Lawsuit

[davish75]

Why hasn't anyone sued the BCS?

[EastStang]

The BCS was formed after the Univerity of Oklahoma won an antitrust suit against the NCAA which said that it could have its own TV contract rights. Thus, the Big schools started the BCS to negotiate contracts with broadcast networks and bowl games and to try and meet the desire of the public to crown a National Champion between the first and second ranked teams. Thus, to win an antitrust suit against the BCS, you would have to prove that it was a conspiracy to restrain trade which it arguably is because it ties up bowl rights and television contract rights. However, to successfully sue you must not only prove a restraint of trade but also damages. What provable damages does a 3-9 team have? The USFL sued the NFL under anti-trust theories and after a decade of litigation won. It was awarded $1 by the jury which got trebled to $3. Not a real big incentive for change is it.

[PK]

I think the idea of suing probably is more rightly laid at the feet of the conferences. The damages are the dire finacial condition of most of the schools, if not all of the schools, in non-BCS conferences due to the BCS conferences tying up all the big TV money. Even Baylor would be in deep finacial trouble if it were not for their being in a BCS conference...and they are there totally by the luck of having Ann Richards in office at the time of the SWC break up and not that they are better than 3-9.

It would be hard for an individual school to take on the BCS conferences in a lawsuit and prove the damages, because their individual damages are just a very small amount of the total real monetary damage being done to non-BCS college football by the actions of the BCS conferences.

[cowboypony]

No doubt the damages in an anti-trust would likely be established by the conferences and not individual schools. Also, the suit would garner much more attention and threat to the BCS if brought by most if not all non-BCS conferences.

In addition, however, I believe that damages can clearly be calculated by individual schools - yes, even those that go 3-9, as to being in a BCS v. non-BCS conference. In fact, a school like Baylor is the prime piece of evidence. They are 3-9 and look at their finances. Compare that to the finances of 3-9 teams in non-BCS conferences. Take it a step further, compare the finances of Colorado State, BYU, Louisville, etc, - teams with significantly better records over the years - and compare them to Baylor, Vanderbilt, Northwestern, etc.

The BCS is clearly a system on inclusion and exclusion. This is the crux of what the federal anti-trust laws are intended to prevent.

[Stallion]

hmmm! that damages question is extremely interesting but I doubt they would attempt to prove it through the conferences since the US Supreme Court has already established that the TV rights etc are owned by each school. The non-BCS schools might be defeating their own argument if they claimed otherwise. It might be done by quantifying past TV, Bowl, and other revenues based on the market in the years preceding the conspiracy with reduced revenues since the conspiracy began and then factoring in an inflation component and perhaps a multiplier for increased revenue avialiable in the marketplace for Bowls and TV since the conspiracy. In any event even if the non-BCS schools got $3 in damages as was suggested is possible the anti-trust laws also MANDATE attorney's fees, costs and injunctive relief to the "prevailing party" to prevent future anti-competitive conduct thereby destroying the BCS systen. Under antitrust caselaw which I have reviewed within the last 5 years a "prevailing party" can be a litigant who wins only nominal monetary relief although I know that certain of the more conservative justices in the various circuits have attempted to curtail such recovery. Certainly injunctive relief on its own would be a major victory for the non-BCS schools. The USFL collapsed on its own but the benefits to the non-BCS schools could be substantial even with a nominal damages award.

[This message has been edited by Stallion (edited 05-30-2003).]

[cowboypony]

Let me elaborate a little further on what I said and Stallion's response. I'm not sure we're that far apart. First of all, there is a clear distinction between the non-BCS and the USFL. The USFL was NEVER part of the equation in the NFL. The non-BCS, on the other hand, was once part of the dance.

By my damages assessment, I never intended to imply that damages would or should be the main purpose of such a lawsuit. Damages, as in many lawsuits (except Personal Injury, med mal, and a few others)is merely a way of raising the stakes in settlement negotiations. I see such a lawsuit by the non-BCS this way. The main objective is to obtain an injunction against the current system. Much like the wealthy school districts are attempting to do with Robin Hood.

While I feel strongly that damages could be established - in fact, I'm sure the forensic litigation section at KPMG could have a field day with this, I also feel that is not the main objective. As Stallion correctly points out, the Supreme Court has already ruled that the TV rights belong to individual schools. It has not ruled, however, that a group of schools can ban together and squeeze the life out of other schools that were once part of the same group. Again, distinctly different from the USFL lawsuit.

[EastStang]

I think the problem with either an injunction model or a damages model is that antitrust law does not prevent corporate darwinism (survival of the fittest), and the University of Oklahoma case implied that. The NCAA had a more socialistic model, that all schools should benefit equally with their monies. The last five years showed that people want to watch OU vs. Texas, Ga. vs. Fla., UCLA vs. USC., ND vs. Mich. State. Mich. vs. Ohio State, not SMU vs. Fresno. So, the question is also, whether antitrust laws can compel television networks to pay for programming no one wants to see, or alternatively, must the BCS schools pay the non-BCS schools for the right to have people see the games they want to see on television. I think the Courts will say "No".

[cowboypony]

EastStang,

Odds are that you're right. I'm not suggesting that an anti-trust suit is simply nor would it be successful. While "survival of the fittest" is indeed allowed, the structure and process that leads to competition being eliminated is what is in question here. You point out that during the last 5 years that people want to see Fla v. Fla St., OU v. TX, Ala. v. Auburn, Ohio St. v. Michigan. It would be ludicrous for me to argue that SMU, BYU, Fresno, etc. can create that kind of draw. Baylor, Vandy, Oregon State, Rutgers, etc. can't either. Thus, the market in general has not created the disparity as much as the system. It's like a "chicken v. egg" thing. All I'm saying is that there is a system that has been created that will not allow for competition. If the argument is that TV controls it all (which I agree it does) then why does Baylor, Vandy, etc. not have their games televised? Yet, there is a system that allows them to benefit from it.

While I am a lawyer, I am clearly not an anti-trust lawyer. In fact, I doubt any person on this board can claim such a distinction. Thus, I'm only posting for the sake of discussion. As in anything with the law, however, nothing is black and white. In the end, do I think such a suit will be filed? No. Could such a suit be successful? Who knows.