'84 NCAA Supreme Court Case ... 30 Years Later
MORGANTOWN, W.Va. - Late last month was the 30th anniversary of the 1984 Supreme Court ruling that the NCAA’s television plan violated the Sherman Anti-Trust Act as a restraint of trade.
Those who study, practice and discuss law believe that decision was the seminal moment in collegiate sports and set the industry down the path that it is currently on today.
Chuck Neinas, former commissioner of the Big Eight Conference and acting commissioner of the Big 12 when West Virginia University joined the league in 2012, was heavily involved in that case as executive director of the College Football Association (CFA).
It was Neinas’ organization, the CFA, formed in a Denver hotel ballroom in 1976, that provided the mechanism for member institutions to challenge the way the NCAA conducted business.
To those who have a superficial knowledge of the Supreme Court case, it seemed to be driven by certain elite schools wanting to have more of a say in the decision making process for television. Actually, Neinas, speaking from his Colorado home recently, said the whole case was driven by the NCAA’s inability to restructure.
Therefore, a brief history lesson is in order.
In 1973, the NCAA had the first of what became known as the "economic conventions” aimed at reining in athletic budgets and making the playing field more even for the lesser visibility schools. Things such as the maximum size of football coaching staffs and grants-in-aid limitations were implemented.
“Previous to that time the NCAA rules and regulations basically didn’t affect your daily operation of athletics except for the enforcement of some eligibility rules,” said Neinas.
And because the NCAA had a one-institution, one-vote system, the higher visibility schools were often outnumbered when it came to major issues, particularly those dealing with finances. Subsequently, schools such as San Jose State, Villanova and Fordham had a big say in how schools such as Texas, Oklahoma and Michigan did their business.
"The main problem was there were people who didn’t have football that voted on football-related issues,” recalled Neinas. “To the NCAA’s credit, it tried twice to restructure but it failed. Recognizing that, what happened was the group from the major conferences got together (to form their own organization - the CFA) and said, ‘Look, if we don’t stay together as a lobbying group we will definitely be out-voted.’”
By then, Neinas was becoming fully involved in CFA activities, eventually relinquishing his position as commissioner of the Big Eight in 1980 – a move many of his colleagues felt was foolhardy.
“When I announced to the Big Eight brethren that I was considering doing this they said why? The Big Eight was very successful at that time and as we adjourned for lunch there were about 10 people sitting around the table and they were saying I was committing professional suicide,” Neinas recalled. “Seated right next to me was (former Nebraska coach and athletic director) Bob Devaney. I turned to him and said, ‘Coach, what do you think?’ He looked at me and he said, ‘You know, it’s no different than a third down, just make sure whatever play you call works.’”
Sage advice, for sure, and one of the first things Neinas’ new organization was able to get accomplished was creating Divisions I, II and III.
“The problem was, everybody wanted to be Division I,” said Neinas.
In addition to the three divisions, in subsequent meetings it was determined that further classifications were in order, so I-A, I-AA and I-AAA were added to separate “The Headliners” and “The Contenders” from “The Spoilers” and “The Ivies” – classification terms used by author Keith Dunnavant in his very interesting 2004 book The 50 Year Seduction (in Dunnavant’s college football class system West Virginia University at that time would have been considered a Contender as an Eastern independent).
“The thing that is so ironic, based upon today, is at one time we actually discussed having a Division IV,” said Neinas. “I’ll never forget the late Bob James, who was commissioner of the Atlantic Coast Conference, he said, ‘Hell, we don’t have to be Division I. We can be Division IV because we already know who we are.’”
When the discussions on college classifications stalled, the CFA then moved on to academic standards, improved recruiting rules and then television.
TV was another sensitive issue with The Headliners going all the way back to the early 1950s when Notre Dame wanted to have its own television network outside of the NCAA.
By the late 1970s, the NCAA’s television plan was providing more games for fans to watch, but it would not change the appearance rules and revenue sharing for its member institutions.
For instance, no school could appear on national television more than five times over a two-year period so consequently, schools such as West Virginia University were rarely ever on TV, the Mountaineers making only three regional appearances on ABC during a nine-season period from 1972-80.
“What happens is the Notre Dames, the Oklahomas and the Michigans - which basically provided the teams that sold the whole program - were finding that the percentage of appearances, and therefore, the percentage of dollars were declining,” Neinas explained.
As an example, on one particular weekend a game featuring Oklahoma and USC – two top five teams at the time – was split with a traditional black college game that aired on two stations in the South and a Southern Conference game that was shown on a only handful of stations in the Southeast. The USC-Oklahoma game was televised to 99 percent of the country, yet the participants in that game received the same revenue as the schools participating in the games that aired on the remaining 1 percent of the stations across the country.
“That’s when the CFA membership voted to explore having their own television plan,” said Neinas.
In 1981, the CFA successfully negotiated an agreement with NBC outside of the NCAA’s television arrangements with ABC, CBS and TBS. According to Neinas, the amount negotiated in today’s dollars was about $400 million for member CFA schools, excluding the Big Ten and Pac 10, which chose not to be a part of the CFA but still benefitted greatly from all of the organization’s initiatives to restructure college sports.
Immediately, the NCAA struck back by threatening sanctions on the schools participating in the CFA television agreement with NBC.
“The CFA as an organization had no standing because we had no teams to be ineligible,” said Neinas. “We had the president of the University of Georgia, Fred Davison, who was chairman of the CFA board, and Dan Gibbens, law professor from Oklahoma, who was a member of the CFA TV committee. Those two institutions stepped forward and said they would act as plaintiffs to challenge that.”
In the two lower court decisions leading to the 1984 Supreme Court ruling, the NCAA’s basic position was that it was obligated to provide the television rights to its member institutions as a whole.
According to Neinas, there was nothing written in the NCAA constitution or by-laws stating this, but the NCAA argued that, by “history and tradition” and by the fact that its members schools voted on the football TV plan, television rights were the sole property of the NCAA.
“Of course, our members said, ‘No, the rights to our institution’s football TV belonged to the institutions, so it was a property rights case, initially,” said Neinas.
When the NCAA’s appeals reached the Supreme Court in 1984, it evolved into an antitrust issue.
“The final decision by the Supreme Court by a 7-2 margin was considered a ‘rule of reason standard,’ which the attorneys for the CFA at the time told me the decision by John Paul Stevens was a textbook decision,” said Neinas. “Interestingly enough, that case is still frequently cited in law schools when teaching antitrust today.”
The net of the Supreme Court decision, initially, was an oversaturation of the market and modest TV revenues for the participating CFA schools. But that eventually changed – and changed dramatically.
“What happened was the Supreme Court decision came out on June 24, 1984. We had a month to negotiate and the colleges had no leverage,” explained Neinas. “We entered into an agreement off the bat with ABC and ESPN. The Big Ten and the Pac 10 had a plan and the CFA had its plan and here’s the thing, there were basically only three networks at the time and in 1984 the CFA entered into an agreement with ESPN and it was the first live regular series of telecasts for ESPN, related to anything substantive, and ESPN has certainly grown since then.”
Indeed it has, as has college football and college basketball.
“There has been growth in Division I-A football like there has been growth in Division I basketball and institutions want to have nomenclature that they’re Division I,” said Neinas.
Today, conferences have acquired schools to enhance its television inventories and revenue opportunities. That’s why the Big Ten chose to add schools such as Rutgers and Maryland, and that’s why the Big 12 needed a 10th school in 2012 when Texas A&M and Missouri left for the SEC - fortunately for West Virginia University,
And providing the impetus for these landscape-changing events was Oklahoma’s lawsuit against the NCAA that began in an Oklahoma City courtroom in 1981, and ended in the highest court in the land three years later in 1984.
1984 NCAA-Oklahoma Supreme Court case, Chuck Neinas, NCAA, West Virginia University Mountaineers, Big 12 Conference
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