement as leverage.

The we-said, they-said is likely to continue. Boise State football coach Chris Petersen will be deposed in the case on July 22. Athletic director Mark Coyle on July 23 and Kustra on July 24. A teleconference with both parties and the judge is scheduled for July 26. Boise State said there are no dates set for the depositions.

Sports columnist Brian Murphy writes about all sports in the Treasure Valley with a concentration on Boise State football and men's basketball. Murph has been with the Statesman since 2005. You can follow him on Twitter @MurphsTurph.

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