Morgantown businessman John Raese says West Virginia University should rebid its third tier media rights for failing to follow its own and state purchasing rules and regulations.
Raese tells WVU President Jim Clements in a letter dated Thursday the problems are “clear as mud.”
(Read letter here.)
The university recently suspended its request for proposals process in granting of the rights, which includes the broadcasts of Mountaineer sporting events, to IMG College for what WVU’s attorney Bill Hutchens called Raese’s “complaint or protest.”
But Raese’s most recent letter says his concerns are much broader than the bid process and should be considered as such.
Raese also says that to show his concerns aren’t based on “sour grapes” his companies will not submit a bid if the current proposal process is canceled and rebid. West Virginia Radio did submit a bid in the process currently on hold.
Raese’s West Virginia Radio Corporation has distributed Mountaineer football and basketball broadcasts for decades. He has questioned the relationship between WVU Board of Governors Chairman Drew Payne, IMG College and West Virginia Media Holdings, believed to be part of the third tier deal. Payne was an original investor in West Virginia Media and recently said he still has about $500,000 in the company.
Raese asks Clements if he’s asked Payne to resign as BOG chairman. Raese says Payne’s “conduct, actions and statements” in connection with the controversy are “unacceptable” for someone in Payne’s position with the BOG.
Raese also tells WVU President Clements in the Thursday letter that he’s asked state Attorney General Patrick Morrisey to investigate his public integrity concerns.
“My recollection is that he ran on a ‘public integrity’ platform this fall and has initiated a ‘public corruption unit.’ I’m not suggesting at this time that any public corruption took place here but it is obvious to all concerned that the purchasing process for this Proposal was not in compliance with either State or University purchasing rules and regulations. This needs to be looked into by the Attorney General,” Raese wrote.
Raese also makes several other requests of WVU. He wants to know information about the decision from university Athletic Director Oliver Luck to award the Bob Huggins TV show to WV Media. Raese says Huggins is also a WV Media investor. Raese also wants some answers about an athletic department loan from the WVU Foundation that was used to purchase scoreboards.
“I would ask you if State or University procedures, rules, or regulations were complied with in the acquisition of these scoreboards?” Raese asked Clements.
West Virginia University temporarily has put a hold on the finalization of the agreement to contract its athletic department’s multimedia rights to IMG College on Tuesday. The stoppage is a standard response to a third party protesting the awarding of a contract at WVU — in this case, Morgantown businessman John Raese’s letter asking that WVU President Jim Clements look over what Raese has claimed is a conflicted process.
The procurement office will examine Raese’s allegations in a formal manner. If the review fails to validate the allegations, WVU and IMG College can proceed with their 12-year deal that could carry an overall value of $110 million with incentives. If the review confirms Raese’s suspicions, WVU could be forced to restart the process. In the meantime, neither side can work together on the contract or negotiations.
WVU and IMG College had been on track to finalize a lucrative deal for WVU’s Tier 3 rights, which cover various marketing, advertising and broadcasting opportunities and most notably the radio rights for football and men’s basketball games.
Considering the spike in athletic expenses associated with paying a $20 million exit fee to the Big East, additional travel and recruiting costs associated with now being a member of the Big XII and a large spike in elevated coaches salaries required to lure perennial Top 10 coaching talent led by Head Coach Dana Holgorsen — one of the nation’s most sought-after young offensive-minded coaches — it is easy to see why Athletic Director Oliver Luck is leaving no stone unturned in his quest to raise athletic revenues.
On Jan. 18, WVU sent IMG College, the industry leader in multimedia rights with more than 80 collegiate clients, a letter stating its intent to award IMG College the contract. Media sources have reported that WVU was expecting to make $5 million more than the $4 million it was making every year while controlling the Tier 3 rights independently.
Raese, owner of West Virginia Radio Corp., which has held the radio rights for years and also was a part of the bidding process for the Tier 3 contract, questioned certain ethical elements of the deal. He highlighted an apparent pending partnership between IMG College and West Virginia Media Holdings, a company that has produced coaches’ shows for the football and men’s basketball programs the past two years.
We must give John Raese his due. He created a state-wide radio network to broadcast WVU games when there was little interest in doing so from other broadcast properties. This resulted in a long-term no-bid contract arrangement with the Mountaineer Sports Network — which has been solely owned and operated by the WVU Athletic Department — in conjunction with the Raese’s network.
As WVU athletics has risen to its current level as a consistent Top 25 program in both football and men’s and women’s basketball, the inherent value of the broadcasting rights increased with it. As a result, more and more people took an interest in Raese’s sweetheart arrangement.
Then along came Oliver Luck, a former WVU quarterback, Academic All-American and Rhodes Scholar finalist who spent several years in the NFL with the Houston Oilers, followed by stints as Commissioner of NFL Europe and president and general manager of the Houston Dynamo of Major League Soccer — all of which gave him the worldly experience and the ability to have a vision of what Mountaineer athletics could become.
Luck’s vision however would come at a price. Fortunately for WVU, Luck positioned the school for admittance as a member of the Big XII just prior to the near collapse of the Big East.
Raese stated that there was an “appearance of impropriety” because Drew Payne, the chair of WVU’s Board of Governors, previously held a major stake in West Virginia Media Holdings and sits on the company’s board of directors while still in possession of a smaller share of the company. Payne has consistently denied wrongdoing and stated he was neither involved in nor guilty of influencing the process.
In a Feb. 8 story reported in the Charleston Daily Mail, Payne said “John Raese has a very lucrative deal up there with West Virginia Radio and he is trying to protect it.”
The truth is that in today’s world of big-time college athletics that a company such as IMG is simply better suited to maximize revenue when it comes to Tier 3 advertising and broadcasting rights. Bray Cary and WVMedia Holdings was wise to bet on an industry leader and position itself as a sub-contractor for Tier 3 television broadcasting rights. Perhaps John Raese should have made a similar move in terms of sub-contracting for the radio broadcasting rights.
We understand that he doesn’t want to let go of a good thing. But we question how Raese can complain about what he claims is a “conflicted process” when he has had his way all of these years as a true ìMountaineer Insider.
It’s hard to argue that there are about $5 million reasons why granting the Tier 3 rights to a company like IMG makes sense for WVU. Kudos to Oliver Luck for doing his job and for doing what is in the best long-term interests of his alma mater.
Fortunately for WVU, Luck positioned the school for admittance as a member of the Big XII just prior to the near collapse of the Big East.Not according to some... some would say it was a mistake
Kudos to Oliver Luck for doing his job and for doing what is in the best long-term interests of his alma materOnce again some would say it was a mistake and that he only has money grabbing interests in mind