Bluefield Daily Telegraph, Bluefield, WV

June 20, 2013

W.Va. Radio Corp. sues over media rights contract


Associated Press

MORGANTOWN — West Virginia Radio Corp. wants a judge to stop two companies from participating in West Virginia University’s attempt to award a new contract for multimedia rights to certain athletic events.

The lawsuit, filed late Wednesday in Monongalia County Circuit Court and reported by media outlets Thursday, says North Carolina-based IMG College and West Virginia Media Holdings should not be allowed to bid.

The radio company owned by Morgantown businessman John Raese has said it doesn’t plan to compete for the contract, but it calls the current process a sham.

WVU is rebidding the 12-year contract because a review by the state attorney general’s office found “significant errors and sloppiness” in how a previous deal inked with IMG in January was crafted. The school plans to choose the best new offer by Aug. 5 and announce the winner Aug. 23.

The lawsuit accuses WVU President Jim Clements, the WVU Board of Governors, Athletic Director Oliver Luck, the WVU Foundation, West Virginia Media President Bray Cary and several others of fraud, collusion, breach of fiduciary duty and “palpable abuse of discretion.”

WVU said it doesn’t comment on pending litigation.

Neither Cary nor the vice president of West Virginia Media Holdings immediately returned messages Thursday.

Raese cried foul earlier this year when WVU announced it had tentatively declared IMG the winning bidder for the first media rights contract. Attorney General Patrick Morrisey then reviewed allegations of misconduct and concluded that two WVU Board of Governors members shouldn’t have participated in reviewing the original set of bids. However, Morrisey said he found “no evidence of intentional wrongdoing.”  

Luck improperly provided confidential details of the proposed contract with IMG College to board chairman Drew Payne before its public release. Morrisey said Payne’s subsequent comments about the financial terms of the deal were also improper.

WVU suspended talks with IMG after reports that Payne and board member David Alvarez had ties to West Virginia Media, which was angling to subcontract with IMG.  

WVU’s broadcast rights are currently handled by the university-operated Mountaineer Sports Network, which works closely with West Virginia Radio.

The 206-page lawsuit claims Luck violated purchasing rules when he chose the consulting firm Rockbridge Sports Group to advise WVU on the first contract.

It also charges that the WVU Foundation violated state charity laws when it effectively forfeited a $5 million loan to West Virginia Media. It says the foundation invested $7.75 million in the company in 2001, and six years later sold its shares for $2.7 million.

Raese, a perennial Republican candidate for U.S. Senate, contends that amounts to an “improper and illegal investment” that let Cary’s company buy stations it otherwise couldn’t have afforded.

His company’s lawsuit also charges that WVU illegally acquired scoreboards for Milan Puskar Stadium, ignoring state rules that require purchases of more than $25,000 to be made through competitive bidding.

The lawsuit demand punitive damages for what it calls “outrageous and scandalous behavior.”

Raese pledges to donate any award to the WVU Foundation “to benefit the WVU Children’s Hospital,” after the deduction of legal fees.