National Collegiate Athletic Association v. Board of Regents of the University of Oklahoma

PETITIONER: NCAA
RESPONDENT: Board of Regents of the University of Oklahoma, et al.
LOCATION: U.S. District Court for the Western District of Oklahoma

DOCKET NO.: 83-271
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Tenth Circuit

CITATION: 468 US 85 (1984)
ARGUED: Mar 20, 1984
DECIDED: Jun 27, 1984
GRANTED: Oct 17, 1983

ADVOCATES:
Andy Coats - on behalf of Respondents
Frank H. Easterbrook - on behalf of Petitioners
Rex E. Lee - on behalf of the United States as amicus curiae

Facts of the case

In 1981, the National Collegiate Athletic Association (NCAA) entered into negotiations with ABC and CBS regarding televising the NCAA football games. Each of those companies had the rights to air 14 live games per season as well as to negotiate individually with the competing schools, and they were required to pay a “minimum aggregate compensation” to the participating schools. The goal of the plan was to televise games in such a way as to not drastically decrease live attendance at the games. The NCAA did not permit any of the schools to negotiate outside of this plan.

The University of Oklahoma and the University of Georgia are both members of the College Football Association (CFA), a group within the NCAA that was formed to represent and promote the interests of the major football schools. These schools, along with the other schools in the CFA, negotiated a separate contract with NBC that would allow for more televised games and greater revenues for the schools in question. The NCAA then announced that it would take disciplinary action against any school that complied with the CFA plan as opposed to the NCAA one. The respondent schools took the issue to the District Court for the Western District of Oklahoma, which found that the NCAA contract violated the Sherman Act. The Court of Appeals for Oklahoma affirmed the judgment of the lower court.

Question

Does the NCAA plan for televised football games impose a restraint on the free market and thus violate the Sherman Act?

Media for National Collegiate Athletic Association v. Board of Regents of the University of Oklahoma

Audio Transcription for Oral Argument - March 20, 1984 in National Collegiate Athletic Association v. Board of Regents of the University of Oklahoma

Warren E. Burger:

We will hear arguments first this morning in National Collegiate Athletic Association against the Board of Regents of the University of Oklahoma.

Mr. Easterbrook, you may proceed whenever you're ready.

Frank H. Easterbrook:

Mr. Chief Justice, and may it please the Court:

The questions in this case concern the application of the Sherman Act to the NCAA's arrangements for the telecasting of college football.

Two agreements are at issue.

One is the TV plan adopted by the NCAA's members and the other is a series of contracts signed between the NCAA and the ABC, CBS and Turner television networks.

These agreements collectively govern the TV appearances of college football teams.

They give ABC and CBS the right to broadcast football in 14 time slots each fall, or roughly one slot per network per Saturday.

They require each network to broadcast a total of 35 different games each fall, and they require each network to broadcast the games of at least 82 different teams, different colleges, over a period of any two years.

Colleges may telecast games outside the network contracts only in compliance with a series of rules called the exceptions rules.

Although the exceptions rules have permitted the telecast of more than 100 games a year in recent years, they reduce the number of stations that can carry each game and they restrict the ability of colleges to broadcast their games when other nearby schools have not sold out their stadiums.

The decisions of the lower courts rest on two principal bases.

First they held these agreements are unlawful per se because they are horizontal arrangements among competitors, the colleges, to reduce the output, that is the number of different games shown on TV.

Second, the courts held they're unlawful under the rule of reason.

The Tenth Circuit thought that the plan violated the rule of reason because only large networks would be able to bid for these contracts and that created objectionable foreclosure of broadcasting by competing TV stations.

As the case comes here there are seven issues before the Court.

Our petition presents four questions: questions concerning the scope of the per se rule, the allocation of the burden of persuasion, the existence of market power, and the application of the rule of reason if the Court funds market power.

Respondents have invoked two different grounds in support of their judgment.

They have argued that the arrangements are unlawful per se as boycotts and as monopolization.

And the Solicitor General has added still a seventh issue to this case.

The Solicitor General argues that the Court should replace the traditional dichotomy between per se analysis and rule of reason analysis with a new three-tier analysis.

Seven issues is obviously too many to handle in this oral argument, and I therefore want to address the third question presented in our petition, market power, and to discuss the other questions only as time permits.

I want to focus on market power because it's the centerpiece of this case.

We have argued that the rule of reason rather than the per se rule applies because the agreements are useful in helping the NCAA and its members compete against other forms of entertainment.

What you think of that argument will depend on what you think of our market power argument.

If you agree with us about the nature of competition in this market, it follows not only that the NCAA has no market power, but that the arrangements are pro-competitive tools that help to compete against other forms of entertainment.

William H. Rehnquist:

Mr. Easterbrook, is the NCAA a for-profit association or a non-profit?

Frank H. Easterbrook:

It is a non-profit association, Your Honor.

William H. Rehnquist:

And are the universities that are members of it non-profit?

Frank H. Easterbrook:

They are.