NCAA v. Board of Regents of University of Oklahoma, 468 U.S. 85; 104 S. Ct. 2948; 82 L. Ed. 2d 70 (1984)
Facts—In 1981 the National Collegiate Athletic Association (NCAA) adopted a plan for televising football games of member institutions. The plan proposed to reduce the adverse effect of live television upon game attendance by limiting the total number of football games and the number that any one college may televise. The NCAA had separate agreements with ABC and CBS that allowed each network to telecast the live “exposures.” The College Football Association (CFA) wanted a voice in the formulation of television policy and contracted with NBC. The NCAA threatened to retaliate against any member that com- plied with the CFA-NBC contract. The District Court said NCAA had violated the Sherman Act. The Court of Appeals affirmed the decision.
Question—Does the telecasting plan of NCAA violate the Sherman Antitrust Act?
Decision—Yes.
Reasons—J. Stevens (7–2). “[T]he challenged practices of the NCAA constitute a restraint of trade in the sense that they limit members’ freedom to negotiate and enter into their own television contracts.” Because it places a ceiling on the number of games member institutions may televise, “the horizontal agreement places an artificial limit on the quantity of televised football that is available to broadcasters and consumers . . . the challenged practices create a limitation on output; our cases have held that such limitations are unreasonable restraints of trade.” “Under the Sherman Act the criterion to be used in judging the validity of a restraint on trade is its impact on competition . . . because it restrains price and output, the NCAA’s television plan has a significant potential for anticompetitive effects.” The Court found that by “fixing a price for television rights to all games, the NCAA creates a price structure that is unresponsive to viewer demand and unrelated to the prices that would prevail in a competitive market.” In addition, the NCAA’s plan would foreclose many telecasts that would occur in a competitive market. The judgment of the Court of Appeals is affirmed.
J. White, a former professional football player, argued in dissent that as “an unincorporated, nonprofit educational institution,” the NCAA should be treated differently than professional sports leagues.