A federal appeals court today upheld the right of individual colleges and universities to negotiate contracts for televised football games, a decision that could seriously affect the NCAA and its $281.5 million television package.
The 10th U.S. Circuit Court of Appeals, in a 2-1 decision, said an NCAA rule giving if exclusive right to negotiate with the networks is unconstitutional.
The court gave the NCAA a minor victory, saying that a lower court judge had gone too far in his injunction forbidding the NCAA from regulating TV deals. Carried to its extreme, the panel said, the order could be misconstrued to prevent the NCAA from imposing sanctions on schools that might violate regulations unrelated to the TV plan.
But overall, the panel's decision was seen as a victory for the universities of Oklahoma and Georgia, which brought the initial suit, and other major colleges.
"Our analysis of the television plan and contracts . . . leads us to affirm the district court's conclusion that the plan and contracts constitutes per se illegal price-fixing," the majority opinion said.
The majority opinion, written by Justice James K. Logan, said the NCAA television arrangement "is so fraught with anti-competitive potential that it appears to be one that would always, or almost always, tend to restrict competition."
The lone dissent was from Judge James E. Barrett, who said he was convinced the arrangement was not price-fixing.
The appeals court remanded the case to U.S. District Court in Oklahoma City for further consideration of the injunction.
U.S. District Judge Juan C. Burciaga ruled last September that the NCAA's television contracts with major television networks violate federal antitrust laws. His order was stayed by the appeals court.
The two schools filed the suit, contending that they should be free to negotiate individual contracts with television stations or networks.
The NCAA had argued that its television policy does not fit the definition of an illegal monopoly. According the the NCAA, unless restrictions reduce output, they cannot harm consumers and therefore don't violate antitrust laws.
The NCAA tonight issued a statement saying it would have to read the decision closely before responding.
At Georgia, spokesman Barry Wood said of the decision: "While it is gratifying, it is no surprise, especially since the Justice Department filed a brief in support of our position . . . As far as implications of the suit, we don't know. The point of law has been settled."