Iowa State retains legal rights, could sue Texas A&M, SEC individually

AMES - Iowa State University has retained all legal rights and could pursue legal action against Texas A&M or the Southeastern Conference outside the jurisdiction of the Big 12 Conference, Iowa State spokesman John McCarroll said Wednesday.

"We haven't waived any right regarding anything related to this issue," McCarroll said. "I guess you could say, yes, we've retained our rights.

"We haven't signed anything. We haven't verbally waived any rights. That's true."

Texas A&M officials announced last week the school plans to leave the Big 12 Conference. On Sept. 2, Big 12 Commissioner Dan Beebe assured SEC Commissioner Mike Slive the Big 12 Conference Board of Directors guaranteed none of the schools would sue either the SEC or Texas A&M. Last night, the SEC's presidents unanimously accepted Texas A&M as the league's 13th school as long as there were "no contractual hindrances to its departure," Dr. Bernie Machen, University of Florida president and chair of Southeastern Conference Presidents and Chancellors said in a statement.

However, at least one Big 12 school - reportedly Baylor - threatened litigation against Texas A&M and the SEC. In a letter to Slive dated today, Beebe wrote that while the Big 12 Conference Board of Directors would not sue the SEC, the action "was not binding on the individual institutions' governing boards."

"If you seek waivers by the individual institutions, you must receive them from those institutions directly," Beebe wrote. "I regret any confusion on this issue."

Beebe later released a statement and tried to explain the situation.

"This is the first time to my knowledge that a conference has been requested to waive any legal claims toward another conference for any damages suffered with a membership change," Beebe wrote. "The Big 12 Conference was asked by Texas A&M University and the Southeastern Conference to waive any such claim to help facilitate Texas A&M's departure from the Conference without any consideration to the Big 12. Although they were not obligated to do so, the Big 12 Board of Directors decided to accommodate that request as it relates to The Big 12 Conference, Inc., which is reflected in the September 2 letter sent to SEC commissioner Mike Slive. 

"However, the waiver did not and could not bind the individual member institutions' governing boards to waive institutional rights. If the departure of Texas A&M results in significant changes in the Big 12 membership, several institutions may be severely affected after counting on revenue streams from contracts that were approved unanimously by our members, including Texas A&M. In some cases, members reasonably relied on such approval to embark on obligations that will cost millions of dollars."

Texas A&M's departure cuts the Big 12 to nine schools, and others within the league have held discussions with other conferences. Should the Big 12 ultimately disband, the moves are potentially catastrophic for Iowa State. The school could be left out from any major conference, which could cost the school millions of revenue annually.

In fiscal year 2009, the Big 12 Conference earned $144 million and generated nearly $70 million in television revenue. The league dispersed more than $8.9 million to Iowa State. In fiscal year 2010, Conference USA - a possible landing spot for Iowa State - earned less than $49 million in revenue and $15.787 million from television. East Carolina earned the most from league sources at $4.24 million.

Last year, the Big 12 faced a similar crisis when Nebraska and Colorado left the league for the Big Ten and Pac-10, respectively. Several Big 12 schools, including Texas and Oklahoma, were courted by the Pac-10 (now Pac-12) but ultimately chose to stay in a revamped 10-school conference. Nebraska ($9.225 million) and Colorado ($6.863 million) paid exit fees to Big 12 schools totaling more than $15 million.

Several Big 12 schools, including Iowa State, last summer offered to guarantee Texas, Oklahoma and Texas A&M $20 million in television revenue if they stayed with the league. Iowa State and the other schools volunteered to transfer their share of exit fees to Texas, Oklahoma and Texas A&M if none reached $20 million beginning with the 2012-13 school year.

"A key part of Texas A&M's decision to remain in the Big 12 earlier this summer was the commissioner's commitment that Texas A&M would receive a minimum of $20 million annually in future conference distributions,” Texas A&M President R. Bowen Loftin said in a statement last July. “We remain committed to the conference and fully anticipate that the Big 12 will honor its commitment to Texas A&M.”

A new television contract with Fox, a second-tier rights holder, ensured Iowa State would not have to pay those three schools from its share. Agreements earlier this year could have positioned Iowa State with around $17 million annually from television revenue.

"If the TV contract didn't deliver that level of dollars, we would pool our resources to make those schools whole," said Steve Malchow, Iowa State's senior athletics director for communications. "But we knew positively that the contract would reach those levels, so it wasn't going to happen anyway."

Malchow deferred any additional comment on the situation involving Texas A&M and the Big 12 Conference to Iowa State's presidential office, but added, "there's probably a lot of conversations going on, I'm guessing."