Friday, December 4, 2009

Boise State's Antitrust Claim Against the BCS


[This article was written by Chris Stanley, a third year law student at The Ohio State University Moritz College of Law.]

The Boise State Broncos football team has proven that it can compete with the best football programs in the nation on several occasions. Perhaps the most noteworthy example was the victory in the 2007 Fiesta Bowl over the Oklahoma Sooners. Although the Broncos performance in recent years is turning heads, the current bowl system in the NCAA makes it difficult for Boise State to play in the top-tier BCS bowls.


The President of Boise State University has publicly voiced his frustration for the current BCS selection system, and the issue is heating up.[1] In an interview with 60 Minutes, President Obama even suggested a change to the system.[2] Additionally, one of the most vehement opponents of the current BCS system is Senator Orrin Hatch of Utah. He recently suggested that the current BCS system violates the Sherman Anti-trust Act.[3] If a suit is going to come about, I think Boise State would be a good Plaintiff to bring such a suit.


Many football programs are able to benefit from a common cycle that allows them to build their programs: (1) Perform well, (2) Get lots of money for the program from revenues that come from a big bowl game, (3) Use the money to hire the best staff and improve facilities, (4) This leads to better recruiting, (5) This leads to better performance, and we are back to the start of the cycle.

This cycle, however, only applies to certain teams under the current BCS system. Why is that? I don’t think the NCAA can really provide a reasonable answer to this question. Why, BCS committee members, does Boise State not have the same opportunities as, say, Ohio State or Oklahoma (whom they recently defeated in a BCS game) to reach the BCS bowl games and get the big bucks, allowing the program-building cycle to benefit the Broncos equally? One can argue that this restraint of trade is unreasonable, and that an antitrust suit is ripe. Below, I will take a second to lay out the basics of that suit, and then analyze Boise State’s case.

THE ANTITRUST SUIT

To win under Section 1 of the Sherman Act, Boise State must show that the restraint of trade is unreasonable. This can be difficult in the context of sports, but it is possible. As the Supreme Court held in NCAA v. Board of Regents of Oklahoma, restraints that ordinarily would be held "illegal per se" in other business contexts will get rule of reason analysis in the context of sports.[4] This is the case here because restraint of trade is essential if the NCAA football product is to be available at all. Given the unique nature of college football (and other sports) and the need to have competitive matchups, the NCAA will likely be given some leeway to evaluate the competitive character of bowl games as they see fit. Therefore, this case will undoubtedly be analyzed under the rule of reason.

Boise State should not have any difficulty demonstrating that the BCS method of selecting teams and distributing revenue is a sufficient restraint of trade to shift the burden to the NCAA to justify this restraint of trade. The NCAA will likely offer an affirmative defense in an attempt to justify this deviation from free market principles. The NCAA will probably argue that the BCS system is aimed at creating a competitive environment. However, there are several factors that might make Boise State a candidate to defeat this argument when raised by the NCAA. If they can defeat this argument and show that less-restrictive alternatives exist, they can win an antitrust suit against the current BCS system.

BOISE STATE’S CASE

In my opinion, the most competitive BCS Bowl game of the 2007 bowl season was the Boise State vs. Oklahoma matchup in the Fiesta Bowl. The Broncos got their shot at a BCS game, and they won. This epic game was the buzz of the offseason, and is still remembered as one of the best games in college football history. Everyone seems to remember the statue of liberty play or the hook and lateral from that game. What many people don’t remember is that Boise State finished as the only undefeated team that season. Although they were the only team not to lose a game they were not the national champions. That honor, and all the money that goes along with it, went to the 1-loss Florida Gators.[5]

During the selection process for the 2009 BCS bowls, Boise State was not chosen to compete in a prestigious BCS game. Despite being 12-0 and ranked higher than Ohio State in the BCS rankings, Ohio State got the at-large bid to play Texas in the Fiesta Bowl.[6] So what is really going on here? The current system in place for choosing teams to compete in BCS games selected a team that was ranked lower, but why? Is this restraint of trade really promoting competition?

Boise State has a strong argument that the system is not promoting competition, but is unfairly colluding to discriminate against schools that are not in the six major conferences.[7] The last time Boise played a Big 12 team in a BCS game, they won and it was one of the most competitive games all season. In 2009, they were ranked higher than Ohio State and should have played in the Fiesta Bowl against Texas, a Big 12 team.

This season Boise beat Oregon when Oregon was ranked 16th in the country. The Broncos are currently undefeated, and may or may not receive a BCS birth. Many commentators point out that the Broncos play a weak schedule and do not deserve a BCS birth because of this. They might have a point about the schedule, but Boise is barred under the current system from doing anything about who they play. They are destined for San Diego County Credit Union Poinsettia Bowl after Other Crappy Bowl because nobody will play them.

They sent out an open invite to any big time schools to play them at the home field of the big time school.[8] No takers. None of the schools from the big conferences want to play Boise State. The Broncos can’t change the conference they are in either, so they are just stuck playing a weak schedule unless the big schools will agree to play them. So far, when the big schools have played Boise, it hasn’t worked out too well for the big schools (Oregon and Oklahoma).

Boise might argue that this looks like an implicit agreement between the BCS conference contenders to keep BSU, and other schools like it, out. In fact, BSU’s president has hinted at such collusion along with Orrin Hatch and many others.[9]
If you look at all these factors together, Boise can argue that there is a presumption against allowing BSU to play in a BCS game. This presumption favors the 6 major conferences that get automatic bids to the BCS bowls as well as most at-large bids. They can argue that this is an unreasonable restraint of trade. It would be reasonable if based on accurate assumptions aimed at promoting competition, but BSU has proven that the assumptions are unreasonable by winning against the best. Furthermore, it is beginning to look more like the BCS is set up as it is to keep revenue distribution within the big six conferences, and less like an attempt to increase competition.

THE NUMBERS

To quote Senator Hatch, the current BCS system is “an agreement between the preferred conferences and the major bowl games as to how they will compete with one another and, more apparently, how they will compete against the non-preferred conferences. Worse still, under the current BCS regime, each of the six privileged conferences is guaranteed to receive a large share of the BCS revenue to distribute among their member schools. The remaining five conferences, which include nearly half of all the teams in Division I, all share a much smaller portion of the BCS revenue, even if one of their teams is fortunate enough to play their way into a BCS game. Over the lifetime of the BCS, the preferred conferences have received nearly 90 percent of the total revenues.”[10] That leaves only 10% for the remaining five conferences.

Another interesting fact is that the chairman of the ACC is the head of the BCS. Boise can argue that he has an interest in keeping the revenues where they are, not in diluting the revenue of the ACC teams for the sake of competition. The WAC chairman recently hired a PR firm to improve Boise’s bid at a BCS game this season.[11] I wonder what type of steps the head of the ACC (and BCS) takes to improve the prospects of schools in the ACC or other schools in the big conferences? This conflict of interest has really not been discussed that much, but when you look at the numbers, it is a glaring problem for the BCS if the system intends to at least appear impartial.

CONCLUSION

Boise State can argue that the BCS discriminates against football programs not housed in a major conference by creating a presumption against those programs getting a BCS birth and all of the benefits that come with BCS births. They can argue that this is an illegal restraint of trade, and there are several options that are less restrictive:
(1) Keep the automatic bids for the big 6 conferences, but give at-large bids to teams based on BCS computer rankings. This eliminates financial considerations that may result in 10th ranked Ohio State getting a Fiesta Bowl Bid over 9th ranked Boise.


(2) Take the top 10 ranked teams at the end of the season using the current formula rather than guaranteeing certain conferences automatic bids.

(3) Change the formula altogether so voters who don’t watch every team (such as Utah, BSU, and Hawaii) are not the ones determining outcomes that affect multi-million dollars at institutions (most state funded by taxpayer money) of higher learning.

(4) Allow BSU to play a tougher schedule so they have a chance to play in big games under the current formula. Maybe allow teams to join BCS eligible conferences if they perform well.


(5) A playoff system.


[1] See President Kustra’s comments at: http://news.boisestate.edu/blog/2009/10/antitrust-implications-of-the-bcs-system/
[2] Michael Wilbon, When the President-Elect Talks, The BCS Should Listen, available at: http://www.washingtonpost/ .com/wp-dyn/content/article/2008/11/18/AR2008111803615.html
[3] See his comments at: http://hatch.senate.gov/public/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id =56f346ed-1b78-be3e-e09d-5fcd7bca8fcd&IsTextOnly=0
[4] 468 U.S. 85 (1984).
[5] Similarly, last years Utah Utes went undefeated after winning their BCS game, only to finish 2nd in the final rankings.
[6] Instead of a BCS bowl, Boise got a bid to the San Diego County Credit Union Poinsettia Bowl.
[7] The SEC, Big 10, PAC 10, Big 12, ACC, and Big East all get automatic bids to the BCS games, and they are frequently chosen over schools from other conferences for at-large bids as well.
[8] Dan Wetzel, Boise BCS Blocked, available at: http://rivals.yahoo.com/ncaa/football/news?slug=dw-boise110709&prov=yhoo&type=lgns
[9] See President Kustra’s comments at: http://news.boisestate.edu/blog/2009/10/antitrust-implications-of-the-bcs-system/
[10] See his comments at: http://hatch.senate.gov/public/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id =56f346ed-1b78-be3e-e09d-5fcd7bca8fcd&IsTextOnly=0
[11] PR Firm Hired to Make Push for Boise State, available at: http://sports.espn.go.com/ncf/news/story?id=4623676.





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7 comments:

Anonymous said...

This would get an A on any law school exam in America.

What-is-this said...

Good to see TNR weighing in on matters of real importance. I'd agree that the Utah AG is wasting his taxpayers money here, though.
"Is it really that much harder for an outstanding team from a non-BCS conference to earn a trip to a BCS bowl, compared to an equally good team from a BCS conference?"

Chris Stanley said...

What would have happened if Nebraska beat Texas on Saturday? Nebraska would take a spot away from either Iowa or Boise State. Which team do you think they would take it from?

Last year, they awarded the Big Ten the last spot by giving Ohio State the nod over Boise State. Since I go to Ohio State, and love the Buckeyes, I was happy with the decision, but it really isn't fair. Boise was ranked higher than the Buckeyes, but didn't get the bid.

To put it another way, what do you think would happen if this year's Iowa team played in the WAC or MWC? If they lost a game, they would have ZERO chance of getting into the BCS, whereas Boise could have lost against a Big Ten conference opponent, AND a strong non-conference opponent and still get in.

So to answer your question, I think it is much harder for a team from a non-BCS conference to earn a trip to a BCS bowl. If they have one bad break in a close game, or their star player is out for just one weak, and they lose, its over. Other conferences can weather these problems because they have room for error under the current system.

Chris Stanley said...

Also, what if the Big East is down one year. All the teams in the conference are terrible. They all go nearly .500 in conference play, and they lose all their non-conference games. In this scenario, the champion of the conference would get a bid at, say 7-5, over a one-loss Boise team.

This is simply not fair.

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