Colorado State, Utah State suing Mountain West Conference over exit fees

Two departing members of the Mountain West Conference are suing the league with millions of dollars at stake.

Colorado State and Utah State filed a legal complaint on Monday in Colorado District Court in Denver over millions in exit fees that the Mountain West believes the schools owe.

CSU and USU are two of five schools that announced in September their plans to leave the Mountain West for the Pac-12 starting in July of 2026. Boise State, San Diego State and Fresno State are the other three. The Mountain West is requesting an exit fee of $19-38 million per school, according to the complaint.

In the complaint, Colorado State and Utah State argue that the exit fee is “invalid and unenforceable.” They accuse the Mountain West of “secretly amending” league bylaws during clandestine meetings held without the five departing members present. They also accuse commissioner Gloria Nevarez of striking “side deals” to enrich existing conference members — such as UNLV and Air Force — with the exit fees from those departing schools.

Though the other three departing schools are not part of the suit, they hold similar beliefs as Colorado State and Utah State. The legal complaint includes a letter sent to Nevarez on Nov. 22 from all five schools stating that the exit fees are invalid.

“The Conference’s attempt to impose the Exit Fee on the Five Institutions is improper and unenforceable,” the letter says. “The exit fee, which is completely untethered to any harm to the Conference from a member’s departure, is clearly designed to punish departing members and is therefore invalid as a matter of law.”

Mired now in a realignment struggle for members, the Pac-12 and Mountain West are at the center of the latest conference realignment shakeup. In a rebuilding effort, the Pac-12 turned to the Mountain West, raiding the conference of five schools and nearly luring away a sixth, UNLV.

UNLV and Air Force decided to remain in the Mountain West with promises of bonus payments estimated to be more than $20 million each — money expected to be derived from exit and penalty fees from the five departing schools.

Two legal filings now put those payments in question. Monday’s filing is the second legal action against the Mountain West. In September, the Pac-12 filed a suit against the conference over separate penalty fees that the Mountain West claims the Pac-12 owes for poaching its members.

The “poaching penalty” — around $55 million — was part of a scheduling agreement that the two leagues entered into last year. Aware of the Pac-12’s possible plans to rebuild with Mountain West members, Nevarez included the penalty in the agreement as a disincentive.

The two legal filings are a sign that the Pac-12 and its five new members do not intend to pay the penalty and exit fees, which, combined, totals $150-250 million. The exact amount is uncertain as the school exit fees are “three to six times” conference revenue distribution for the previous year — a figure not yet known.

In fact, in Monday’s filing, the schools describe both the penalty and exit fees as the Mountain West attempting to “double dip” by seeking two recoveries for the same injury — millions of dollars that the suit says would result in a “windfall” for the conference.

At the core of Monday’s filing is a familiar contention from the schools. Because they have not formally provided the Mountain West with notification of exit, the schools contend that they are entitled to be part of conference meetings. This claim is a similar one that was used by departing members of the Pac-12 over legal issues last year against Washington State and Oregon State.

Despite a public announcement of their impending departure to the Pac-12, the schools say they remain full voting members of the Mountain West. The conference has continued to meet without proper notice and without the members and has refused to produce to departing members the minutes of those meetings, according to the lawsuit.

According to the filing, the Mountain West is planning to withhold distribution from the departing members as a way to reclaim a portion of the exit fees. The distribution is not only from conference television rights but also includes College Football Playoff distribution as well as playoff travel reimbursement distributed to the conference from the CFP. Boise State, a Mountain West member, advanced to the field this year as the playoff’s No. 3 seed.

The Pac-12’s rebuild, meanwhile, is not yet complete. The league needs to add one more full, football-playing member to reach the NCAA’s eight-school requirement. The league’s current membership includes the five schools from the Mountain West, plus Washington State and Oregon State and non-football playing member Gonzaga.

The Mountain West has reached its full membership, adding UC Davis, Hawaii, Grand Canyon and UTEP, and is in negotiations with Northern Illinois to add the Huskies as a football-only member. Other original Mountain West members include Air Force, Nevada, New Mexico, San Jose State, UNLV and Wyoming.