As antitrust suit looms, time to call BCS' bluff about old bowl system
Utah AG Mark Shurtleff has pledged to file an antitrust suit against the BCS
BCS claims negative legal outcome would lead to return to old bowl system
The rub: Return to old system would land ACC, Big East among have-nots
After years of threats, someone is finally going to take the BCS to court. Utah attorney general Mark Shurtleff has pledged to file an antitrust suit against the BCS in federal court within the next two months. Naturally, the rhetoric coming out of the hollowed-out volcano that serves as BCS headquarters is that any negative legal consequences would send conferences rushing into the arms of the old bowl, pre-Alliance, pre-Coalition, pre-BCS bowl system.
It's time we called that bluff. Go for it. Run to the old system. A large group of schools may find its embrace far less comforting than they remember.
In his suit, Shurtleff will allege "serious antitrust violations that are harming taxpayer-funded institutions to the tune of hundreds of millions of dollars," the Utah AG told USA Today on Wednesday. He expects other states to join. He does not know if the U.S. Department of Justice, which has been investigating the BCS, will join. (At this point, some of you are wondering why any government -- state or federal -- would spend money on this. Ask yourself this: Wouldn't the government usually be interested in a multibillion-dollar business run through public universities? Because that's what this is.)
Can Shurtleff win? That's debatable. Whether the BCS is a cartel that restricts free trade and harms taxpayers -- who fund most of the schools involved -- and/or consumers is a tricky question. If you read this space often, you know I believe the BCS is the college football equivalent of OPEC and that university presidents are fiscally irresponsible for leaving hundreds of millions of playoff TV rights fee dollars on the table so a particular group of schools can maintain control of the sport. But I'm a sportswriter. I'm neither an economist nor an attorney. This group of 21 economists and attorneys believes the BCS is a cartel, and they offer a compelling argument as to why. Two antitrust attorneys, writing in the Sports Business Journal last year, offer an equally compelling argument as to why the BCS does not harm the consumer and should be safe from antitrust challenges.
That could be up to a court to decide, but these cases rarely make it to trial. The antitrust case brought by the universities of Georgia and Oklahoma against the NCAA over regular-season TV rights in 1981 went all the way to the U.S. Supreme Court in 1984, but most of these cases are settled long before the justices get involved. In this case, the conferences and bowls that run the BCS could negotiate a compromise. They could offer a plus-one system like the one touted a few years ago by SEC commissioner Mike Slive and ACC commissioner John Swofford. That's really just a four-team playoff, and it would take the starch out of Shurtleff's argument that the BCS makes it impossible for certain schools to play for the national title. Under that system, Utah would have played in a semifinal in 2008, TCU would have played in one in 2009 and the Horned Frogs would again have played in one in 2010.
But what if the BCS leaders chose to fight and lost? Or what if they went through with their threat to revert to the old bowl system as a defense? After all, the old system truly was an open market. Bowls and conferences and TV networks were free to form whatever pacts they could with no artificial restraints.
The schools involved can't afford to lose the case -- unless they know they'll get an NFL-USFL verdict. The case would cost millions to defend and could result in millions more in damages. With only a handful of athletic departments operating in the black, the damages could be catastrophic. So if at any point the schools feel they might lose, they'll probably cut bait.
If they do, they'll face two choices: the old system, which would bring in far less money, or a playoff, which would bring in far more. Common sense suggests presidents would pick the playoff, which conservative estimates peg at $300-$400 million a year in rights fees on top of what the remaining bowls would bring, but the anti-playoff forces are powerful, influential and firmly entrenched. It's easy to imagine power brokers such as Big Ten commissioner Jim Delany talking presidents into a move back to the old system -- especially since the dramatic recent shift in the value of sports television programming might allow the total revenue to come somewhat close to the revenue generated by the current system, which distributed $169.9 million last year through the BCS and $108.7 million through the other bowls.
So let's say the old system could generate similar numbers, even though it probably can't without the ratings bonanza of a game marketed as a championship. How would such a system look?
Since this is a truly open market, each bowl would be free to negotiate with each conference. To guarantee the huge payouts required to come close to the dollars a playoff would generate, the bowls would have to consider two factors. They would have to sell all their tickets, and they would have to guarantee a television partner a huge rating. Meanwhile, conferences would want to lock in deals with bowls so schools could reliably budget for the future.
The Rose Bowl would be in great shape. It consistently delivers the highest non-title game rating, and if it wasn't handcuffed to the Fiesta, Sugar and Orange bowls, it would command the highest television rights fee. The Big Ten champ vs. Pac-10 champ model has served it well, so there would be no reason to change anything.
The Sugar Bowl has a long relationship with the SEC, the conference that delivers the best regular-season television ratings. It would move to lock up the SEC champ, and if CEO Paul Hoolahan wanted to earn his massive salary, he'd find a way to take away the Big 12 champ from a Fiesta Bowl weakened by scandal. Visions of Alabama-Oklahoma or Georgia-Texas would delight television executives. But since this is a free market and the BCS bowls no longer enjoy exalted status, there is no guarantee the Cotton or Chick-fil-A Bowls wouldn't try to make a run around the Sugar. Both are well-run games played in NFL facilities in huge metro areas with huge airports. The leadership at both bowls is smart enough to make this leap.
But let's say the Sugar locked down both targets and move further down the rights-fee food chain. The Cotton Bowl, now played in Jerry Jones' Football Palace and Chicken-and-Waffle Emporium, needs a premium matchup. But with the Big 12 and SEC champs gone, it has to settle for the second choice from each conference. Why not the champ of another conference? Because the TV executives want all-but-guaranteed numbers. Big 12 No. 2 vs. SEC No. 2 still might produce Texas-Florida or Oklahoma-LSU. Taking the ACC champ might get you Florida State or Miami, which get ratings, but it also might get you Wake Forest. Also, because of geography, the tickets stand a better chance of getting sold with the SEC-Big 12 matchup.
Other than the Fiesta, the Orange Bowl is in the weakest position because the BCS has done it few favors of late. Its ratings stink because it has gotten horrible matchups. So the only way to generate a decent payout is to make a fantastic matchup. With the champs of the Big Ten, Big 12, Pac-10 and SEC gone and the runners-up from the SEC and Big 12 gone, the Orange would face stiff competition from the Fiesta, which also would want to lock up the best potential TV ratings. At this point, the Big Ten runner-up is the best value left on the board. The Orange outbids the Fiesta and grabs that team, which in most years will come from this group: Ohio State, Michigan, Michigan State, Iowa, Penn State, Nebraska, Wisconsin. Those are huge fan bases that make for great TV numbers. So what now? Does the Orange take the ACC champ or go for SEC No. 3? It's pretty much a toss-up.
The Fiesta, after missing out on Big Ten No. 2, takes Pac-10 No. 2 and matches it against Notre Dame. Every year. Because Notre Dame equals ratings and sellouts.
Meanwhile, the Capital One, Outback and Gator bowls all rush in to keep their current Big Ten-SEC matchups. If the bowls had their way, every game would be Big Ten-SEC. Delany and SEC commissioner Mike Slive could visit the campuses of their member schools and fire dollar bills from T-shirt cannons. Further west, The Alamo Bowl takes Big 12 No. 3 and matches it against Pac-10 No. 2. Pac-10 No. 3 and Big 12 No. 4 would face off in the Holiday Bowl, unless the Mountain West could somehow shoehorn its champ into the game.
I could keep going, but you've probably already picked up on the trend. First, you've probably noticed I've barely mentioned any conferences from outside the Big Six. In a reversion to the old system, those conferences would be harmed. But they would be rolling the dice for reasons that will become obvious in a few paragraphs. You've also probably noticed that I barely mentioned the ACC and didn't mention the Big East at all. In an open market, at best, the ACC champ is equal to the No. 3 team in the SEC as a purely economic choice for a bowl game. The Big East champ falls far below that.
So while the ACC and Big East enjoyed equal footing in the BCS, they would occupy their own caste in a reversion to the old system. They wouldn't be the Mountain West or Conference USA, but they wouldn't be the SEC, Big Ten or Big 12, either. Call it bowl purgatory. The real difference would be the money. Even if it the system equaled what the BCS brings in now, the lion's share would be split among four conferences instead of six.
Essentially, that would add 20 schools to the have-nots list. The 2011 season will begin with 66 haves and 54 have-nots in the FBS. Under the system outlined above, have-nots would outnumber haves 74-46 and would win any vote that didn't involve the top revenue-generating schools breaking free from the NCAA. (Which is its own solution, but that's another argument for another day.) John Infante, the author of the excellent Bylaw Blog, explained to me on Twitter that even with the voting rules required to do something as complex as changing the FBS football postseason, the have-nots in this scenario would have the necessary votes to pass anything they wanted if they stood united.
So if the newest have-nots decided they could make more money with a playoff, they might band together with their former serfs and call NCAA headquarters. The following conversation might take place.
Big East commissioner John Marinatto: President Mark Emmert, please.
Emmert: John, how are things?
Marinatto: I'm not going to lie, Mark. It's not nearly as much fun at the kids' table.
Emmert: How can we help?
Marinatto: Well, my league rakes in a ton from that basketball tourney you run. Any chance we could do something like that in football?
Emmert: Well, John, I've always said we know an awful lot about running championship tournaments.
Happy lawyering, BCS.