Utah has BCS lawsuit in mind
Already fighting off demands for a playoff system from President Barack Obama and leaders of the U.S. Congress, the Bowl Championship Series will soon face a more serious threat: an antitrust lawsuit from the attorney general of Utah that could dismantle its postseason championship scheme.
Mark Shurtleff, the Utah attorney general, is gathering contracts, statistics, economic data and experts, and expects to be able to file suit against the BCS in June.
"From the very first kickoff of the college football season, the BCS uses its monopoly powers to put more than half of the schools at a disadvantage," Shurtleff said. His investigation comes after an undefeated University of Utah team was relegated to the Sugar Bowl in January with no chance to play for a national championship.
The BCS was formed in 1998 in an attempt to ensure that the two top-ranked teams in college football would meet in a bowl game. It has produced controversy almost every year. Six preferred conferences -- the ACC, the Big East, the Big 12, the Big Ten, the Pac-10 and the SEC -- are guaranteed automatic berths in the BCS bowls and at least $18 million in revenue each season. Other conferences -- including the Mountain West, where Utah plays -- are not guaranteed a berth in a BCS bowl and receive significantly lower shares of BCS revenue.
To win the lawsuit, Shurtleff must be able to prove that the BCS has total control of the postseason bowl market for its games, that it uses its control to help some conferences and schools at the expense of others, and that the BCS system has damaged the University of Utah as well as the state of Utah.
It's a quest that could succeed, according to antitrust experts and scholars contacted by ESPN.com. If the lawsuit is successful, the BCS could face court orders requiring it to mend its ways and pay triple damages to states and universities harmed by the BCS, as well as their legal fees.
"There is no doubt that the BCS is a near monopoly," said Andrew Zimbalist, a professor of economics at Smith College who has focused his research on sports monopolies. "There is no doubt that it uses its power to make unequal payoffs to conferences and schools. And there is no doubt that its opportunities for rewards are not equal. There is a good case to be made."
Gary Roberts, a law professor at Indiana University who is the editor of the leading text on American sports law, agrees.
"It will be complicated, and it will be a close call," Roberts said. "But a state attorney general can win it if he files it in the right place."
Both Zimbalist and Roberts warn that antitrust litigation can be protracted, difficult and uncertain.
"It is all highly subjective," Zimbalist said. "You don't know how the judge or the jurors or the judges in the higher courts will react."
Referring to venues that have been harmed by the BCS and others that have profited from the BCS, Roberts said that "if you sue the BCS in Salt Lake City or Boise or Honolulu, you have a sure winner. But if you sue in Columbus or Tuscaloosa or Baton Rouge, you may not do so well."
Through a spokesperson, John Swofford, the commissioner of the Atlantic Coast Conference and the current BCS coordinator, referred ESPN.com inquiries about the lawsuit and pressure from Congress to Bill Hancock, who is the administrator for the BCS. Hancock said, "We have been subject of antitrust inquiries in the past and nothing has come of them."
That won't change in the Utah case, according to University of Oregon president David Frohnmayer, the chair of the BCS Presidential Oversight Committee.
"Frankly, we're not concerned about it," Frohnmayer said. "People can threaten lawsuits all they want, but it's another thing to be successful I am convinced that an antitrust suit would be utterly without merit. And I speak as a former state attorney general."
Frohnmayer, who was Oregon's attorney general from 1981 to '91, said he has known about the Utah suit for several months. One of the reasons it won't be successful, he said, is that every Division I football conference voluntarily agreed to the BCS system when it was formed.
Nonetheless, Shurtleff said he realized he had to take some action after he watched Utah beat Alabama 31-17 in the Sugar Bowl to complete a second undefeated season (2004 was the first) without a BCS bid to a national championship game.
"I asked the BCS for its contracts and its governing documents," Shurtleff said. "They claim that they are all confidential. They want to do everything the hard way, so I have issued subpoenas and investigative demands for the material."
Shurtleff is also gathering statistics and retaining experts to develop economic measures of the harm the BCS has done to the University of Utah and to the state of Utah.
"I will present the material and a draft of the lawsuit to the meeting of the state attorneys general in June, and will be ready to file suit shortly thereafter," Shurtleff said. That meeting is in Colorado Springs, Colo.
He said he will try to persuade other states and other universities to join his effort to establish a class action against the BCS, which would multiply the possible consequences for the BCS if Shurtleff and Utah prevail.
Shurtleff's effort comes after the BCS signed a four-year, $500 million contract with ESPN to broadcast BCS games beginning in the 2010 season. Many observers believed the new television contract decreased the likelihood that the BCS would agree to significant changes in its format in the foreseeable future. The recent pressure from Utah and Congress could change that.
In the Utah lawsuit, Shurtleff would ask for an injunction, a court order that would stop the BCS from following the procedures it has followed for the past 11 years.
"It is a bit early to say how things would work out, but a playoff system would be open to all and would be pro-competitive, instead of the exclusionary, anti-competitive system now in place," Shurtleff said. "We would not ask the court to fashion a new system. We will be asking the court to order the BCS to fix something that is clearly violating the law."
What would happen to the BCS contract with ESPN and other BCS obligations?
"We would address those issues after a decision on the BCS and its selection procedures," Shurtleff said. "If there were a playoff, there would still be bowl games in the playoffs, and there would still be television broadcasts of the playoff games."
Josh Krulewitz, ESPN's vice president of communications, said, "We are not part of the process of determining the structure. The BCS came to us with this format and these are the rights we acquired."
Shurtleff hopes for some help from the White House. President Barack Obama, in a number of interviews, including with ESPN, has indicated he would prefer a national collegiate football playoff system. On CBS' "60 Minutes" in December, he said, "We should be creating a playoff system. If you've got a bunch of teams who play throughout the season and many of them have one loss or two losses, there is no clear, decisive winner."
According to Shurtleff, when he presented his lawsuit ideas to Eric Holder, Obama's attorney general, at a meeting of state attorneys general, Holder joked, "If the president finds out about what you are doing, he will place it at the top of his agenda."
And when Christine Varney, Obama's selection as the chief of the Justice Department's antitrust division, appeared before the Senate Judiciary Committee in early March for her confirmation hearing, Sen. Orrin Hatch, R-Utah, was ready. His first question to the nation's top antitrust enforcer was to demand her thoughts on the BCS and Shurtleff's lawsuit.
Although Varney answered that she had not "formed views on this issue," she also said she "looked forward to working with you, the Utah attorney general, and the [antitrust] division staff" on the case.
Like many college football fans in Utah, Idaho, Wyoming and Hawaii, Hatch has run out of patience with the BCS.
"I am not itching to have the government get into the business of regulating college football, but the BCS is patently unfair," Hatch told ESPN.com. "More than half the schools have no chance of being in the championship game. It's exclusionary, and it hurts the schools that are not in the big conferences."
Hatch has added the BCS to the agenda of the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights, and he intends to hold an investigatory hearing and to introduce legislation.
"I'm not sure now what the legislation will provide, but anything would be better than what we have now," Hatch said. "I agree with President Obama that a playoff system would be a significant improvement."
Hatch, a Republican stalwart, will have support from a number of Democrats on his BCS legislation. Rep. Neil Abercrombie, D-Hawaii, also wants action on the BCS, suggesting it "is a racket, it is white-collar crime. It's clearly, clearly antitrust."
That Hawaii, too, played in the Sugar Bowl, a BCS game, after the 2007 season is not enough for Abercrombie.
"I'm supposed to be grateful to these people?" he said in an interview with ESPN.com. "Who the hell put them in charge?"
Abercrombie said he is tired of "the insufferable arrogance of these BCS people. Nobody likes arrogant, condescending, patronizing types."
The Hawaii congressman introduced a resolution in January that calls for an NCAA Football Bowl Subdivision playoff and the abolition of the BCS "in the interest of fairness and to bring parity to all NCAA teams." His co-sponsors from Texas, California, Georgia, Idaho and Utah all represent constituents who have a beef with the BCS. Their resolution is currently awaiting debate in a House subcommittee on higher education.
Abercrombie indicated he will support the Utah lawsuit, saying "There's not a jury in the country that would turn us down if we take this to federal court on antitrust."
In 2006, the BCS expanded its series of games by one, moving from four to five bowls and including 10 rather than eight teams. On its Web site, the organization makes the point that in its first nine years of existence, it distributed more than $70 million to conferences that do not have automatic berths in the BCS system. That number pales next to the $18 million per year the BCS pays to each of its member conferences, but those points likely would be a pivotal part of any BCS response to the lawsuit.
Hancock, the BCS administrator, said, "These bowls are more open to schools than they have ever been before. There is now more opportunity for more teams." And Frohnmayer said, "The system through the years has matched up No. 1 with No. 2 with remarkable success."
Indiana University's Roberts, who has studied antitrust issues in the sports industry for nearly 30 years, expects the BCS to answer antitrust charges with the claim that its benefits outweigh its anti-competitive effects.
"They will suggest that they have produced a highly popular product for consumers, that it is of benefit to consumers, and that is a reasonable way to produce a national champion," Roberts said. "At some point, a jury will decide whether the restrictions on Utah and other similarly situated teams are reasonable restrictions or the anti-competitive and harmful actions of a monopoly."
As Shurtleff prepares his antitrust attack on the BCS, he is also ready to talk about a negotiated settlement.
"With President Obama, Senator Hatch and the Justice Department all interested in these issues, there should be a gathering at some point during our litigation that could produce a new and better system," he said.
But Hancock and the BCS don't sound conciliatory.
"It's simple to sit back and say, 'We have to have a playoff. It works in the NFL,'" Hancock said. "But when you dive into the details, it's not that simple. You've got a question of neutrality. Can you find that many neutral sites?"
The leadership of the BCS, Hancock said, "would sooner go back to the way it was before the BCS started than to go to a playoff."
So after 11 years of conversation about the BCS and its selection system, it appears the next step could be litigation. Shurtleff and Utah are ready.
"We'll go it alone if necessary," the Utah attorney general said. "But we have the president, the Congress, and the law on our side. We'll see them in court."
Lester Munson, a Chicago lawyer and journalist who reports on investigative and legal issues in the sports industry, is a senior writer for ESPN.com. Paula Lavigne is a reporter in ESPN's Enterprise Unit. Her work appears on "Outside the Lines."