The BCS: Controversial or illegal?
The NCAA is no stranger to the courtroom, and, at any given time, it is likely to have several high-profile lawsuits filed against it. As would be expected, the theme is almost always the same: someone wants a piece of the pie.
When the NCAA capped the salaries of assistant coaches, the coaches sued for antitrust violations and won; when the players cried foul on the association’s no-draft, no-agent rule for college football players, they sued on antitrust grounds and lost; the NCAA basketball tournament was thrust into the antitrust spotlight in 2004 and settled its differences with the NIT; and when the league changed the size of regulation lacrosse sticks, the manufacturer’s sued on antitrust grounds and lost. Today, there is a major suit against the NCAA by former players regarding licensing and copyright of images. Ed O’Bannon, who played basketball for the University of California at Los Angeles in 1995 and whose image of on-court heroics is still used, understands the league owns the copyright to his image while he played. But, 12 years after he hung up his high-tops, O’Bannon is wondering why the NCAA can still use his image when selling millions of dollars in apparel, video games, and DVDs.
But, perhaps the elephant in the room is not the lawsuits that are pending and have been settled, but the one that has been often demanded and called for by coaches, fans, and members of Congress in recent years and has never been brought. The debate surrounding college football’s Bowl Championship Series (BCS) is loud, heated, and often ends with a declaration of a blatant violation of antitrust law. But, is it really? Or is this just the talk of pundits doing a legal version of Monday morning quarterbacking?
A Brief History
Division I-A college football (now called the Football Bowl Subdivision) is not just the backbone of many college athletic programs, it is the entire skeleton. At some schools, the revenue generated from the football program not only supports football operations, but every other sport at the university and then some. In 2009, the football program brought in more than $65 million to the athletic department at The Ohio State University while it spent just over $33 million. As a result of the power football program, Ohio State boasts 36 varsity sports, which is 16 more than the average division I-A school, and all give the maximum amount of scholarships allowed by NCAA regulations. The athletic department also pumps money into the school’s general fund as well as special projects like the recent renovation of Thompson Library, the University’s main library on the Oval.
Division I-A college football is the only NCAA-sponsored sport that does not have an official playoff leading to a national championship. Instead, the 120 teams play in 11 different leagues and the NCAA season is capstoned by a league championship. The leagues themselves devise their own schedules and rules for declaring a champion. More than 100 years ago, the Rose Bowl was created as an effort to increase post-holiday travel in what was traditionally a down time. With the advent of radio and television, it, and other bowls, turned what is normally not a prime viewing day – a holiday – into a marathon of parades and games that have become a tradition for many families across America. In 1947, the Tournament of Roses Association made an exclusive arrangement with the Big 10 and Pac 10 to host the leagues’ champions.
As the bowl system developed, leagues began establishing contractual relationships with various bowls. These contracts brought stability to the bowl games, which were then guaranteed two league champions and the fans that followed them each year, and to the teams and fans, who knew what the prize they were playing for each game was and where they would be headed if they won. But, pre-determined bowl slots were not ideal for establishing a clear national champion at the end of the season because often the teams in contention never played each other during the regular season or in a bowl game. Before the BCS, the old bowl system paired the No. 1 and No. 2 teams against each other only nine times in 45 years. During the 2002 season, when Ohio State won the national championship, under the old bowl rules it would have played in the Rose Bowl against Pac-10 champ, Washington State (10-2), not in the Fiesta Bowl against the University of Miami.
“If we would have played Washington State instead of Miami and won, Miami clearly would have been named national champions,” said Frank Bazler ’53, an avid football fan who travelled to the 2002 Fiesta Bowl and many other Buckeye bowl games. “They had all of the media before the game, and we were downplayed by the press until we won.”
The BCS is the result of more than 20 years of negotiations aimed at creating one scenario: the No. 1 team playing No. 2. It is itself not an entity, but a television contract that exists between the five major bowl games and Fox Sports (and, in the future, ESPN). The Football Bowl Association manages the remaining 29 bowl games with the NCAA having little involvement.
The concept seems simple: Set up a system to allow the No. 1 and No. 2 team to play each other and create marquee match-ups in the other four bowl games while honoring the major conferences’ historic traditions of sending their conference champions to major bowls. The controversy is two-fold: 1) Who is No. 1 and No. 2? And 2) who goes to the other BCS bowl games, which are very lucrative, especially in a year when the champion from an automatic qualifying conference is not highly ranked?
The No. 1 and No. 2 teams are selected by a complex formula, the heart of which relies on two polls. The No. 3 team, which does not get to play for the national championship, often has a legitimate subjective argument that it should be ranked higher than the No. 1 and No. 2 teams and these arguments can cast doubt on the validity of the national championship. Because teams from different leagues rarely play each other, the use of polls has been an integral part of the selection of a national champion for decades. The Associated Press poll was created in 1936 and the United Press International/Football Coaches Association (now the USA Today poll) was created in 1950. It was not until the early 1970s that the polls even considered bowl results when naming a national champion.
“I don’t think there is a perfect system out there,” said Michael Briley ’69, an antitrust law specialist and partner at Shumaker Loop & Kendrick LLC in Toledo. “When I went to the Fiesta Bowl in 2007 and Florida beat us, it was crystal clear to me who the national champions were that year.”
There has always been a problem comparing teams from leagues, especially when, unlike professional sports, those leagues are not viewed as consistently balanced and equal. In many years, it would be hard for many fans to swallow leaving the Big 10 runner-up or SEC runner-up out of a playoff system in favor of choosing the conference champion of the MAC or Mountain West.
“There is much more competition in the bigger leagues,” Bazler said. “Other schools may have big games scheduled here and there, but being a national champion means beating competitive teams each week and also winning the big game at the end.”
The BCS is more than just the national championship game, however. The BCS itself involves five bowl games – the Fiesta, Orange, Rose, and Sugar bowls as well as the BCS National Championship Game, which is played at the site of one of the four other bowls – and 10 of the 58 bowl spots available to Division I-A teams. Six of those eights spots are reserved for champions of the ACC, Big East, Big Ten, Big 12, Pacific-10, and Southeastern Conferences (referred to as the “automatic qualifying conferences”). The remaining two spots are at-large bids and can go to a team from one of the other five conferences or to a second team from one of the automatic conferences. The guaranteed spots are controversial because they have, at times, put a lower-ranked team in a BCS bowl and left a higher-ranked team out. To avoid this problem, it has been suggested that instead the BCS should just take the top 10 ranked teams, regardless of which conferences they are from. While there a host of issues related to this idea, the main point expressed by Big 10 Commissioner James Delaney is that it is not what the Big 10 or other conferences agreed upon. In Congressional testimony, Delaney has firmly advocated that the Big 10 would have never agreed to give up the automatic slot in the Rose Bowl for its conference champion and create the BCS unless its conference champion was guaranteed a spot in at least one of the other major bowls.
“One cannot reasonably expect that those conferences will substantially alter or forego those close and valuable relationships to create a national championship game unless the arrangement that is created gives their champions a bowl slot at least the equivalent of what they could have obtained on their own,” Delaney said in testimony before the U.S. House Judiciary Committee.
Congress & The Case For Antitrust
In the past six years, Congress has held three hearings, including two this year, on the subject of the Bowl Championship Series and whether its methods for selecting teams and dividing revenues violate antitrust laws. The focus of the hearings is clearly to put pressure on college football to move toward a playoff system. The hearings were spearheaded by Joe Barton (R-TX), whose Texan Longhorns were questionably ranked No. 3 in 2008 and missed out on playing for the national championship; Orrin Hatch (R-UT), whose Utah Utes were the only undefeated team in 2008, but were not ranked No. 1 or No. 2 and, therefore, did not play for the national championship; and Neil Abercrombie (D-HI), whose Hawaii Warriors have often expressed frustration with the BCS system.
House Resolution 1120, introduced on April 17, 2008 and again on Jan. 15, 2009 by Rep. Abercrombie, rejects the BCS system as an illegal restraint of trade that violates the Sherman Antitrust Act; demands the U.S. Department of Justice Antitrust Division investigate and bring appropriate action to have the BCS system declared illegal and require a playoff to determine a national champion; and supports the establishment of an NCAA Division I Football Bowl Subdivision Championship playoff system in the interest of fairness and to bring parity to all NCAA teams.
“Congress only has the power to change the law, not to enforce it,” Briley said. “The DOJ can bring a criminal antitrust action and an individual can bring a private civil action, but Congress cannot direct the DOJ to do anything. I have never seen a case in history where Congress demanded that the DOJ take action. This is purely political grandstanding.”
Many of those calling for an antitrust suit look to a previous case brought against the NCAA by the University of Oklahoma and the University of Georgia. Prior to 1984, the NCAA regulated all television rights for college football games and had strict rules regarding when and how many times a team could be shown on television. In the lawsuit, Oklahoma and Georgia demonstrated that if teams and leagues were allowed to negotiate their own television contracts, many more college football games would be telecast and the price per game for the televising network would go down. The U.S. Supreme Court found this fact key to finding the NCAA regulations were in violation of antitrust laws and the NCAA had no valid, compelling reason for the rules besides to restrain trade.
In contrast, proponents of the BCS system argue it is pro-competitive, not anti-competitive.
“Antitrust law is not about being fair,” Briley said. “It is about preventing anti-competitive behavior. It would be a real uphill challenge for a lawyer to mount a case because first, it would involve a rule of reason analysis and secondly, unlike the 1984 Supreme Court case, the BCS system does not have a price fixing component to it. It does, however, have many of the ‘countervailing competitive virtues’ recognized by the Court in 1984 as justification for the system.”
From 1978 to 1998, when the BCS was formed, 159 of the 160 slots at the four major bowl games went to teams from the six conferences with automatic bids. In the last five years, however, four teams from non-automatic qualifying conferences have earned BCS bids. In recent years, the BCS has changed its rules so that a team from one of the five non-automatic conferences is guaranteed a spot in a BCS bowl if it is a conference champion and ranked in the top 12, or is a conference champion, ranked above the conference champion of an automatic-bid conference, and ranked in the top 16.
While the majority of slots in BCS games go to champions from the six premier conferences, the money does not just flow to those conferences. The BCS pays the remaining conferences money each year for making their champions available to play in the BCS even if they never play in a BCS bowl. In addition, eight division I-AA leagues also get a piece of the pie regardless if any of their teams ever step foot on the turf of a BCS game. According to the BCS, in the first 10 years of the BCS more than $90 million flowed to the non-automatic division I-A conferences and eight division I-AA conferences. Under the old system, these leagues would traditionally have seen no revenue from the bowl system. But, leagues arguing for changing the BCS point out that this amount is minuscule compared to what the six automatic-qualifying conferences collect. In a year when all the BCS spots are taken by teams from the six premier leagues, 10 percent of the revenue flows to the other leagues that did not play in a BCS bowl. In a year when a school from a non-qualifying conferences does play in the BCS, 18 percent of revenues flow to the other leagues.
Unlike the previous case, the BCS also can point to other, non-competition reasons for sticking with the current system, including the impact extending a playoff system into the winter semester and adding more games would have on student-athletes.
“As a football fan, I would love to have more chances to see the Buckeyes win,” Ohio State President E. Gordon Gee said. “But as an educator, I cannot sacrifice our student-athletes to our hunger for even more football. The system is not perfect, and everyone has a scheme to fix it. But the fundamentals are off. It is about students, not football. It is about books and backpacks, not helmets and draft-picks.”
In 2008, the Football Bowl Association put on 34 bowl games in 29 communities and more than 6,000 student athletes, 12,000 band members, and over 75,000 performers participated. The 68 teams that participated in Bowl Games represented over half of major football programs. Perhaps most notably, bowl games generate in excess of $1 billion each in annual economic impact – that is airline flights, hotel rooms, restaurant, and bar tabs in host cities. According to FBA testimony before Congress, the FBA is adamantly opposed to a post-season playoff system because those events would be a single-day game, with little prior notice as to which team was playing where, as opposed to the current bowl system which is a multi-day event for athletes and fans around the holiday season.
“They are absolutely right that it is an experience, not just a game,” Bazler said. “We have been to the Rose Bowl three times, starting in 1955 the first year we were married. If there were a playoff system instead, I don’t know how we would buy tickets and make travel arrangements when we wouldn’t know if the Buckeyes were playing in the game until a week before.”
Finally, there is some debate about who exactly to sue in this case. The BCS itself is not a corporation or other entity formalized by filing in any jurisdiction. It is not party to the television contracts and the contracts actually say the BCS is not a joint venture. Documents prepared by legal counsel on behalf of the Mountain West and presented at U.S. Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights state:
“Clearly antitrust lawyers have sought to create a structure in which the monopolizing entity somehow lacks legal capacity in an effort to avoid Sherman Act liability. It seems appropriate to pierce that fiction and establish the principle that a dominant cartel would no likely avoid liability by obfuscating its legal status.”
But, perhaps all the debate regarding whether the BCS is anticompetitive or procompetitive, serves other social purposes, or is a mythical organization created only in theory as a result of a myriad of contracts and understandings, is all in vain for those desiring a college football playoff.
“Even if an antitrust action were successful, it would just declare that the current BCS system is unlawful. The courts would not likely direct that college football set up a playoff as a remedy,” Briley said.
And, the Big 10 and other conferences, as well as the bowls themselves, have made it clear that if the BCS agreement is dismantled or falls apart, they will revert to the old bowl system.
Other Congressional Remedies
In January 2009, House Bill 390 was introduced. Its aim is “to prohibit, as unfair and deceptive act or practice, the promotion, marketing, and advertising of any post-season NCAA Division I football game as a national championship game unless such game is culmination of a fair and equitable playoff system.”
In other words, the BCS may exist, but it just cannot call itself the national championship.
“The FTC’s biggest focus is principally on anti-competitive mergers and acquisitions, unfair trade practices, and deceptive advertising,” Briley said. “A challenge to the BCS is within the FTC’s jurisdiction, but I doubt that it would be within its interest.” In 2009, The Championship Fairness Act of 2009 was introduced in the House. It prohibits “the receipt of Federal funds by any institution of higher education with a football team that participates in the NCAA Division I Football Bowl Subdivision, unless the national championship game of such Subdivision is the culmination of a playoff system.”
“Congress may have the power to cut off funding to public universities, but this is the wrong and a very heavy-handed approach to superimpose their judgment on all of the university presidents about what is best for their student athletes,” Briley said.