Judge denies injunction but lets lawsuit proceed

MORGANTOWN, W.Va. — A judge denied West Virginia Radio Corp.’s request for a temporary injunction against WVU’s media deal with IMG College, but he allowed the case to proceed noting that allegations of bidding corruption “cannot be ignored.”

Judge Thomas Evans said a permanent injunction may still result as the case moves forward to trial. However, he refused to suspend WVU’s current contract with IMG, citing that broadcast arrangements couldn’t be reconfigured a mere five days before the start of the football season. WVU hosts its football opener Saturday against William & Mary, a game whose radio broadcast will be handled through IMG College, ending a seven-decade run on WVRC’s network.

WVRC had asked Evans to stop WVU from implementing a 12-year contract with IMG College worth $86.5 million. The network claims the contract, signed in June after a second round of bidding, should be stricken because of fraudulent missteps by the university—and specifically athletics director Oliver Luck—during the first round of bidding.

“Can WVU simply cancel the first request for proposals?” Evans asked nearly seven hours after Monday’s proceedings began. “That’s an unanswered question in my mind.”

Evans denied motions to dismiss from 10 defendants named in the civil suit—including Luck, WVU president Jim Clements, the WVU Board of Governors, board chairman Drew Payne, board member Dave Alvarez, and West Virginia Media Holdings president Bray Cary.

Luck was barred from overseeing the second round of third-tier rights bidding after West Virginia Attorney General Patrick Morrisey confirmed Luck shared confidential information with Payne, a stakeholder in West Virginia Media. Morrisey’s report also questioned Luck’s autonomous decision last October to add three members to the evaluation team when the other original panelists—deputy athletics director Mike Parsons and associate AD for business operations Mike Szul—didn’t give immediate approval to the IMG College/West Virginia Media bid.

WVRC’s suit charges Luck with “improperly, incompetently, and unlawfully managing the media rights RFP process.” WVRC claims the university subsequently tailored the second media rights bidding “to render WV Media’s partner, IMG College, the only qualified bidder, thereby transforming the RFP process into a sham.”

WVU’s attorneys argued an injunction so close to the season would leave the school without a media rights partner and would cause undo harm to IMG and new radio affiliates who within the past month agreed to broadcast Mountaineers football games this fall.

“The public has an interest in these sorts of (broadcasts) not being disrupted,” the judge said. “On the flip side, the public interest is very high in making sure that public contracts are left in conformance with the statutes. That’s kind of a mixed bag there.”

Even as he decided against a temporary injunction, Evans warned the university’s attorneys that this “is not the end of the injunction issue.”

“There are very, very serious allegations of misconduct,” said the judge, who went on to describe the matter as “an extremely complicated case.”

Even the fact that Evans wound up on the bench was a point of contention. The Jackson County circuit judge replaced Monongalia County Circuit Judge Phillip Gaujot after WVRC asked that Gaujot be disqualified based on a 26-year-old disagreement he had with Greer Industries attorney Robert Gwynne. (Greer is the parent company of WVRC, which also operates MetroNews.) State Supreme Court Chief Justice Brent Benjamin subsequently replaced Gaujot with Evans.

Some snippets from the courtroom Monday:

• WVRC attorney Frank Simmerman Jr. claimed WVRC’s initial bid for third-tier rights was worth $78 million over 10 years and that IMG College’s initial bid—the one wiped out after the attorney general’s review—was worth only $70 million.

• Simmerman also questioned whether IMG’s second bid actually included $86.5 million guaranteed as the school claims. “What’s a guarantee?” Simmerman asked, pointing to the lack of a performance bond or payment bond within the contract. “I’ll respectively submit that upon review of the contract you won’t find one. There’s not one.”

• WVRC attorney Bob Gwynne on Monday’s rulings:
“Through the course of today’s hearing we demonstrated that West Virginia Radio’s bid for the third-tier media rights was, in fact, superior to IMG’s bid. And further we proposed a solution that would deliver Mountaineer football and men’s basketball to more WVU fans than IMG can reach—a solution refused by WVU and IMG. Although we are disappointed by the court’s decision not to grant a preliminary injunction, it is clear the court understands the seriousness of our allegations and the importance to West Virginia Radio and the public at large of insuring that WVU maintain and apply fair and appropriate procurement practices. In light of the court’s decision to deny all defendants’ motions to dismiss our claims, this case shall proceed and the truth shall come out.”

• Charleston attorney Heather Jones, on behalf of IMG, said the international firm had hired six sales team members at a cost of $350,000.
“We’re not just talking about money,” Jones said. “We’re talking about human beings who have made personal sacrifices to move from across country—taking new jobs, moving their households—all to support West Virginia University and to help it expand its brand, expand its marketing and support its broadcast of its athletics.

“(Blocking this contract) would be a crime to West Virginia University and a crime to our state. We’re lucky that IMG wants to do business with our state.”

• Simmerman admitting a time crunch would have been created by a temporary injunction: “I recognize that there is a game this weekend. I recognize that the game must be broadcast. I didn’t come in and ask of this court to disappoint all the fans in the state of West Virginia. I wish we had been heard early on. I wish we had been heard in March and could have resolved this timely.”

He presented an injunctive alternative that would allow IMG to broadcast football games and WVRC to broadcast the basketball season “to afford this court an opportunity to work through these issues.” Simmerman cited “large gaps in coverage under the (IMG) network” and that WVRC would offer three affiliate stations—WELK in Elkins, WVMD in Romney and WQZK in Keyzer—to plug the gaps in football coverage in 2013.

But WVRC offered to do so under the arrangement of the Mountaineer Sports Network and not IMG’s guidelines.

• WVU board of governors attorney Jeff Wakefield objecting to WVRC’s plan: “West Virginia Radio is attempting to get that which it could not get in the competitive marketplace. … The court is getting involved in the business of trying to craft how media rights are going to be handled.”

• Judge Evans on why WVRC has a claim for a temporary injunction: “I do believe that, based on the allegations in the complaint, there is irreparable harm to the plaintiff. … How about the loss of business reputation in the community where they’ve been an established vendor for, I think I heard 72 years? To lose that through a process that is corrupt, that is something that is not quantifiable.”

• Judge Evans on why WVRC shouldn’t be granted the temporary injunction: “If the court should say that the contract with IMG is—at least on a temporary basis—rescinded, IMG is going to have some legal difficulties with people with whom they contracted to provide goods and services.” He was speaking of the football affiliates IMG has been lining up market-by-market the past eight weeks.

• WVU’s official response to Monday’s rulings:
“West Virginia University officials are pleased with the Honorable Judge Thomas C. Evans’ ruling today in Monongalia County Circuit Court denying a preliminary injunction in West Virginia Radio Corp.’s civil case versus the WVU Board of Governors and others. We look forward to continuing a great relationship with our new partner, IMG College.”

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