Federal Antitrust Inquiry Focuses on ESPN Practices
By RICHARD SANDOMIR
The Justice Department's antitrust division has opened an inquiry into how ESPN acquires and uses its college football and basketball programming, two television industry executives said.
A lawyer for the antitrust division has begun to contact the athletic conferences, one of the executives said.
ESPN and Justice Department officials declined to comment.
The investigation, the executives said, may be examining the practice of ESPN televising only a small portion of the games it acquires from a conference, then restricting the conference from making deals with any other networks.
They said the inquiry could also focus on how ESPN uses football and basketball as leverage with conferences, and how it schedules football games at nontraditional times like Tuesday, Wednesday, Thursday and Friday nights to give colleges national exposure for recruiting.
College football and basketball are omnipresent now, nationally and locally, on CBS and NBC, on the Fox Sports Net regional networks and on TBS. But by any measure, ESPN is the biggest force. It carries several hundred games on ESPN and ESPN2, through syndication and pay-per-view. ABC Sports, its corporate sibling under the Walt Disney Company, carries a full schedule and major college football bowl games.
For decades, college football was run by the National Collegiate Athletic Association, which regulated the number of appearances a football team could make and negotiated the price of those appearances.
But 20 years ago, the Supreme Court ended the N.C.A.A.'s control over the market for televising college football by ruling that it had, in effect, become a classic cartel. The 7-2 decision was the result of an antitrust suit filed by the University of Georgia and the University of Oklahoma in 1981.
ESPN has the rights to numerous conferences, including the Atlantic Coast, Big East, Big Ten and Southeastern Conferences in football and the Big East, Big 12, Big Ten and A.C.C. Conferences in basketball.
ESPN and ABC recently renewed their deal to carry A.C.C. football for seven years, at $260 million to $270 million, and to add a conference championship game in 2005. ESPN is in arbitration with the Big East to determine what to pay the conference because of the loss of Miami, Virginia Tech and Boston College to the A.C.C.