Judge denies request to void WVU, IMG contract

A state judge has denied a West Virginia Radio Corp. request to throw out the media rights contract between West Virginia University and its multimedia partner IMG College.

Business Court Division Judge Thomas Evans issued the ruling Thursday, which clears the way for WVU’s athletic department to continue working with IMG and its partners to broadcast and promote WVU sporting events.

For more than a year, West Virginia Radio, owned by Morgantown businessman John Raese, has been in a protracted legal battle with the university over its handling of outsourcing the athletic department’s multimedia rights.

West Virginia Radio, which had for decades worked with WVU’s Mountaineer Sports Network to broadcast football and basketball games on radio, was an early but unsuccessful bidder for those rights.

The university’s initial bidding process was scrapped after Raese raised objections regarding the involvement of WVU Board of Governors members Drew Payne and David Alvarez, who have financial ties with Bray Cary’s West Virginia Media, which planned to partner with IMG should it be awarded the contract.

After a second round of bids — in which West Virginia Radio Corp. did not participate — the school last July awarded a contract to North Carolina-based IMG College to manage its multimedia properties, including management of local radio and television game broadcasts and coaches shows; publications including media guides and schedules; digital platforms, such as social media and websites; corporate sponsorships; at-event promotions and game day hospitality; stadium and venue signage; and advertising in university-owned and leased athletic facilities.

The contract guaranteed IMG would pay the school a minimum of $86.5 million over a 12-year period.

The radio company then filed a civil lawsuit against the school, IMG College, West Virginia Media, WVU Athletic Director Oliver Luck, Payne, Alvarez and others, which was eventually transferred to the state’s Business Court Division.

In February, West Virginia Radio filed a motion for summary judgment in the case, asking a judge to void WVU’s contract with IMG due to claims school officials violated state procurement laws.

Evans heard arguments on the matter in May and issued his ruling last week.

Evans denied West Virginia Radio’s request to void the contract over alleged violations of state procurement laws because, the judge ruled, those laws don’t apply to this particular bid process.

State law states any purchases by a state agency in excess of $25,000 must go through a competitive bidding process. If violations occur in the bidding process, the law says any subsequent contract can rendered void.

However, Evans said WVU wasn’t buying anything with its multimedia rights contract; rather, the contract was designed to generate money for the school.

“With a revenue-generating contract, WVU (Board of Governors) is not ‘purchasing’ goods or services,” Evans wrote in his decision. “No money is paid by WVU to IMG for the services that are subject to the (media rights agreement).”

Evans also said it was clear the statute didn’t apply in this case because it specifies purchases must be awarded to “the lowest responsible bidder.”

“A revenue-generating contract is ordinarily awarded to the ‘highest’ responsible bidder,” Evans said in his ruling. “The statue does not state that revenue-generating contracts are an exception to the ‘lowest responsible bidder’ standard. Revenue-generating contracts are not mentioned in the statute.”

Evans’ ruling lines up with a similar finding last April from state Attorney General Patrick Morrisey, who, after investigating the matter following Raese’s initial round of complaints, determined WVU did not need to bid out the media rights contract because it was revenue-generating.

WVU does have its own internal procurement rules regarding revenue-generating contracts that were drawn up using state law as a basis. While those internal rules could have been violated in the IMG bidding process, Evans said the rules can’t be used as a basis to void the contract under the law because “rules cannot enlarge statutory enactments.”

This is not the first time West Virginia Radio has lost in an attempt to block WVU’s contract with IMG. Last August, the judge denied a request for an injunction that would have stopped WVU from partnering with IMG a week before the start of last year’s football season.

Though Evans has thrown out West Virginia Radio’s request for summary judgment to void the WVU-IMG contract, it is not the end of the case.

He ruled the allegations made regarding improper activity by parties at WVU, including Alvarez and Payne, were issues to be dealt with at a trial.

Contact writer Jared Hunt at business@dailymailwv.com or 304-348-4836.

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