Board of Regents v. NAT. COLLEGIATE ATHLETIC ASS'N

• Decision Date: 15 September 1982
• Docket Number: Civ. No. 81-1209-BU.
• Citation: 546 F. Supp. 1276
• Parties: BOARD OF REGENTS OF the UNIVERSITY OF OKLAHOMA, and the University of Georgia Athletic Association, Plaintiffs, v. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, Defendant.
• Court: U.S. District Court — Western District of Oklahoma

546 F. Supp. 1276

BOARD OF REGENTS OF the UNIVERSITY OF OKLAHOMA, and the University of Georgia Athletic Association, Plaintiffs, v. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, Defendant.

Civ. No. 81-1209-BU.

United States District Court, W. D. Oklahoma.

September 15, 1982.

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Andy Coats, Clyde A. Muchmore, Oklahoma City, Okl., Stanley M. Ward, Norman, Okl., for plaintiffs.

Robert H. Harry, Denver, Colo., James D. Fellers, Oklahoma City, Okl., Richard K. Andrews, George H. Gangwere, Kansas City, Mo., for defendant.

MEMORANDUM OPINION

BURCIAGA, District Judge, Sitting by Designation.

THIS MATTER came on for trial to the Court on the merits on June 7 through 15, 1982. At issue is the legality of the controls exercised by the National Collegiate Athletic Association over the televising of college football games. The plaintiffs, both members of NCAA, allege that these controls violate the Sherman Antitrust Act, 15 U.S.C. §§ 1-2 (1980). Having considered the pleadings, evidence, briefs and memoranda submitted by the parties, the Court holds as follows:

(1) The television football controls exercised by NCAA constitute an horizontal agreement among competitors to fix prices and restrict output, in violation of 15 U.S.C. § 1;

(2) The controls constitute a group boycott, in violation of 15 U.S.C. § 1;

(3) The NCAA exercises monopoly power over the market of college football television, in violation of 15 U.S.C. § 2; and

(4) The plaintiffs are entitled to injunctive relief under the Clayton Act, 15 U.S.C. § 26 (1980).

This memorandum opinion shall constitute the Court's findings of fact and conclusions of law.

I. Findings of Fact

The parties to this case are the Board of Regents of the University of Oklahoma, the University of Georgia Athletic Association, and the National Collegiate Athletic Association. Plaintiff Board of Regents of the University of Oklahoma hereinafter, "Oklahoma" is the governing body of the University of Oklahoma. The Board is responsible for all of the operations of the University, including its intercollegiate athletic program. Oklahoma is a member in good standing of the National Collegiate Athletic Association, the defendant herein.

Plaintiff University of Georgia Athletic Association is a non-profit corporation created under the laws of the State of Georgia. The Association has the responsibility of operating the intercollegiate athletic program of the University of Georgia. The University of Georgia is a member in good standing of the National Collegiate Athletic Association. The executive personnel of the University and the Athletic Association overlap. They shall be collectively referred to herein as "Georgia."

Defendant National Collegiate Athletic Association hereinafter, "NCAA" is a private non-profit association organized in 1905. NCAA consists of approximately 900 members. Membership is open to four-year institutions which meet certain academic standards. Allied and Associate membership is open to athletic conferences, associations and other groups interested in intercollegiate athletics.

Oklahoma's intercollegiate football program has, over the years, produced many outstanding and highly-ranked teams. Oklahoma is capable of attracting large national television audiences for its televised games. Football is the only sport sponsored by Oklahoma which actually generates revenue beyond the costs of fielding a team. The profits generated by the football team support all of the other sixteen men's and women's sports in which Oklahoma participates. In recent years, these programs have become more and more expensive to maintain due to increasing costs and the expansion of athletic programs for women. As a result, Oklahoma seeks to maximize its revenues from football television. Like Oklahoma, Georgia has compiled a record of outstanding success with its intercollegiate football program, and football is the major revenue-producing sport for Georgia. Budgetary pressures have forced cuts in Georgia's athletic program, including the elimination of its intercollegiate wrestling program. Georgia also seeks to maximize the revenues generated from the televising of its football games.

It is useful to present as background the history of NCAA and the football television controls it exercises. NCAA operates pursuant to a Constitution and Bylaws adopted by the membership and subject to amendment by the members. The Constitution, Bylaws, Executive Regulations and Official Interpretations are published in a printed manual and distributed to all members. The general policies of NCAA are established by the membership at annual conventions. When the annual convention is not in session, policy is established and directed by the NCAA Council of 22 members elected by the entire membership at the annual convention. NCAA has a professional staff located at its headquarters in Shawnee Mission, Kansas. Some 80 employees execute NCAA policy under the supervision of Executive Director Walter Byers.

NCAA controls all forms of televising of football games of member institutions during the fall football season. NCAA has exercised such control since the early 1950's.

When television first became a significant part of America's entertainment industry in the late 1940's and early 1950's, there were no controls on college football television. Each college was free to make its own contracts with television networks and stations without limitation. The University of Pennsylvania, for example, was televising all of its home football games in the Philadelphia area during this time. NCAA members expressed concerns to NCAA that unlimited telecasting of college football games might be detrimental in a number of ways. Chief among their concerns was the belief that uncontrolled televising of games would result in a decrease of live attendance at other games being played at the same time and in the same geographic area as the televised games being aired.

The NCAA appointed a Football Television Committee to study and report on these concerns. The Committee retained the services of the National Opinion Research Center hereinafter, "N.O.R.C." at the University of Chicago. Beginning in 1952, N.O.R.C. conducted a series of studies of the effects of televised college football on gate attendance of college football games. These studies were conducted through 1957, and tended to support the notion that televised college football resulted in a decrease in live gate attendance for the teams which were not being televised. On the basis of the first of these annual studies, the NCAA instituted the first controls on football television in 1953.

Based on the N.O.R.C. studies, the Football Television Committee developed a program of controls. These controls included provisions that television exposures would be limited to one college football game per week on Saturday afternoons during the fall season, that no team would appear on television more than once per season, that the sponsors would select the games to be televised and that the revenues would be divided among the teams playing the game and the NCAA.

From their inception, these controls were approved by a vote of the entire membership of the NCAA, including a good many members which did not even field a football team. Of some 800 voting members, less than 500 are schools which play football. Of these 500, only 187 are Division I schools. Schools in Division I dominate college football television.

The NCAA Television Committee periodically circulated a questionnaire to NCAA members in order to obtain their suggestions as to what types of controls were desirable. A Plan was then developed by the Committee based on the desires of the membership as expressed in the responses to the questionnaires. The proposed Plan was then submitted to the membership for a vote by means of a mail referendum. Once approved, the Plan formed the basis for NCAA's negotiations with the various networks. From 1952 until 1977, NCAA followed essentially the same procedure in contracting with the networks for the right to televise the football games of NCAA members. Beginning in 1977, the membership did not vote on the actual Plan. Instead, a number of "Principles of Negotiation" were distributed to and voted upon by the membership. While these "Principles" provided a general basis from which NCAA proceeded to negotiate with the networks, the evidence shows that substantial departures from these "Principles" have occurred without any form of prior approval by the membership.

Until 1982, the contracts were always made with a single network, although all three of the major networks competed for the rights, and each has held those rights at one time or another. The length of the contracts was always either one or two years until 1977, when NCAA contracted with American Broadcasting Companies hereinafter, "ABC" for a four-year term covering the 1978 to 1981 seasons. ABC held the exclusive right to broadcast NCAA football at the network level from the year 1965 to 1981.

The basic concepts of the original controls have survived to the present. The Plan is reviewed and changes in the Plan are made periodically to reflect the concerns of the membership. The most recent significant changes include:

(1) Contracts with two national networks instead of only one beginning in 1982;

(2) A supplementary series of games on cable television beginning in 1982;

(3) Continuing increases in the number of games to be televised each season;

(4) Continuing increases in the number of times any one school can appear during a given season;

(5) Development of regional, as opposed to national, telecasts; and

(6) Increased televising of games where circumstances warrant "exceptions" to the basic plan for a series of network telecasts.

The Plan allows NCAA members a limited opportunity to televise their games...