The NCAA: Still Operating in Smoke-Filled Rooms

Posted by David von Ebers |

In 1981, the University of Oklahoma and the University of Georgia sued the National Collegiate Athletics Association for violating Section 1 of the Sherman Antitrust Act, 15 U.S.C. ? 1, which prohibits ?contract[s], combination[s] in the form of trust or otherwise, or conspirac[ies], in restraint of trade or commerce among the several States, or with foreign nations.? The gist of the lawsuit was that the NCAA?s strict rules governing the right to televise intercollegiate football games violated the Sherman Act by restricting output (i.e., the number of games that could be televised) and by fixing prices (the NCAA effectively determining the payment each school received for each televised game).

The United States District Court for the Western District of Oklahoma ruled in favor of the Universities, and that ruling was upheld by both the Court of Appeals for the Tenth Circuit, and, ultimately, the Supreme Court. National Collegiate Athletic Association v. Board of Regents of the University of Oklahoma, 468 U.S. 85 (1984). As the Supreme Court explained, after a lengthy trial, the District Court concluded that with regard to televised college football, the NCAA functioned like a ?classic cartel,? having:

?almost absolute control over the supply of college football which is made available to the networks, to television advertisers, and ultimately to the viewing public. Like all other cartels, NCAA members have sought and achieved a price for their product which is, in most instances, artificially high. The NCAA cartel imposes production limits on its members, and maintains mechanisms for punishing cartel members who seek to stray from these production quotas. The cartel has established a uniform price for the products of each of the member producers, with no regard for the differing quality of these products or the consumer demand for these various products.?

NCAA v. Board of Regents, 468 U.S. at 96, quoting Board of Regents of the University of Oklahoma v. National Collegiate Athletic Association, 546 F. Supp. 1276, 1300-1301 (W.D. Okla. 1982).

That?s some serious smoke-filled room nonsense right there, and, in the end, the courts enjoined the NCAA from enforcing its rules governing the broadcast rights to college football games.

The outcome of NCAA v. Board of Regents proved to be an enormous financial boon to member schools? athletic departments. Under the plan the courts threw out, the NCAA had restricted broadcast television rights to two networks ? ABC and CBS ? and sharply controlled the number of games that could be televised; the number of times any one school could appear on television; and the fees to be paid each school, with the highest fee being $600,000 for a nationally televised Division I game. See NCAA v. Board of Regents, 468 U.S. at 92-94. Today, far more networks televise college football games; schools aren?t limited to a certain number of television appearances per year; and television revenues have skyrocketed. According to the National Football Post, the sport now generates about $10 billion in television revenues annually ? as compared to the plan struck down in NCAA v. Board of Regents, which would have cost ABC and CBS around $132 million over four years.

One thing that hasn?t changed, of course, is that the people who do the heavy lifting, literally and figuratively, don?t get paid. Yes, of course, top athletes receive scholarships, and, if they?re able to juggle the demands of their sports and the demands of the classroom, those scholarships can have real value. But athletic scholarships aren?t even remotely commensurate with the amount of revenue those athletes? labor generates.

That may be changing, however. In a lawsuit brought by former UCLA basketball standout Ed O?Bannon, a California judge ruled last January that college athletes could pursue a claim against the NCAA for a share of television revenues. The suit also challenges the NCAA?s licensing of players? images and likenesses to EA Sports, which produces NCAA football- and basketball-themed video games, and to Collegiate Licensing Co. The NCAA, of course, scoffs, arguing ?the lawyers in the likeness case ? want to make this about professionalizing a few current student-athletes at the detriment of all others. Their scheme to pay a small number of student-athletes threatens college sports as we know it.?

Oh, really? Criticizing the plaintiffs? lawyers for making this about the revenue generated by a small group of elite college athletes, to the detriment of others? That?s interesting. Because guess who?s selling elite football players? jerseys on its website, despite the fact that its rules appear to prohibit that very thing? Why, the NCAA, that?s who. Via Think Progress, ESPN?s Jay Bilas recently discovered that if you searched a player?s name like ?Johnny Manziel? or ?Marqise Lee? on the ?NCAA Shop? section of the organization?s website, lo and behold, their jerseys would appear ? for a mere $49.95 to $89.95, depending on the style. Once caught, the NCAA deleted the search function ? because lord knows they wouldn?t want anybody to know that they?re making money off of star players, which, of course, everybody knows anyway.

But I?ve come to expect this kind of hypocrisy from the walking anti-trust violation known as the NCAA. They make billions off their players? labor and millions of their players? names and likenesses, but it?s all in the name of preserving amateur sports, right?

I just wish they?d be honest about it, you know? They should wear gray fedoras and pinstripe suits with broad lapels. They should smoke oversized Cuban cigars and swill bootleg gin in fancy martini glasses. I mean, if you?re going to act like a ?classic cartel,? as a federal judge described them thirty-odd years ago, you might as well look the part.

An evil trial lawyer from Chicago, which makes me almost as bad as Barack Obama himself. Except, I am a Cubs fan, unlike our President, and so, as the kids say, I AM SHAME. I blog about legal issues, politics, sports, music (that long-haired rock 'n roll music all the kids are into), and, frequently, the interaction between any and all of the above. When I'm not busy undermining the Constitution or circumventing your freedoms, I run, watch too much sports on the teevee, and hang out with my long-suffering wife and three kids.

Filed Under: Antitrust Law, College Athletes, college football, Ed O'Bannan lawsuit vs NCAA, Ed O'Bannon, Law, NCAA, Sports

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