The NCAA News - News and Features

The NCAA News -- December 6, 1999

Gridiron gridlock

Landmark lawsuit caused football television to change channels

BY KAY HAWES
STAFF WRITER

By the 1980s, televised college football was a significant source of income for the NCAA. Had the television contracts the NCAA had with ABC, CBS and ESPN remained in effect for the 1984 season, they would have generated $73.6 million for the Association and its members.

But a lawsuit -- and its resolution before the Supreme Court that year -- changed that revenue stream forever, also changing the way college football fans would watch the game on television.

Since its first television plan in 1952, the Association had been concerned that live television would decrease attendance at college football games. (See "The electronic free ticket" in the "The NCAA Century Series" in the November 22, 1999, issue of The NCAA News.)

Some rules were developed in the hopes that they would encourage fans to watch their team in person rather than on the screen. One such rule was that no team could have more than one televised game per year.

Another rule provided for 12 Saturday afternoon dates for "sponsored network telecasts," which were supposed to be "widely distributed geographically with respect to their points of origin." Also, there was only one game telecast each Saturday on those 12 dates, although local stations could add a small-college game of regional interest.

In other words, there was no way fans scattered about the country could see their favorite team every week, and there certainly was no point in fans planning to spend a Saturday watching football from late morning to late at night as they can now.

The plan was successful in two key ways. Attendance at college games increased in 1954, and television rights fees paid to the Association continued to rise.

A legal challenge

But not everyone was happy with the Association's television plan. Some prominent schools wanted to control their ability to sell their games to television, and others wanted to eliminate or reduce the restrictions on the number of times their football teams could appear on television.

But as a whole, the Association continued to embrace the television plan, supporting it overwhelmingly whenever it came to a vote. The philosophy was that the Association could control television and exercise greater bargaining power through a coordinated approach.

The NCAA always had been aware that the plan could be challenged under antitrust laws, but it believed its position was defensible. Until the 1970s at least, the NCAA was advised that the Supreme Court interpreted the Sherman Act as applying only to the business world.

"Up until 1975, nonprofit organizations had not been subject to antitrust laws," said Thomas C. Hansen, current commissioner of the Pacific-10 Conference and a longtime administrator of the NCAA's television plan.

"Then in 1975, there was a decision involving the Virginia State Bar Association and the Supreme Court that for the first time made it clear that (associations) did not enjoy blanket exemptions from antitrust laws. That was one of the most fundamental changes that eventually led to the lawsuit."

In later years, the Association's legal counsel advised that, even if antitrust laws were applied to the plan, the procompetitive purposes of the plan represented a sound basis for the plan's restrictions.

In September 1981, the Board of Regents of the University of Oklahoma and the University of Georgia Athletic Association filed suit against the NCAA in district court in Oklahoma.

The College Football Association, along with some other conferences and institutions, supported Oklahoma and Georgia, both in spirit and monetarily.

"The CFA was formed primarily with TV in mind and a desire to take that away from the NCAA," Hansen said.

The plaintiffs stated that the NCAA's football television plan constituted price fixing, output restraints, boycott and monopolizing, all of which were illegal under the Sherman Act.

The NCAA argued that its procompetitive and noncommercial justifications for the plan -- protection of live gate, maintenance of competitive balance among NCAA member institutions and creation of a more attractive "product" to compete with other forms of entertainment -- combined to make the plan reasonable.

In September 1982, the district court found in favor of the plaintiffs, ruling that the plan violated antitrust laws. It enjoined the Association from enforcing the contract.

The NCAA asked the Tenth Circuit Court of Appeals to permit the Football Television Plan and subsequent contracts to be carried out that fall. The court agreed, but it affirmed the district court's decision when it ruled on the case in May 1983.

The next year and a half was full of legal wrangling as the Association pursued appeals. The Supreme Court finally accepted the case on October 17, 1983, and delivered its decision June 27, 1984.

The Supreme Court, by a 7-2 vote, determined that the 1982-85 NCAA Football Television Plan violated the Sherman Antitrust Act. The court said that because the NCAA had failed to demonstrate sufficient procompetitive justifications for the restraints, which involved fixing of the rights fees to be paid for the televising of games and limitations upon the output of televised college football, those restraints were unreasonable.

Further legal clarifications maintained the NCAA's right to impose television sanctions on schools that violated NCAA rules unrelated to the plan.

Several other lawsuits involving the television networks and the CFA made their way through the courts, but the important issues had already been decided. College football would never look quite the same on television again.

Most major cable television markets began receiving about eight games each Saturday in 1984, but it would take some time for advertisers, networks and fans to adjust to the new way of doing things.

As for the Association, the revenue provided by televised college football became a part of history.