Friday, November 16, 2012

NCAA v. Board of Regents of Univ. of Oklahoma case brief

NCAA v. Board of Regents of Univ. of Oklahoma case summary
468 U.S. 85 (1984)


FACTS

-NCAA negotiated TV rights w/ CBS & ABC, limiting any individual school to no more than 6 televised games
-NCAA threatened disciplinary action against OU & other major colleges that signed individual TV contracts w/ NBC

ISSUE
-Does the NCAA’s restriction of freedom to negotiate & enter own TV Ks violate § 1?

HOLDING
-Not per se illegal, but after applying rule of reason, agreements are still anti-competitive w/ no compelling & reasonable justification

ANALYSIS
-This is a limitation on output because restraining quantity of TV rights for sale.
-What is critical in this case is that it involves an industry in which horizontal restraints on competition are ESSENTIAL if the product is to be available at all
-Product cannot be preserved except by mutual agreement.
-But TV plan does not promote procompetitive efficiency
-Absence of proof of market power does not justify a naked restriction on price or output, but NCAA does have market power b/c advertisers will pay a premium to reach this particular mkt audience
-Rule of Reason does not support a defense based on the assumption that competition itself is unreasonable

CONCLUSION
"The interest in maintaining a competitive balance among amateur athletic teams that the NCAA asserts as a further justification for its television plan is not related to any neutral standard or to any readily identifiable group of competitors. The television plan is not even arguably tailored to serve such an interest. It does not regulate the amount of money that any college may spend on its football program or the way the colleges may use their football program revenues, but simply imposes a restriction on one source of revenue that is more important to some colleges than to others. There is no evidence that such restriction produces any greater measure of equality throughout the NCAA than would a restriction on alumni donations, tuition rates, or any other revenue-producing activity."

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