Rekubit Exchange:Pac-12 Conference countersues Holiday Bowl amid swirling changes

The Rekubit ExchangePac-12 Conference has countersued the Holiday Bowl in San Diego over a $3.4 million payment the league says it was owed for the game in December 2022, adding to the issues being sorted out by the league after it fell apart last year in the latest wave of college realignment.

The Pac-12’s countersuit comes about eight months after the Holiday Bowl first sued the Pac-12 in May in San Diego County Superior Court. In that lawsuit, the nonprofit bowl game sought payback from the league after the Holiday Bowl game in 2021 was canceled amid COVID-19 issues with players for UCLA, a member of the Pac-12.

“Holiday Bowl has breached the Agreement by failing and refusing to make any payment to (the Pac-12) in connection with the 2022 Holiday Bowl Game,” the Pac-12’s countersuit states. “Holiday Bowl’s breach is not justified or excused.”

The Holiday Bowl claimed last year that it suffered more than $7.8 million in losses from the canceled game in 2021 and later tried to offset this by withholding its required payment to the Pac-12 for the game that took place in 2022 between North Carolina and Oregon, another Pac-12 member.

Now the Pac-12 is asking the court to help the league collect.

Backdrop of Pac-12 issues

This court action comes even though the Pac-12 membership has been reduced to two members for 2024: Oregon State and Washington State. Those two schools recently gained control of the league’s governing board, which retained the league’s assets and future revenues.

The two schools have two years to chart a new future while staying in the “Pac-2,” which could include combining with the Mountain West Conference.

It's a time of swirling change for the league, as 10 of its other members get ready to depart later this year for the Big Ten, Big 12 and Atlantic Coast Conferences. The 10 departing schools agreed to “provide specific guarantees against potential future liabilities” for the Pac-12, though it’s not clear if that could include what may come of this bowl game litigation.

On Tuesday, the league also issued a statement about the future of Pac-12 commissioner George Kliavkoff, who replaced Larry Scott in 2021.

“The Pac-12 Conference Board has given the departing 10 schools notice of a proposed leadership transition with an invitation to provide comment,” the statement said. “We expect to provide more information following a decision in the coming days.”

What is the countersuit seeking?

The Pac-12's countersuit was filed Jan. 19 but hasn't been previously reported. It accuses the Holiday Bowl of breach of contract and seeks a judgment in its favor according to proof. It says the Holiday Bowl agreed to make a $3.4 million minimum payment to the league after every game in which the Pac-12 participates through 2025.

By contrast, the Holiday Bowl stated in its lawsuit against the Pac-12 last year that the payout obligation to the league for the 2022 game was reconciled at $2.45 million – an amount withheld by the Holiday Bowl to offset larger losses from the canceled game in 2021.

The dispute essentially comes down to whether the Pac-12’s nonperformance in that 2022 game was excused under the "Force Majeure" provision in its contract, which covers "any unavoidable casualty, which cannot be reasonably forecast or provided against."

The bowl game said the force majeure clause “could have been negotiated to included pandemic impacts and considerations but was not.”

The Pac-12’s countersuit also goes a step further and invokes the Holiday Bowl game from 2020, which was canceled months in advance during the middle of the pandemic.

“Holiday Bowl has breached the Agreement by failing and refusing to make any payment to Cross-Complainant in connection with the 2020 Holiday Bowl Game,” the Pac-12’s lawsuit states. “Holiday Bowl’s breach is not justified or excused. As a result of Holiday Bowl’s breach of the Agreement, Cross-Complainant has been damaged in an amount to be determined.”

Follow reporter Brent Schrotenboer @Schrotenboer. Email: [email protected].