The conference signed a deal with AT&T worth an estimated $90 million. Now a firm that helped execute it is suing.
The Pac-12 has been sued by a sports marketing company seeking compensation for its role in helping the conference secure a sweeping 2013 deal with AT&T worth tens of millions of dollars to the member universities.
The lawsuit alleges that the Pac-12’s refusal to compensate EMG, which had connections to top AT&T executives, “crippled” the company’s business.
EMG, which is based in Palos Verdes, is seeking an unspecified amount in damages.
It did not have a written contract with the Pac-12.
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“Anticipating a multi-million dollar fee for their work, EMG had invested thousands of hours into the deal and hundreds of thousands of dollars in expenses out of pocket,’’ according to a copy of the second amended complaint, which was obtained by the Pac-12 Hotline.
EMG estimates that the conference’s partnership with AT&T, which includes carriage on U-verse for the Pac-12 Networks, is worth $90,000,000 over five years.
The Pac-12 declined to comment. The conference and the Pac-12 Networks are named defendants.
“As a matter of policy, we do not comment on ongoing litigation,” a conference spokesperson said via email.
EMG has no current business deals but is an active corporation, according to its attorney, Philip Dracht.
The Pac-12 is expected to file a motion for summary judgment later this month, Dracht added. A trial date has been set for Jan. 10 in Torrance Superior Court.
The lawsuit, originally filed in Nov. 2015, made breach-of-contract claims against the Pac-12. That portion was thrown out by Judge Ramona See because EMG and the Pac-12 never entered into a written agreement.
Two causes of action were upheld by the court in the second amended complaint: quantum meruit and breach of quasi contract, according to documents.
Essentially, EMG is making the case that it had reasonable grounds to believe an oral contract was in place.
“We anticipate seeking a percentage of the deal as a fee,” Dracht said. “Companies would commonly give a sports-marketing firm a range of up to 20 percent.”
EMG’s relationship with the Pac-12 began in 2011, after the company was hired by UCLA to assist in a Pauley Pavilion naming rights deal with AT&T.
At the time, the not-yet-launched Pac-12 Networks were attempting to forge a relationship with AT&T, and EMG had strong ties to AT&T’s senior management team.
The complaint details communications from Pac-12 commissioner Larry Scott and Pac-12 Networks president Gary Stevenson to EMG officials about brokering a deal with AT&T:
“When EMG suggested an 8% commission on the deal, plus expenses, the PAC-12 expressed gratitude, acknowledged that an 8% commission ‘seemed fair’ given EMG’s involvement and continued involvement, and encouraged EMG to ‘make the deal with AT&T happen.’’’
Stevenson left the Pac-12 Networks in the spring of 2013. In September, the conference announced a partnership with AT&T that included carriage on U-verse and sponsorship opportunities. The terms were not announced and have not been revealed by the conference.
“Plaintiff is informed and believe that the $90,000,000 in estimated revenue was to be paid out to the PAC-12 throughout the 5-year period of the term of the deal,’’ the complaint states.
(If that figure is accurate, it would break down to $1.5 million per school per year.)
Approximately three months after the AT&T deal was finalized, the complaint states, EMG inquired about compensation and was told by Scott (via email) that “we did not and do not have an Agreement with EMG and will not be paying any fee to EMG.”
UCLA never signed a rights deal with AT&T.