JUDGE BURCIAGA GETS DOWN TO BUSINESS WITH COLLEGE FOOTBALL
This is an article from the Sept. 27, 1982 issue
Forty-eight hours before his school's 23-17 win over Michigan Saturday night in South Bend (page 24), Notre Dame Athletic Director Gene Corrigan received a phone call from Jim Spence, ABC's senior vice-president for sports. ABC was scheduled to telecast the game, paying the teams $550,000 apiece under terms of its four-year contract with the NCAA, and Spence wanted to know if the deal was still on. "Yes, but the price is now $10 million," said Corrigan. Spence shot back, "How about $5 million?"
They were joking, but the situation that inspired the mock renegotiation was no laughing matter to many people. The day before Corrigan's conversation with Spence, U.S. District Judge Juan Burciaga had ruled in a suit in Oklahoma City brought by the University of Oklahoma and the University of Georgia that the NCAA's control of college football telecasts violated the Sherman Antitrust Act. Accordingly, Burciaga struck down the NCAA's four-year $263.5 million deals with ABC and CBS and its $17.5 million two-year pact with Turner Broadcast System.
Last weekend's TV football schedule, including the Notre Dame-Michigan game, came off as planned, while the NCAA sought a judicial stay of Burciaga's ruling pending a planned appeal. The NCAA argued that by allowing schools to chart their own TV destinies, the decision would result in a mad scramble for TV revenues that would make rich schools richer and drive their less glamorous rivals to gridiron extinction. The ruling, said Tom Hansen, the NCAA's TV program director, "could very easily cause the death of college football."
At issue in the suit was the NCAA's role as the bargaining agent for the 505 schools among its 780 members that play football. In that capacity it has sold games in package deals to the networks and parceled out the resulting income. By limiting the appearances of big powers and guaranteeing those of smaller schools, the NCAA sought to protect stadium attendance and maintain competitive balance. These share-the-wealth measures certainly didn't prevent a schism from developing between football haves and have-nots, but the NCAA could argue that its TV policies helped the game as a whole to flourish.
The antitrust suit grew out of a two-year struggle over TV rights between the NCAA and the 60 members of the College Football Association, an organization of the very powerhouses that benefited most from NCAA TV policies. Many CFA members appeared to be mollified when the NCAA gave them a stronger voice in TV policy earlier this year, but not Georgia and Oklahoma, whose suit distressed a vast majority of NCAA members. But as one of the lawyers for the two schools, Andy Coates, argued, "Just because they're the majority doesn't mean they can confiscate property rights."
The go-ahead to combat what Coates called a "tyranny of the majority" was given, in Oklahoma's case, by the university's then president, William Banowsky, who testified during last summer's two-week trial that removal of NCAA controls would allow more teams to appear on local and national TV. Expressing faith that only good things could possibly happen in a marketplace in which schools would be free to bargain individually, Banowsky said, "A rising tide carries all ships."
Burciaga's verdict rivaled in import the suit, also brought on antitrust grounds, that enabled Al Davis to move the Raiders from Oakland to Los Angeles over the NFL's objections. Although the NCAA, unlike the NFL, is a nonprofit organization, Burciaga said in his strongly worded 98-page opinion that college football "is a business and it must behave in a businesslike manner." The NCAA had argued that members unhappy with its rules could always quit, but Burciaga said that the NCAA wasn't really a voluntary organization because schools interested in maintaining "major" athletic programs had no choice but to belong. Burciaga called the NCAA "a classic cartel" whose package deal with the networks amounted to price-fixing and whose limitations on appearances "seriously restricted free-market forces." Noting that the NCAA feels no need to exercise control over regular-season college basketball TV rights, which are sold by the conferences or individual schools, Burciaga held that the NCAA could easily adopt a hands-off policy in football, too.
The effect of Burciaga's ruling could be a free-for-all over air time and TV rights. What prevented turmoil from developing right away was the uncertainty caused, in part, by the NCAA's request for a stay. When Leonard Klompus, president of Metrosports, a TV packaging firm in Rockville, Md. that provides taped-delay coverage of Maryland games, approached Terrapin Athletic Director Dick Dull about the possibility of airing last Saturday's Maryland-West Virginia game live, Dull rejected the idea, Klompus said, out of fear that if the NCAA succeeded in overturning the decision, such a telecast might count against the Terps' NCAA allotment of appearances. What happens this week depends on whether and how soon the stay sought by the NCAA is granted. The NCAA's Hansen said that half a dozen or more schools were already angling to get on the air independently. There were also reports that NBC, until now a college football outsider, was interested in telecasting this week's Oklahoma-USC showdown.
Over the long haul, the court decision figured to produce a glut of televised football. Robert Wussler, head of WTBS, Ted Turner's Atlanta superstation, told SI Television Writer Bill Taafe that if Burciaga's order is upheld, "you're going to go from three games on a Saturday to 15 in most areas." Wussler's figure includes local, regional and national telecasts both on cable and over-the-air stations, involving big and small schools.
The principal beneficiaries of this expanding market would likely be powerhouses like Notre Dame, Southern Cal and Penn State. Under the NCAA plan, schools were ordinarily limited to $1.4 million in total annual TV revenues, a take that a conference member like USC was obliged to share with the other schools in its league, but the big-name colleges would presumably stand to collect several times that amount by selling virtually their entire schedules to TV—the choicest games nationally, others regionally. In Notre Dame's case, it's conceivable that the entire schedule could be packaged nationally, perhaps in combination with Irish basketball games. Following last week's court action, the CFA indicated that it may revive its efforts to arrange its own network deal, something Executive Director Chuck Neinas feels the organization is legally free to do because it, unlike the NCAA, would be acting as a nonexclusive agent, i.e. it would represent only those schools that want representation.
But a free market would also produce its share of losers. Traditionalists fear that Burciaga's decision could break up conferences because stronger schools, reluctant to share their newfound television riches with other members, would be tempted to go it alone. Another worry is that some schools might strike TV deals to play on Friday nights, which would put college and high school football on a collision course. But the biggest concern is that in a free market a relatively small number of superpowers would dominate exposure and revenues to the detriment of the smaller schools. Rejecting any parallel with basketball, critics of Burciaga's ruling argue that NCAA control of football is necessary because of the concentration of games on Saturdays. Football also has far bigger facilities to fill and larger budgets to protect.
Schools in densely populated markets, like San Diego State, even if they're unable to match the Oklahomas and Pitts in national appeal, could presumably negotiate contracts with local TV stations. But those in weaker TV markets, like Bowling Green, which under the NCAA plan generated $300,000 for itself and other Mid-American Conference members by means of an occasional regional appearance, could be squeezed out of the picture. Even a Big Ten school like Michigan State could be blitzed in its own TV market by the far greater statewide appeal of Michigan.
Division II and III schools have even more to worry about. Bob Swisher, general sales manager of KTZO in San Francisco, says his station would bid aggressively for rights to Cal or Stanford games but adds, "We couldn't do it with San Francisco State or Hayward State." Besides missing out on TV revenues, those schools would stand to be hurt at the gate if Cal or Stanford games were routinely televised. With that sort of situation in mind, Arkansas Athletic Director Frank Broyles warns that loss of NCAA control could result in "an NFL of college football and nobody else playing."
Champions of deregulation and unbridled free enterprise might shrug off such dislocations as the sort of painful but healthy adjustments an open-market system is supposed to make. And, in fact, there may be a self-correcting mechanism that would keep a free TV football market from being as disastrous as Broyles fears. For example, USC Athletic Director Dick Perry, who could easily sell TV rights to his school's entire schedule, nevertheless says he would think twice about doing so. "Do you want all your games televised?" Perry asks. "Is it to your advantage to televise [home] games with Oregon and Oregon State—schools that normally don't draw very well?" In other words, the Trojans might stay off the air to protect their live gate. This in turn could open the way for Cal Fullerton, say, to get on TV on those dates. A spokesman at one SEC school suggests that even Alabama might have trouble carving out a sizable market for all 11 of its games. What kind of ratings could 'Bama possibly hope to get, he asks, for yet another 66-3 rout of Vanderbilt or 45-0 win over Kentucky?
To the extent that they are hurt by the loss of TV and ticket revenues, schools could, instead of folding their tents, reduce expenses by cutting back on travel and curtailing or eliminating athletic scholarships, as Division II and III schools now do. In fact, a clear separation of college football into superpowers on one hand and schools that treat football as an integral part of campus life on the other is a change that some would-be reformers of intercollegiate sport advocate. Unfortunately, before they would think of deemphasizing football, many schools would no doubt take the less harsh, to them, step of eliminating non-revenue sports.
Michigan Athletic Director Don Canham, who opposes an open TV market even though his school would surely benefit by it, mentions another way teams might seek to survive in such a Darwinian environment. "If we're getting $4 million for TV, who's going to watch that I'm not cheating?" Canham asks. "What would an O.J. Simpson be worth if a $4 or $5 million pact was riding on who he's playing for? Darn right it would encourage cheating." As Canham divines, an intensified rush for TV dollars would almost certainly increase the professionalization of college football and further undermine, if that's possible, the notion that the game is played by ordinary Joe Colleges.
It might also crimp NCAA enforcement efforts under which, as things now stand, cheaters are barred from appearing on TV. Although Burciaga didn't address the issue, USC's Perry, whose school has been prohibited from appearing on live TV in 1983 and 1984, says, "I don't see how the NCAA can impose those sanctions now that it doesn't have control over TV." The NCAA has other enforcement measures at its disposal, including restrictions on scholarships and the size of coaching staffs, but these aren't ordinarily as effective as the threat of banishment from television.
Canham, for one, vows to continue to honor the TV deals worked out by the NCAA and urges other schools to do the same. "If Oklahoma, Texas and Georgia don't want to, let them play a round robin," he says. Texas is another school that has vigorously claimed the right to control its own TV destiny. With many other college administrators echoing Canham's sentiments, it appears more than likely that the NCAA, if it loses its appeal, would ask Congress for an antitrust exemption that would allow it to sell TV rights as a package, the sort of exemption that pro sports leagues won in 1961.
Meanwhile, even Oklahoma, having proved its point in court, seemed suddenly wary of a completely free market. J.R. Morris, the school's interim president, was now calling instead for "reasonable regulatory practices" that would merely give schools "more control over their property rights." He added: "We have at all times maintained that the NCAA performs a regulatory function essential to intercollegiate athletics."
But there remained a chance that Oklahoma, Georgia and other like-minded institutions might one day have the tables turned on them. It's possible that athletes, asserting their property rights, might clamor for a bigger piece of the TV pie, too. A court in Indianapolis recently awarded an injured Indiana State football player workmen's compensation on the theory that, for purposes of football, he was an employee. As for the possibility that college athletes, who now receive relatively little compensation—often not even an education—for their efforts, might one day sue to win the right to draw salaries, Dave Cawood, the NCAA's public relations director, says, "In the present judicial climate, you can't tell what might happen." But Cawood shouldn't blame the judicial climate. However unwelcome Burciaga's decision may have been to many in college football, it should be emphasized that he isn't responsible for the fact that big-time, big-bucks college football has become more of a commercial than an educational enterprise. His ruling merely reflected that this was already the case.