NCAA v. Board of Regents of Univ.

of Oklahoma
United States Supreme Court, 468 U.S. 85 (1984)

Keywords: antitrust, Sherman Act, television rights, NCAA, trade market

Facts
In 1981, the NCAA adopted a plan for the televising of college football games of
its member institutions for the 1982-1985 seasons. Only ABC and CBS could
broadcast these games. No member of the NCAA was allowed to make any sale
of rights, except in accordance with the plan. Respondents were Universities
that were members of the NCAA as well as members of the College Football
Association (CFA). The CFA consequently negotiated a deal with NBC that was
more liberal and not in compliance with the original NCAA plan. The NCAA
announced it would take action against any school that followed the CFA
agreement, upon which the respondents filed action against the NCAA.

Issue
Did the NCAA’s televised plan constitute an antitrust violation?

Holding
The Court found that NCAA’s television plan violated the Sherman Antitrust
Act. Under the Rule of Reason analysis, the Court is to “form a judgment
about the competitive significance of the restraint.” The Court found that the
restraint on the operation of a free market established that the plan was
operated to raise price and reduce output, both of which are unresponsive to
consumer preference. The Court noted that following the Rule of Reason, such
a deviation from the operation of a free market places a heavier burden upon
the NCAA to justify its plan. After considering the NCAA’s justifications for the
restrictions, the Court determined all to be insufficient. The Court first
rejected the argument that the plan was a joint venture and therefore was
procompetitive, finding that NCAA football could be marketed just as effectively
without the plan. Next, the Court rejected the argument that fan interest in a
televised game may adversely affect ticket sales for games that will not appear
on television. The Court relied on the District Courts studies and findings that
indicated the plan simply does not protect live attendance by ensuring that
games will not be shown on television at the same time as live events. Finally,
the Court rejected the argument that the NCAA has a further interest in
maintaining a competitive balance among amateur athletic teams. The Court
found this justification for the television plan can not be tailored to serve such
an interest. The Court said the plan does not regulate football program
spending or revenue of all members; it simply imposes a restriction on one
avenue of revenue that is more important to some members.

Summarized by: Matt Bower