NCAA v. Board of Regents of Univ. of Oklahoma
Encyclopedia
NCAA v. Board of Regents of the University of Oklahoma, 468 U.S. 85
(1984), was a case in which the Supreme Court of the United States
held that the National Collegiate Athletic Association
(NCAA) television plan violated the Sherman and Clayton Antitrust Acts. The case dealt with television rights
to college football games, which until the lawsuit were controlled by the NCAA and limited the appearance of university teams in each season. The Board of Regents
of the University of Oklahoma
and the University of Georgia
Athletic Association sued to force the NCAA to stop the practice. The Supreme Court held that the NCAA's actions were a restraint of trade and ruled for the universities.
was enacted in 1890 to oppose the use of combinations, monopolies or cartels that harmed free and open trade. It prohibited the restraint of trade
. The Clayton Antitrust Act
was enacted in 1914 to address shortcomings discovered in the Sherman Act. It specified the prohibited conduct, an enforcement scheme, and remedial measures. The Clayton Act allows for private parties to bring suit for treble damages and for injunctive relief. Until the late 1950s, sporting events were considered to be exempt from both acts, until the Supreme Court decision in International Boxing Club v. United States,
founded in 1905 to regulate collegiate athletics. In the 1980s it consisted of approximately 900 college and university members. In 1938, the first college football game was commercially televised by the University of Pennsylvania
. From 1940 to 1950, all of Pennsylvania's home games were televised. Beginning in 1952 and continuing through 1957, the NCAA commissioned a study by National Opinion Research Center
(NORC) to determine the effect of televising college football games on a number of areas, including live attendance. The studies indicated that live television coverage of college football decreased attendance for teams that were not being televised. Based on these studies, the NCAA began to institute controls beginning in 1953 through its Football Television Committee (Committee). The Committee initially determined that there would be only one televised game every Saturday and that no team would appear in a televised game more than once per season. In addition, it was determined that the revenue would be shared by the teams playing the televised game and the NCAA.
The initial restriction was supported by all of the NCAA member schools with the exception of Pennsylvania, who stated that they would continue to televise their home games. The NCAA declared that Pennsylvania was a member in bad standing, and the four schools scheduled to play them at home refused to do so. Pennsylvania then agreed to abide by the NCAA rules on televising games. From 1952 to 1977, the NCAA submitted an annual plan to all member schools, who voted on it by mail. After 1977, the member schools voted on "Principles of Negotiation" instead of the actual plan. Only one network would hold a contract with the NCAA to broadcast games at a time. Although all major television networks had held the contract at various times, from 1965 to 1981, the American Broadcasting Company
(ABC) had held the contract.
seeking an injunction
to prevent the NCAA from taking action against CFA members.
Lee Roy West
recused himself from the case, being an alumnus of the University of Oklahoma for both his undergraduate and law degrees. Judge Juan Guerrero Burciaga
of New Mexico
was then appointed to hear the case. During the trial, the NCAA claimed that it was a voluntary organization and if the plaintiffs or other schools did not wish to abide by the NCAA rules, they were free to terminate their membership. It was shown that the amount of money paid by ABC to teams appearing on television was established by Thomas C. Hansen, the NCAA Television Program Director. Universities were not allowed to negotiate their own terms. Burciaga pointed out an example of the control and price fixing by noting that in 1981, Oklahoma and the University of Southern California
(both then ranked in the top 5 of the AP Poll
and the Coaches' Poll) appeared on 200 stations in a regional broadcast. On the same weekend, ABC televised a game between the Citadel and Appalachian State
on four stations. All four teams received the same amount of money for appearing.
Burciaga found that not only did the NCAA engage in price fixing
, they acted to limit production by restricting the number of games that could be broadcast. The NCAA further threatened universities with a group boycott
if they did not agree to the terms dictated by the NCAA. He noted that ABC had encouraged the NCAA to seek an exemption from antitrust laws from Congress
, but that the NCAA did not believe that they could obtain the exemption.
Burciaga then examined the conduct of the NCAA under both the rule and the rule of reason
. Finding that the NCAA violated antitrust laws under both evaluations, Burciaga issued both a declaratory judgment
and a permanent injunction prohibiting the NCAA from interfering with the individual universities television contracts and declaring the NCAA-ABC contract null and void. The NCAA then appealed the decision to the Tenth Circuit Court of Appeals
.
and Judges James K. Logan
and Stephanie K. Seymour
. In the appeal, the NCAA argued that Oklahoma and Georgia did not have standing to bring the suit, claiming that the schools suffered no actual injury. Logan, who wrote the opinion, flatly rejected that argument.
The court then turned to whether the case should be evaluated under the rule or the rule of reason. Deciding on the rule, the court rejected the NCAA arguments that the television plan promoted live attendance, that it promoted balanced athletic competition, and that televised football competed with other, non-sports programs. The court noted that the NCAA plan restricted output and affirmed the trial court's ruling, while also holding that the district court erred in ruling television plan and contract constituted a group boycott.
Chief Judge Barrett dissented, believing that the restraints were reasonable under the rule of reason and that the NCAA has an overwhelming interest in preserving the amateur nature of intercollegiate athletics. He would have reversed the district court, quashed the injunction, and held that there was no antitrust violation.
The NCAA again appealed, and the Supreme Court granted to hear the case.
argued the case for the NCAA and Andy Coats represented Oklahoma and Georgia. The United States Solicitor General, Rex E. Lee
, filed an brief in support of Oklahoma and Georgia, and argued the cause to the court. Other briefs were filed by the National Federation of State High School Associations
(supporting the NCAA) and the Association of Independent Television Stations (supporting Oklahoma and Georgia).
Justice
John Paul Stevens
delivered the opinion of the court. Stevens stated that "There can be no doubt that the challenged practices of the NCAA constitute a 'restraint of trade'" but noted not all restraints of trade were unreasonable, and that only an unreasonable restraint was prohibited by the Sherman Antitrust Act. Stevens noted that a league governing body was necessary for sporting events to take place and determined that the rule of reason, not rules applied to the case. Stevens determined that since the NCAA restrained price and output, it created a system that was unrelated to a free and competitive market. Since the NCAA television plan constituted a restraint of trade on its face, it placed the burden on the NCAA of establishing an affirmative defense
that would justify the deviation from a free market.
Stevens then went through the justifications that were offered by the NCAA. First, although the NCAA claimed that the television plan was a joint venture
, he noted that unlike Broadcast Music, Inc. v. Columbia Broadcast System, Inc., , the NCAA was not acting as a selling agent and that the sales occurred in a noncompetitive market. Stevens evaulated the NCAA's claim that the television plan enhanced the competitiveness of college football. Since the district court found no procompetitive efficiencies from the arrangement, Stevens rejected this justification. He also said that there was no need to penetrate the market against "nonexistant" competitors. Stevens likewise rejected the defense that the television plan was designed to protect live attendance, stating " The NCAA's argument that its television plan is necessary to protect live attendance is not based on a desire to maintain the integrity of college football as a distinct and attractive product, but rather on a fear that the product will not prove sufficiently attractive to draw live attendance when faced with competition from televised games."
The NCAA position that an interest in maintaining a competitive balance justified the television plan was also rejected. While agreeing with the desire to maintain such a balance, Stevens noted that there was no evidence that the plan succeeded in that effort. The decision of the circuit court was affirmed.
Justice Byron White
, joined by Justice William Rehnquist
dissented from the majority opinion. White stated that while intercollegiate athletics bore a superficial resemblance to professional sports, it was clear that other, non-commercial goals played the main role. Its actions are based on the unique nature of college athletics, and White felt that the restrictions were reasonable. He would have overturned the circuit court.
Case citation
Case citation is the system used in many countries to identify the decisions in past court cases, either in special series of books called reporters or law reports, or in a 'neutral' form which will identify a decision wherever it was reported...
(1984), was a case in which the Supreme Court of the United States
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
held that the National Collegiate Athletic Association
National Collegiate Athletic Association
The National Collegiate Athletic Association is a semi-voluntary association of 1,281 institutions, conferences, organizations and individuals that organizes the athletic programs of many colleges and universities in the United States...
(NCAA) television plan violated the Sherman and Clayton Antitrust Acts. The case dealt with television rights
Broadcasting
Broadcasting is the distribution of audio and video content to a dispersed audience via any audio visual medium. Receiving parties may include the general public or a relatively large subset of thereof...
to college football games, which until the lawsuit were controlled by the NCAA and limited the appearance of university teams in each season. The Board of Regents
Board of Regents
In the United States, a board often governs public institutions of higher education, which include both state universities and community colleges. In each US state, such boards may govern either the state university system, individual colleges and universities, or both. In general they operate as...
of the University of Oklahoma
University of Oklahoma
The University of Oklahoma is a coeducational public research university located in Norman, Oklahoma. Founded in 1890, it existed in Oklahoma Territory near Indian Territory for 17 years before the two became the state of Oklahoma. the university had 29,931 students enrolled, most located at its...
and the University of Georgia
University of Georgia
The University of Georgia is a public research university located in Athens, Georgia, United States. Founded in 1785, it is the oldest and largest of the state's institutions of higher learning and is one of multiple schools to claim the title of the oldest public university in the United States...
Athletic Association sued to force the NCAA to stop the practice. The Supreme Court held that the NCAA's actions were a restraint of trade and ruled for the universities.
Antitrust law
The Sherman Antitrust ActSherman Antitrust Act
The Sherman Antitrust Act requires the United States federal government to investigate and pursue trusts, companies, and organizations suspected of violating the Act. It was the first Federal statute to limit cartels and monopolies, and today still forms the basis for most antitrust litigation by...
was enacted in 1890 to oppose the use of combinations, monopolies or cartels that harmed free and open trade. It prohibited the restraint of trade
Restraint of trade
Restraint of trade is a common law doctrine relating to the enforceability of contractual restrictions on freedom to conduct business. In an old leading case of Mitchell v Reynolds Lord Smith LC said,...
. The Clayton Antitrust Act
Clayton Antitrust Act
The Clayton Antitrust Act of 1914 , was enacted in the United States to add further substance to the U.S. antitrust law regime by seeking to prevent anticompetitive practices in their incipiency. That regime started with the Sherman Antitrust Act of 1890, the first Federal law outlawing practices...
was enacted in 1914 to address shortcomings discovered in the Sherman Act. It specified the prohibited conduct, an enforcement scheme, and remedial measures. The Clayton Act allows for private parties to bring suit for treble damages and for injunctive relief. Until the late 1950s, sporting events were considered to be exempt from both acts, until the Supreme Court decision in International Boxing Club v. United States,
Control of televised games
The NCAA is private non-profit organizationNon-profit organization
Nonprofit organization is neither a legal nor technical definition but generally refers to an organization that uses surplus revenues to achieve its goals, rather than distributing them as profit or dividends...
founded in 1905 to regulate collegiate athletics. In the 1980s it consisted of approximately 900 college and university members. In 1938, the first college football game was commercially televised by the University of Pennsylvania
University of Pennsylvania
The University of Pennsylvania is a private, Ivy League university located in Philadelphia, Pennsylvania, United States. Penn is the fourth-oldest institution of higher education in the United States,Penn is the fourth-oldest using the founding dates claimed by each institution...
. From 1940 to 1950, all of Pennsylvania's home games were televised. Beginning in 1952 and continuing through 1957, the NCAA commissioned a study by National Opinion Research Center
National Opinion Research Center
NORC at the University of Chicago, established in 1941 as the National Opinion Research Center, is one of the largest and most highly respected social research organizations in the United States. Its corporate headquarters are located on the University of Chicago campus...
(NORC) to determine the effect of televising college football games on a number of areas, including live attendance. The studies indicated that live television coverage of college football decreased attendance for teams that were not being televised. Based on these studies, the NCAA began to institute controls beginning in 1953 through its Football Television Committee (Committee). The Committee initially determined that there would be only one televised game every Saturday and that no team would appear in a televised game more than once per season. In addition, it was determined that the revenue would be shared by the teams playing the televised game and the NCAA.
The initial restriction was supported by all of the NCAA member schools with the exception of Pennsylvania, who stated that they would continue to televise their home games. The NCAA declared that Pennsylvania was a member in bad standing, and the four schools scheduled to play them at home refused to do so. Pennsylvania then agreed to abide by the NCAA rules on televising games. From 1952 to 1977, the NCAA submitted an annual plan to all member schools, who voted on it by mail. After 1977, the member schools voted on "Principles of Negotiation" instead of the actual plan. Only one network would hold a contract with the NCAA to broadcast games at a time. Although all major television networks had held the contract at various times, from 1965 to 1981, the American Broadcasting Company
American Broadcasting Company
The American Broadcasting Company is an American commercial broadcasting television network. Created in 1943 from the former NBC Blue radio network, ABC is owned by The Walt Disney Company and is part of Disney-ABC Television Group. Its first broadcast on television was in 1948...
(ABC) had held the contract.
College Football Association
Partially as a result of dissatisfaction with the NCAA's control of the television market, the College Football Association (CFA) was formed, consisting of major college football programs. In 1979, the CFA began to negotiate a television contract for its members with the National Broadcasting Company (NBC), despite the then ongoing NCAA negotiations with both ABC and the Columbia Broadcasting System (CBS). On learning of the CFA's negotiations, the NCAA issued an "Official Interpretation" stating that "The Association shall control all forms of televising of the intercollegiate football games of member institutions during the traditional football season..." The CFA continued to work on a contract with NBC and came to an agreement on August 8, 1981. The NCAA swiftly stated that universities that participated in the CFA contract would face NCAA sanctions, not just in football, but in all other sports as well. Two member schools of the CFA, the University of Oklahoma (Oklahoma) and the University of Georgia (Georgia) filed suit in the United States District Court for the Western District of OklahomaUnited States District Court for the Western District of Oklahoma
The United States District Court for the Western District of Oklahoma is a Federal district court....
seeking an injunction
Injunction
An injunction is an equitable remedy in the form of a court order that requires a party to do or refrain from doing certain acts. A party that fails to comply with an injunction faces criminal or civil penalties and may have to pay damages or accept sanctions...
to prevent the NCAA from taking action against CFA members.
District court
On being filed on September 8, 1981, District JudgeUnited States federal judge
In the United States, the title of federal judge usually means a judge appointed by the President of the United States and confirmed by the United States Senate in accordance with Article II of the United States Constitution....
Lee Roy West
Lee Roy West
Lee Roy West is a United States federal judge.Born in Clayton, Oklahoma, West received a B.A. from the University of Oklahoma in 1952, a J.D. from the University of Oklahoma College of Law in 1956, and an LL.M. from Harvard Law School in 1963. U.S. Marine Corps Lieutenant, 1952-1956...
recused himself from the case, being an alumnus of the University of Oklahoma for both his undergraduate and law degrees. Judge Juan Guerrero Burciaga
Juan Guerrero Burciaga
Juan Guerrero Burciaga was a United States federal judge.Born in Roswell, New Mexico, Burciaga received a B.S. from the U.S. Military Academy in 1952 and was a U.S. Air Force Pilot from 1952 to 1959. He received a J.D. from the University of New Mexico School of Law in 1963. He was a law clerk,...
of New Mexico
New Mexico
New Mexico is a state located in the southwest and western regions of the United States. New Mexico is also usually considered one of the Mountain States. With a population density of 16 per square mile, New Mexico is the sixth-most sparsely inhabited U.S...
was then appointed to hear the case. During the trial, the NCAA claimed that it was a voluntary organization and if the plaintiffs or other schools did not wish to abide by the NCAA rules, they were free to terminate their membership. It was shown that the amount of money paid by ABC to teams appearing on television was established by Thomas C. Hansen, the NCAA Television Program Director. Universities were not allowed to negotiate their own terms. Burciaga pointed out an example of the control and price fixing by noting that in 1981, Oklahoma and the University of Southern California
University of Southern California
The University of Southern California is a private, not-for-profit, nonsectarian, research university located in Los Angeles, California, United States. USC was founded in 1880, making it California's oldest private research university...
(both then ranked in the top 5 of the AP Poll
AP Poll
The Associated Press College Poll refers to weekly rankings of the top 25 NCAA teams in one of three Division I college sports: football, men's basketball and women's basketball. The rankings are compiled by polling sportswriters across the nation...
and the Coaches' Poll) appeared on 200 stations in a regional broadcast. On the same weekend, ABC televised a game between the Citadel and Appalachian State
Appalachian State University
Appalachian State University is a comprehensive , public, coeducational university located in Boone, North Carolina, United States. Appalachian State, also referred to as Appalachian, App State, or simply App, is the sixth largest institution in the University of North Carolina system...
on four stations. All four teams received the same amount of money for appearing.
Burciaga found that not only did the NCAA engage in price fixing
Price fixing
Price fixing is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand...
, they acted to limit production by restricting the number of games that could be broadcast. The NCAA further threatened universities with a group boycott
Group boycott
In competition law, a group boycott is a type of secondary boycott in which two or more competitors in a relevant market refuse to conduct business with a firm unless the firm agrees to cease doing business with an actual or potential competitor of the firms conducting the boycott...
if they did not agree to the terms dictated by the NCAA. He noted that ABC had encouraged the NCAA to seek an exemption from antitrust laws from Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
, but that the NCAA did not believe that they could obtain the exemption.
Burciaga then examined the conduct of the NCAA under both the rule and the rule of reason
Rule of reason
The Rule of Reason is a doctrine developed by the United States Supreme Court in its interpretation of the Sherman Antitrust Act. The rule, stated and applied in the case of Standard Oil Co. of New Jersey v. United States, 221 U.S...
. Finding that the NCAA violated antitrust laws under both evaluations, Burciaga issued both a declaratory judgment
Declaratory judgment
A declaratory judgment is a judgment of a court in a civil case which declares the rights, duties, or obligations of one or more parties in a dispute. A declaratory judgment is legally binding, but it does not order any action by a party. In this way, the declaratory judgment is like an action to...
and a permanent injunction prohibiting the NCAA from interfering with the individual universities television contracts and declaring the NCAA-ABC contract null and void. The NCAA then appealed the decision to the Tenth Circuit Court of Appeals
United States Court of Appeals for the Tenth Circuit
The United States Court of Appeals for the Tenth Circuit is a federal court with appellate jurisdiction over the district courts in the following districts:* District of Colorado* District of Kansas...
.
Circuit Court of Appeals
The Tenth Circuit heard the case before Chief Judge James E. BarrettJames Emmett Barrett
James Emmett Barrett was a United States federal judge.Born in Lusk, Wyoming, Barrett was in the United States Army from during World War II, from 1942 to 1945, and received an LL.B. from the University of Wyoming College of Law in 1949...
and Judges James K. Logan
James Kenneth Logan
James Kenneth Logan is a former United States federal judge.Born in Quenemo, Kansas, Logan was a Corporal in the United States Army from 1947 to 1948. He received an A.B. from the University of Kansas in 1952 and an LL.B. from Harvard Law School in 1955. He was a law clerk, Hon. Walter Huxman,...
and Stephanie K. Seymour
Stephanie Kulp Seymour
Stephanie Kulp Seymour is a Judge on the United States Court of Appeals for the Tenth Circuit.-Early life and education:...
. In the appeal, the NCAA argued that Oklahoma and Georgia did not have standing to bring the suit, claiming that the schools suffered no actual injury. Logan, who wrote the opinion, flatly rejected that argument.
The court then turned to whether the case should be evaluated under the rule or the rule of reason. Deciding on the rule, the court rejected the NCAA arguments that the television plan promoted live attendance, that it promoted balanced athletic competition, and that televised football competed with other, non-sports programs. The court noted that the NCAA plan restricted output and affirmed the trial court's ruling, while also holding that the district court erred in ruling television plan and contract constituted a group boycott.
Chief Judge Barrett dissented, believing that the restraints were reasonable under the rule of reason and that the NCAA has an overwhelming interest in preserving the amateur nature of intercollegiate athletics. He would have reversed the district court, quashed the injunction, and held that there was no antitrust violation.
The NCAA again appealed, and the Supreme Court granted to hear the case.
Arguments
Frank H. EasterbrookFrank H. Easterbrook
Frank Hoover Easterbrook is the Chief Judge of the United States Court of Appeals for the Seventh Circuit. He has been Chief Judge since November 2006, and has been a judge on the court since 1985...
argued the case for the NCAA and Andy Coats represented Oklahoma and Georgia. The United States Solicitor General, Rex E. Lee
Rex E. Lee
Rex Edwin Lee from St. Johns, Arizona was a Constitutional lawyer, a law clerk for former U.S. Supreme Court Justice Byron White, and the United States Solicitor General under the Reagan administration. He argued 59 cases before the U.S. Supreme Court...
, filed an brief in support of Oklahoma and Georgia, and argued the cause to the court. Other briefs were filed by the National Federation of State High School Associations
National Federation of State High School Associations
The National Federation of State High School Associations is the body that writes the rules of competition for most high school sports and activities in the United States. Most high schools, whether public or private, belong to their state's high school association; in turn, each state association...
(supporting the NCAA) and the Association of Independent Television Stations (supporting Oklahoma and Georgia).
Majority opinion
Associate Justice of the Supreme Court of the United States
Associate Justices of the Supreme Court of the United States are the members of the Supreme Court of the United States other than the Chief Justice of the United States...
John Paul Stevens
John Paul Stevens
John Paul Stevens served as an Associate Justice of the Supreme Court of the United States from December 19, 1975 until his retirement on June 29, 2010. At the time of his retirement, he was the oldest member of the Court and the third-longest serving justice in the Court's history...
delivered the opinion of the court. Stevens stated that "There can be no doubt that the challenged practices of the NCAA constitute a 'restraint of trade'" but noted not all restraints of trade were unreasonable, and that only an unreasonable restraint was prohibited by the Sherman Antitrust Act. Stevens noted that a league governing body was necessary for sporting events to take place and determined that the rule of reason, not rules applied to the case. Stevens determined that since the NCAA restrained price and output, it created a system that was unrelated to a free and competitive market. Since the NCAA television plan constituted a restraint of trade on its face, it placed the burden on the NCAA of establishing an affirmative defense
Affirmative defense
A defendant offers an affirmative defense when responding to a plaintiff's claim in common law jurisdictions, or, more familiarly, in criminal law. Essentially, the defendant affirms that the condition is occurring or has occurred but offers a defense that bars, or prevents, the plaintiff's claim. ...
that would justify the deviation from a free market.
Stevens then went through the justifications that were offered by the NCAA. First, although the NCAA claimed that the television plan was a joint venture
Joint venture
A joint venture is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets...
, he noted that unlike Broadcast Music, Inc. v. Columbia Broadcast System, Inc., , the NCAA was not acting as a selling agent and that the sales occurred in a noncompetitive market. Stevens evaulated the NCAA's claim that the television plan enhanced the competitiveness of college football. Since the district court found no procompetitive efficiencies from the arrangement, Stevens rejected this justification. He also said that there was no need to penetrate the market against "nonexistant" competitors. Stevens likewise rejected the defense that the television plan was designed to protect live attendance, stating " The NCAA's argument that its television plan is necessary to protect live attendance is not based on a desire to maintain the integrity of college football as a distinct and attractive product, but rather on a fear that the product will not prove sufficiently attractive to draw live attendance when faced with competition from televised games."
The NCAA position that an interest in maintaining a competitive balance justified the television plan was also rejected. While agreeing with the desire to maintain such a balance, Stevens noted that there was no evidence that the plan succeeded in that effort. The decision of the circuit court was affirmed.
Dissent
Byron White
Byron Raymond "Whizzer" White won fame both as a football halfback and as an associate justice of the Supreme Court of the United States. Appointed to the court by President John F. Kennedy in 1962, he served until his retirement in 1993...
, joined by Justice William Rehnquist
William Rehnquist
William Hubbs Rehnquist was an American lawyer, jurist, and political figure who served as an Associate Justice on the Supreme Court of the United States and later as the 16th Chief Justice of the United States...
dissented from the majority opinion. White stated that while intercollegiate athletics bore a superficial resemblance to professional sports, it was clear that other, non-commercial goals played the main role. Its actions are based on the unique nature of college athletics, and White felt that the restrictions were reasonable. He would have overturned the circuit court.