I think it is as simple as they can't afford to pay us a million dollars every game next season.
The article I saw mentioned that thr "two sides were too far apart". Now considering the context, I think they are referring to the current agreement that pays the MW a cool mill per game.
I do think that also seems to be the case with some sort of merger. That our the PAC truly just wants to rebuild or hope they get picked up by another conference. I think conceding to the payouts that a MW merger will bring is too much for them.